UK broadband market Q3 2008

VMO2 had a mixed Q3, with it finally arresting the decline in underlying revenue growth thanks to improving mobile, but the broadband side continued to struggle.

Financing pressure drove the company to preview a new strategic plan, which has many sensible elements, including freezing fibre upgrades and looking to use wholesale off-net.

More detail will likely be required to calm the financial markets, as well as improved operational performance, which may be tricky in the short term as pressures persist.

Ecommerce agents are beginning to interfere with Amazon's ownership of discovery, making fulfillment and seller services central for ongoing growth.

Amazon is defending its control over user habits by leaning into vertical integration with in-house agent Alexa for Shopping.

Competitors are placing their bets on a distributed model for agentic ecommerce, as an alternative to the walled garden.

The planned increase in Direct to Device (D2D) capacity will still leave just a small proportion of the rural mobile market addressable, and is a complete non-starter for urban areas (even in the US), making disintermediation extremely unlikely

Although satellite broadband is less constrained it will still face a ceiling of a few percentage points of the UK broadband market

We do not expect satellite broadband players to deploy mass-market strategies in the UK/Europe for reasons of both economics and physics