The US is intent on preventing the CCP’s goal of AI supremacy by 2030, banning exports of advanced AI chips to Chinese companies. So far, these bans have largely been shrugged off to create a new commercial dynamic in the region. 

Huawei wields a de facto monopoly on the manufacture and sale of advanced chips in China. Huawei also sells cloud services globally and threatens Apple's $70 billion in Chinese revenues through its premium handsets. 

China’s AI regulation is highly supportive of the training and deployment of Chinese-language LLMs developed by tech platforms, startups, and device makers, with meaningful revenue gains only appearing by H2 2024. 

Vodafone has struck a deal to sell its ailing Spanish business in a deal worth €5bn, equivalent to 5.3x EBITDAaL.

While the pragmatism of the move will be applauded, the valuation may be viewed as disappointing by some.

The deal removes an enduring drag on the company’s financials, providing scope for better European trends, but this is one of several challenges facing the company, with the dividend policy question now to the fore.

Service revenue growth almost doubled this quarter to 2.4% aided by price rises in the UK, Spain, and France, but remains well below inflation-levels.

The revenue boost from in-contract price rises will ultimately disappear as customers recontract, dampening the EBITDA outlook as costs continue to rise.

Operators are looking to other strategies to strengthen their positions, including edging up new-customer pricing, M&A, and attracting wholesale MVNO business.

Vodafone's headline revenue growth of +3.7% is actually a small decline once Rest of World exchange depreciation is accounted for. Europe, however, delivered an improving revenue trend to +0.4%, as signalled at Vodafone's FY results announcement.

The mix and operating trends are less positive, with growth driven by low-margin B2B, and subscriber losses accelerating in German fixed. Investors will be weighing up whether these results are green shoots of a recovery or another false dawn.

Although the company may reach its guided EBITDA on assumed exchange rates, it looks set to fall short in euro terms, which has implications for FCF and dividend cover.

Sky has withstood the consumer crisis better than its telco peers, but owners Comcast are stepping up pressure nevertheless.

No buyer for its German unit has yet emerged. In Italy, the outcome of the ongoing Serie A rights auction will shape that company’s growth prospects.

Looking forward, Sky has built a solid content supply line and is likely to strengthen further from the deflation following the end of the SVOD bubble.

Piracy of live video feeds—chiefly sports—is growing due to illegal subscription ‘IPTV’ services delivered to TV sets.

Consumers discover illegal feeds through search engines and social media, and subscribe through global payment systems.

Anti-piracy activity is focused on feed disruption. There is little attention paid to credit card and online payment facilitators who need to do more.

The Italian football league is auctioning its media rights for up to five seasons from 2024/25, with bids due by 14 June.

As in previous cycles, Sky and DAZN will probably bid below the minimum prices, which could trigger further auctions.

Plans for a league DTC service are unrealistic, and free-to-air broadcasts would be uneconomical.

UK news publishers have rushed to distribute content on TikTok. They are drawn by its enormous young audience, but poor monetisation and data sharing, a lack of referrals to their own sites, and data security concerns are frustrating a full embrace of the platform.

TikTok is increasingly identified as a ‘news source’ by young people: a risk to publishers distributing content on the platform is that their brands may get lost in user feeds.

Publishers should view activity on TikTok as a strategic cost instead of a revenue source: an investment in brand awareness, and development in content and delivery formats that are becoming more widespread across platforms. Brand visibility is key to success here.

Sky has extended its Italian Champions League coverage to 2027, most of it to become exclusive, but at a higher price.

Amazon keeps its Wednesday first-pick
Having secured the UEFA rights, Sky has derisked the upcoming Serie A auction for seasons from 2024/25.        

The Italian deal highlights the rebalancing of media rights value from domestic leagues to European competitions.

At this year’s Mobile World Congress, new hardware was stuck in beta, but glasses-free 3D screens impressed.

The metaverse confronted its identity crisis in a deflated hype cycle: blockchain and NFTs withdrew to the shadows, leaving the focus on enterprise and industrial applications.

AI: while aware of the (numerous) issues, discussions occasionally skated over issues of effectiveness, data inputs, the role of humans, and conditions for adoption.