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The takeover is part of the latter’s strategy to create a pan-European operator - using its Mediaset outfits in Italy and Spain – to rival US-based streamers such as Netflix. It is set to claim total revenues of €6.8bn (£5.89bn), according to Enders Analysis.
Broadband market revenue dipped back into negative territory in Q2, due to pricing pressure on both existing and new customers.
CityFibre’s capital raise puts it in pole position for altnet consolidation, while TalkTalk’s will enable it to compete much more effectively in the retail space.
Fierce competition is likely to continue unless and until retail altnets do the rational thing and consolidate into a wholesale model.
Furthermore, while it is difficult for Canal+ to compete with these giants on global blockbusters, "with this investment, the group is strengthening its differentiation in French cinema where competition is weaker," underlines François Godard, analyst at Ender Analysis.
And in a context where the film offering is very large, theater managers are increasingly tempted to quickly remove a film if it doesn't prove itself in the first week. "As a producer, distributor, and ultimately an exhibitor, Canal+ will be able to refine its strategy by maintaining a film it believes in," adds the expert.
The now-listed company is making a real strategic move. "It's strengthening its position in the film industry, which differentiates it from the competition of streaming giants. It's a great vertical integration move—on the face of it—," notes François Godard, an analyst at Enders. Vivendi, the former parent company of Canal+, was already a shareholder in Banijay, the audiovisual production giant.
Italy’s MediaForEurope (MFE) is set to become the majority shareholder of Germany’s ProSiebenSat.1 (P7S1) and the largest FTA broadcaster in Europe.
In a consolidating German market, P7S1 had no alternative credible option than to accept the (increased) MFE offer.
MFE believes that its new leadership position in European broadcasting will allow it to challenge platforms such as YouTube for regional advertising budgets.
Service revenues were flat this quarter, pointing to strong underlying performance in spite of the drag from changing in-contract price increases and subscriber decline.
Traffic growth has picked up to 15% over the past couple of quarters, suggesting that at least some of the recent sharp slowdown was somewhat one-off in nature.
The outlook for revenue growth is positive, particularly thanks to BT/EE leading the way on ramping in-contract price increases, but there are also inherent risks in such moves.
According to Enders Analysis’s recent report, Where will AI land? Platform wars, advertising reset and B2B game changers, the combined capex (capital expenditure) of Amazon, Google, Microsoft, Meta and Apple is an aggregate total of around $340 billion in 2025 for building AI infrastructure.
To understand just how significant that investment is, Enders’ report noted that it’s already roughly more than the annual economic output (GDP) of entire countries like Morocco and Portugal, and it’s already on the path to match Belgium’s annual GDP in the future.
Karen Egan, head of telecoms at the research specialist Enders Analysis, said that it would be difficult to make “any real margin” through wholesaling from Openreach at altnet pricing.
“But expanding in this way will be very helpful to metrics that are important and visible to prospective investors such as churn and revenue growth,” she said. “It’s a huge challenge across the altnet sector to raise financing, just to keep going. Given Netomnia’s build plans, the challenge looms even larger for them.”
Since the 2012/13 season, the Premier League’s global revenues have grown nearly fourfold to €2.1 billion, according to Enders Analysis’ Francois Godard. That emphatically exceeds the combined €1.4 billion made by Spanish, German, Italian and French leagues. Most of it comes from broadcast deals.