European Online Advertising

Service revenues improved sequentially but remained negative at -0.7%, with all major markets flat to improving.

Backbook price increases have become quite prolific, but there is a mixed picture on new-customer pricing and considerable ARPU pressure in most markets.

Regulatory push for better coverage in return for longer licences continues to gain momentum, with Portugal the latest to move in this direction.

After a significant period of negotiation, Sky’s offer for ITV’s broadcast and streaming operations has been accepted, with consideration between £1.4 and £1.6 billion (the upside being a performance-related earn-out). Most of the payment will be cash, although it will also include Love Productions, makers of Bake Off, valued at £200 million.

From completion, ITV Studios will operate as a standalone business although a Content Supply Agreement with Sky will maintain a consistent flow of content, of around £420 million per year, which is similar to current levels (excl. sport), but with the potential of further upside.

Sky is making firm commitments on ITV's PSB remit and news provision and plurality. The most pressing issue in regulatory clearance will be defining the relevant ads market: a 'broadcaster-only' definition is an anachronism.

Service revenue growth improved to -0.6%, aided by price-increase mechanics, although this will reverse next quarter.

FinTech MVNO launches have been somewhat tentative thus far, and mobile speed-tiering looks set to become the norm.

O2 has stepped up its price aggressiveness in both SIM-only and with-handset unlimited tariffs and is now the price-leading operator brand in this popular segment.