As we expected, UK mobile operators are beginning to introduce EU roaming tariffs, with EE taking the first major leap in the hope that others will follow.
This move is somewhat inevitable as current arrangements leave operators exposed to up to €75 of monthly wholesale charges.
We don't envisage a return to the days of super-normal returns from roaming, but it is nonetheless conducive to much-needed price inflation in the sector.
The last lockdown caused service revenues to dip again to -7% in spite of some easing of roaming pressure and the annualisation of some early pandemic weakness.
The heralded, elevated in-contract price rises will fail to drive higher growth this year due to lower inflation—we estimate zero impact at BT/EE relative to 2020 and a reduction in revenue momentum of around 0.5ppts for each of the other operators.
The annualisation of the first lockdown is the most meaningful upside from here with a boost of around 5-7ppts possible. However, some pandemic upsides will also unwind, notably lower churn and enhanced B2B demand with the latter vulnerable to the end of furlough support and the economy.
The highlight of what seems set to be O2’s final results as a standalone company is OIBDA growth of almost 8% in spite of a drag from weaker net adds.
It has also been a good quarter for O2 strategically with preliminary merger approval and contiguous 5G spectrum although that may be matched by its peers in subsequent deals given H3G’s openness to negotiation.
The annualisation of COVID impacts as well as an improving mobility picture will provide a significant boost to trends, although the roaming drag seems unlikely to reverse any time soon and O2’s relative growth will suffer from lower in-contract price rises than peers this spring.
The press industry lost £1 billion off the topline from the calamitous decline in print revenues due to pandemic-related mobility restrictions, partly offset by gains on digital subscriptions, much harder to precisely size in revenue terms.
Trapped at home for the most part, online traffic to BBC News and news publisher services boomed. Popular news sites marginally grew digital advertising while the quality nationals attracted 800,000 new paying subscribers to reach nearly three million in 2020.
The outlook for 2021, in the transition to the ‘new normal’, is mixed. Consumer work patterns and news, information and entertainment habits are unlikely to ‘bounce back’ to pre-pandemic levels, placing free commuter titles at particular risk. Signs of confidence through online innovation are welcome.
The press industry lost £1 billion off the topline from the calamitous decline in print revenues due to pandemic-related mobility restrictions, partly offset by gains on digital subscriptions, much harder to precisely size in revenue terms.
Trapped at home for the most part, online traffic to BBC News and news publisher services boomed. Popular news sites marginally grew digital advertising while the quality nationals attracted 800,000 new paying subscribers to reach nearly three million in 2020.
The outlook for 2021, in the transition to the ‘new normal’, is mixed. Consumer work patterns and news, information and entertainment habits are unlikely to ‘bounce back’ to pre-pandemic levels, placing free commuter titles at particular risk. Signs of confidence through online innovation are welcome.
Advertising income has been the lifeblood of commercial TV for decades, but declining linear audiences—combined with digital video alternatives—mean the TV advertising model must evolve to ensure it remains as potent a medium for brands as ever.
Lack of effective audience measurement and somewhat opaque advertiser/agency/sales house relationships are hampering linear TV advertising revenues. Both issues need resolving to underpin a healthier ecosystem overall.
Flexibility is key to this evolution. A move to audience buys across most linear and BVOD inventory would provide greater flexibility and targeting for advertisers, and would sit alongside some premium context buys. A greater onus on volume deals would give broadcasters more certainty to invest in content and their advertising propositions.
Spectrum auction assignment stages are normally fairly dull and routine, but due to the two-part nature of the 5G auctions, and the critical importance of proximity and contiguity, this is not the case with 5G.
The assignments won, combined with the Vodafone/O2 deal, ensures that all the operators enjoy at least 80MHz of (essential) proximity, but only O2 gets (nice-to-have) contiguity.
Further swaps could ensure contiguity for all, but this requires H3G to co-operate, which is in its absolute, but not relative, best interests.
The sector rebounded slightly in the quarter to December thanks to a seasonal improvement in the roaming drag, although the partial lockdown tempered the recovery.
We await imminent news on spectrum trading, and there may also be some licence fee reductions as a consequence of the lower prices in the recent 5G auction.
While the sector is likely to continue to struggle into Q1, the outlook is much brighter thereafter thanks to the annualisation and even reversal of some lockdown effects, and to higher price increases from the spring.
The Telegraph’s carefully executed outsourcing of print advertising sales to Mail Metro Media fine-tunes its subscriber-first strategy.
Consolidation and collaboration are inevitable in a highly-competitive, structurally-shrinking news industry.
Reader-first models have emerged as the consistent theme for quality publishers, but the trade-offs, investment approaches and executions are highly differentiated.
Ofcom’s second 5G auction concluded with proceeds half those of historic levels for a number of reasons.
The outcome is positive for all operators with no major surprises. The results imply a much more level playing field for the UK mobile operators than in the past.
A relief for the operators but proceeds for the exchequer will be disappointing, and ALF renegotiation may reduce their revenue steam further.