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Rigorous Fearless Independent

Karen said the risk for Vodafone and all telcos is that they find their network equipment is in the wrong places. She said this is a “fairly immediate issue” that is impacting the current cycle of network planning.

“They’ve invested a huge amount to get as much capacity as they can into city centres, especially with 5G. They may now find that they didn’t need to invest so much there, and that they’ll come up against capacity issues in suburbs and rural areas to a much greater extent than expected, requiring additional investment."

BT: The vultures circle

9 December 2021

BT is in rude financial health, with strong short- and longer-term prospects arising from inflation-linked price rises next year and the FTTP investment J-curve in the years ahead.

BT’s traditional investors are however understandably sceptical, leading to interest from non-traditional investors and in alternative structures.

Changing the ownership and/or structure of BT involves significant operational, financial, political and pension fund-related issues, making a change of ownership in whole or part no easy panacea.

The boost from annualising the COVID-19 hit dissipated this quarter with service revenues flat-lining at –2.5%. The year-on-year mobility boost weakened and pandemic upsides of lower churn, cost savings and B2B demand unwound.

Q4 looks mixed with an improving year-on-year mobility boost but further unwinding of some pandemic upsides. Spring 2022 has the potential to be the long-awaited panacea with price rises of up to 8% and the prospect of renewed roaming revenues.

The operators continue to seek sources of market repair through price rises (to compensate for regulatory intervention elsewhere) and consolidation—but with little visible support from policymakers as yet.

Alice said "Because the business is still not profitable but trying to get as close to breakeven as possible, the amount of layoffs and cost cutting has been very drastic. That does have a knock-on effect. Ultimately, the quality will decline by having a smaller newsroom."

She added There are "two competing forces at play" with the SPAC deal. "Yes, the future for BuzzFeed is a consolidation play, but it's very heavily reliant on advertising. And that's very reliant on market conditions. The first thing to be cut is digital advertising."

Francois said “Discovery, about to merge with Warner, is one of the most powerful content operators in the world, so if it were to increase substantially its commitment to the UK sports TV market, it would look like a long-term, credible commitment. By contrast DAZN’s prospects are more fuzzy."

While Francois predicts the potential joint venture would not push sports rights costs up, owing to Eurosport and JV’s historically cautious approach to rights, he argues that the deal would “confirm the fragmentation trend where consumers need to subscribe to a range of services to watch their favourite sports – Sky, BT Sport, Amazon, Eurosport.”

“It rises the value of aggregation by operators likes Sky or Virgin, telling viewers “you find everything here in one place."

Tom said the channel is still some way off attracting the kind of viewers needed to cover costs. "GB News had a big night on November 22, averaging 119,000 between 6pm and 10pm,  which was on par with peak viewing levels of the first two nights after the launch - although it's not particularly clear why this night was comparatively so big. But other than that night the channel has been oscillating between 10,000 and 25,000 average viewing across the full day, for the past four months or so."

He added "This falls well short of the amount of viewing that the channel would need to break even on the cost base outlined at launch, but the main purpose of news outlets can often be removed from the pursuit of profit. Due to sizeable promotion I would imagine that the Trump interview will pull in similar viewing levels to launch, but I doubt it will resonate much beyond tonight in terms of an ongoing viewing boost."