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Both subscriber and ARPU growth are showing clear signs that they are topping out. We expect increasing volatility in both metrics moving forward as low-ARPU subscriber additions tug against price hikes and churn-cycling in wealthier regions
Many of the studios’ streamers are now flirting with profitability thanks to cost-cutting efforts, while cord-cutting only seems to be accelerating
Almost 50% of streamer sign-ups are opting for the ad-tier. However, it will be some time before ad-tiers become a ‘meaningful’ revenue stream
If the Vodafone/Three merger is blocked we envisage a significant cost reduction push from Vodafone, with a highly uncertain path to acceptable returns.
H3G's capex would need to more than halve from 2022 levels to get its finances onto anything like a reasonable footing. A commensurate scale-back of its network, and commercial, ambitions would also be required.
With H3G likely to enact a slow walk from the UK under such a scenario via a hybrid MNO/MVNO strategy, the UK would end up with three nationwide mobile networks either way, just lower quality ones if the deal is blocked—with a real cost to consumers and the government's growth agenda.
CityFibre has announced a deal to supply the second largest UK ISP Sky with wholesale broadband services, doubling its addressable target market at a stroke, in a blow to Openreach.
This may be just a foot in the door for CityFibre, but it is a critical one, and puts it firmly in the driving seat for altnet consolidation. There are also positives for VMO2 and other altnets hopeful of an eventual wholesale deal with Sky, and for retail ISPs now that the altnet sector is pitching towards wholesale away from retail.
While this is obviously bad news for Openreach, we see it more as an absence of a potential positive than something that might actually worsen current trends, and there are mitigating positives for the wider BT Group.
Market revenue growth was just positive at 0.2% in Q2, as lower price increases were mitigated by some temporary ARPU gains.
Growth is likely to drop negative in the rest of year however, with continued weak volume growth compounded by temporary ARPU gains unwinding.
Pricing structures differ quite widely as regards landline offers and out-of-contract pricing, and all could benefit from adopting best practice, a marginal gain worth pursuing in a tough market.