Virgin Media’s consumer cable business has moved back to accelerating volume and (underlying) ARPU growth, with the new ‘big bundle’ packages looking like a success

Growth at the business and mobile divisions improved sharply, pushing group revenue growth back into firmly positive territory, and profitability growth even higher

Given the broadband speeds it offers, Virgin Media is still good value, and gets better value as speed demands increase, allowing continued price increases to back up future growth

The commercial non-PSB sector saw strong growth in share of total TV viewing of close to 40% as the multichannel TV homes universe doubled in the 10 years between the launch of Freeview in October 2002 and completion of digital switchover in October 2012, and even higher 50% growth in SOCI (share of commercial impact) thanks to the higher commercial airtime quotas of the non-main PSB channels

Even during the growth years, non-PSB channels that were present in 2003 felt a squeeze on viewing share and suffered losses as result of numerous channel launches that added to the long tail (Squeeze 1), and strong growth in the PSB families (Squeeze 2), which saw the total PSB share among the Top 25 channels in multichannel TV homes rise from less than 80% to over 90% between January 2003 and January 2014

Today, both the PSB and non- PSB commercial channel groups face the challenge of internet connectivity and increasing population of portable screens (Squeeze 3), and they are experiencing similar rates of decline. Yet, even if overall trends look the same, non-PSB viewing trends show significant variation by channel group and genre, to be explored further in Part 2

UK mobile service revenue growth remained relatively healthy at -1.6% in Q1 2014, despite the absence of some favourable one-off factors in the previous quarter, consolidating the improvements seen in 2013. Underlying growth improved a touch to 0.3%, and given that the regulatory impact will drop out next quarter, reported revenue growth may well turn positive in Q2

Service revenue growth among the ‘big three’ has re-converged to around -3% to -4%, with Vodafone improving due to strong recent subscriber gains, and EE worsening slightly after a strong previous quarter. H3G’s growth worsened due to the previous quarter including some one-off benefits, but it remains very strong at 10%, with contract ARPU having stabilised

We expect the market environment to continue to be relatively benign, with the biggest disruptive threats Vodafone, which is currently competing on quality but may become more aggressive on price if it loses patience, and the fixed line operator MVNOs, who have significant distribution disadvantages but nonetheless can harm the market with discounted pricing

Market revenue growth in the UK residential communications sector was surprisingly robust in Q1 2014, rising a touch to over 5% (or around 4% excluding the direct impact of BT Sport) from just under 5% the previous quarter, despite facing a number of headwinds

Revenue growth at the top four operators has converged to around 4% for all, which marks a major long term turnaround for BT and TalkTalk, who back in 2012 were both experiencing firmly declining revenue well below market growth, and have since done much to stabilise their subscriber bases and sustain ARPU growth

Looking forward, we expect that BT will continue to do well in the June quarter given Sky’s continued focus on TV products, but thereafter its focus may change, and whether BT's recent competitive boost from fibre will continue growing is uncertain. Having said this, any likely market share shifts are relatively minor in the context of the market, with the general theme likely to remain that the rising tide is lifting all boats

TalkTalk achieved solid broadband net adds, accelerating TV net adds and 5% revenue growth in the March quarter, and a significant price rise in April/May should support this level going forward

EBITDA is still suffering from set-top box subsidies, but the company is confident in significant expansion going forwards

Mass market adoption of fibre remains the biggest risk to TalkTalk as a discount brand, but for the moment this is not happening within its base, and TV could help it escape this niche

Improving volume trends and ARPU drove Virgin Media’s cable revenue growth to improve from 3.0% to 3.6%, helped by a firm price increase implemented during the quarter

Underlying OCF growth improved more dramatically, from -1% to +6%, with synergy benefits, lower marketing costs and lower premium channel cost growth some of the main drivers

While volume growth is still modest, solid ARPU growth and cost control should allow continued strong OCF growth through the rest of the year

At its f8 developer conference, under the slogan “Build, Grow, Monetise”, Facebook rolled out a slew of new policies and initiatives designed to boost its appeal amongst users, app developers and advertisers

In its drive to encourage developers to build more apps that support the social network, Facebook is attempting to position itself as a “cross-platform platform” with 1 billion+ users that sits on top of iOS, Android and other mobile operating systems

Key announcements included App Links, an open source solution enabling linking across apps, which may drive additional usage, and Facebook Audience Network, an app ad network rolling out this year, which should drive additional margin and could challenge Google AdSense

Facebook has successfully transitioned its business to mobile, with the number of mobile users now exceeding those on PC, and mobile newsfeed ads accounting for nearly all revenue growth and over half of total revenue, now on a $10 billion annual run-rate

North America and Europe continue to account for the vast majority of revenue and revenue growth, despite flat audience penetration in both regions, as increasing mobile consumption and advertiser take-up have driven sharp increases in ARPU, particularly in the US

Despite tougher comparables and declining desktop revenue going forward, the rapid ramp up in mobile ad revenue, plus initiatives such as video ads, ads on Instagram and planned mobile ad network, should deliver strong growth through 2014 and into 2015

European mobile service revenue growth again disappointed in Q4, dropping slightly from -8.9% to -9.1%, with underlying revenue growth dropping a little further from -6.0% to -6.3%, again reaching a record low

There had been hopes that improved GDP growth would drive a volume rebound, that price declines would start to annualise out, and that declining out-of-bundle usage would wane in its impact as this usage declined. In the event, ongoing price competition from smaller operators, MVNOs and quad play offerings, combined with surging use of OTT communications platforms, have dominated trends

In the medium term, the development of 4G and Vodafone’s Project Spring may bring some much needed network differentiation back to the market, allowing pricing power to return to the larger operators. However, it will be 2015-2016 before these factors come into play: in the short term, the main source of optimism is consolidation

Enders Analysis co-hosted its annual conference, in conjunction with BNP Paribas and Deloitte, in London on 4 March 2014. The event featured talks by 13 of the most influential figures in media and telecoms, and was chaired by Sir Peter Bazalgette.

This report provides edited transcripts of the talks given by seven of those speakers: James Purnell, BBC; Dido Harding, TalkTalk; Nicola Mendelsohn, Facebook; John Paton, Digital First Media; Mike Darcey, News UK; Ashley Highfield, Johnston Press; Michael Comish, Tesco