Fastweb model under strain

OpenAI has switched off its video AI Sora, under pressure to streamline and monetise as Anthropic captures enterprise momentum.

Google remains as the dominant US video AI player, with more established media industry relationships. Video AI will coalesce around more targeted, industry-ready tech.

The media industry might not mourn Sora, but the unwinding of the Disney/OpenAI deal means it's back to the drawing board on establishing a model for extracting revenue when media IP is used in video AI.

Ofcom’s final TAR statement offers continuity regulation of copper/fibre networks for the next five years, with fewer twists than expected, (sensibly) not moving the investment return goalposts as the altnet sector struggles to find a sustainable model.

Within the detail, broadband pricing regulation has an unwelcome cashflow impact on BT, leased line price cuts are much softer than originally proposed, Openreach appears to have more flexibility on Equinox-style offers, and some progress has been made on copper withdrawal rules.

Ofcom remains encouraging of altnet consolidation in general, seeing it as a way to enhance the effectiveness and sustainability of altnet competition, but is more wary of some types of deal, in particular those involving overlap such as the proposed VMO2/nexfibre-Netomnia deal.

Service revenue worsened by 1ppt this quarter to -1.7%, but this is heavily distorted by one-off factors, in particular the blowback from O2’s controversial price increases.

For the same reason, MVNOs enjoyed their best quarter ever, particularly Sky and Tesco Mobile.

The launch of ‘O2 Satellite’ will bring a welcome brand halo-effect. Limitations of satellite direct-to-device both make the consumer proposition a tricky one, and protect the mobile industry from cannibalisation.