Direct greenhouse gas emissions from the UK telecoms sector equate to around 0.1-0.3% of the UK total. Most operators have set targets to reach net zero across their direct emissions in the next 10-20 years, with the move to electric vehicles an obvious win.

Network upgrades to 5G and fibre have the potential to cut emissions from electricity by a factor of 10, and consolidation offers further decarbonisation upside.

The industry could enable emissions savings in other sectors equivalent up to 30x its own by averting the need to travel and through IoT applications, with the latter requiring careful commercial assessment given the financial constraints in the industry.

As viewing moves online, broadcasters’ on-demand players make up a growing proportion of viewing, becoming central to their future strategies.

However, even though SVOD viewing might have begun to plateau, BVOD growth cannot yet balance the decline of linear broadcast.

Of this shrinking pie, 2023 saw most of the major broadcast players increase their viewing shares.

VMO2 ended 2023 with strong ARPU and EBITDA growth, meeting its (revised) guidance for the full year, but saw receding subscriber momentum across both fixed and mobile.

2024 will be much tougher across the industry and for VMO2 in particular, with its revenue expected to be flat at best, and waning boosts from price rises and synergies coupled with a series of technical factors shrinking EBITDA.

The company has promised new commercial initiatives in 2024, and thereafter we see strong potential in it maximizing the use of its network and retail arms via breaking the long-standing lock between them, although the formation of NetCo is neither a necessary nor sufficient step for this.

Market revenue growth remained positive in Q3 despite much of the lockdown bounceback dropping out, and is at a significantly higher level than pre-pandemic.

The backbook pricing pressure that has plagued the operators over the last 18 months appears to be finally starting to drop away, allowing strong demand and firm pricing to feed through.

The prospects for next year are also very positive, with firm price increases expected from April, ultrafast upgrades growing in significance, and continued annualisation of backbook issues.

VMO2’s half-year results were something of a mixed bag with some decent revenue momentum but a big hit to EBITDA as COVID cost-savings unwound and company full year guidance suggests a further deterioration in Q4.

Volt, VMO2’s convergence product, is well-conceived and executed. With a following wind it should avoid the pitfall of revenue dilution whilst potentially offering some upsides.

The company remains in strategic limbo awaiting an outcome on its wholesale discussions with Sky. This will determine not just fibre expansion plans but also branding and co-marketing of its central products.

Sky has started to reap benefits from its substantial reduction in sports rights costs in Italy and Germany, helping to grow group EBITDA by 76% in Q3, despite a slight drop in revenue

With this change in strategy, the business model in Italy is undergoing an upheaval. Meanwhile, the UK continues to perform well, with further promise on the horizon thanks to the bold launch of Sky Glass

This streaming TV is a future-proofing leap forwards in Sky’s ever-more-central aggregation strategy, starting the business down the long path to retiring satellite, though this is probably still over a decade away

Press reports that Sky is in advanced talks to co-invest in Virgin Media O2’s upgrade of its cable network to full fibre are something of a surprise, with a host of issues for both parties to carefully consider

The muted deal would be somewhat negative for BT (although limited by Sky’s c.15% market share in VMO2 areas and regulatory protections/upsides). It is, however, a stark reminder of the precarious economics of alternative networks such as CityFibre

Whether this makes VMO2 more likely to extend its network further is a more critical issue, certainly for BT

Market revenue growth bounced back to 4% in Q2, the first positive growth for the sector since 2019 .

Most of the improvement was however temporary sports channel bounceback, with underlying growth still negative.

Prospects are nonetheless healthy, with price increases now regular, backbook pressure annualising out, and ultrafast boosts growing.

Sky’s revenue was up 15% in Q2, back to pre-COVID levels despite some lingering pandemic effects such as most pubs and clubs remaining closed. EBITDA fell by a third, driven by higher costs from sports rights, since very few live sports events took place in Q2 2020

The impact of “resetting” football rights is already evident in Germany and Italy, with 248k net customer losses across the group despite growth in the UK. However, Sky will make substantial savings, and we expect this will more than offset lost revenues

Meanwhile, Sky continues to strike deals with other content providers, solidifying its position as the leading household entertainment gatekeeper. In time, apps for NBCU’s Peacock, ViacomCBS’ Paramount+, ITV Hub, and, in Germany, RTL TV Now and DAZN, will all be aggregated within Sky Q

VMO2’s inaugural results reinforced the company’s focus on profitability with EBITDA growth of 6% and record margins. Flat revenues year-on-year benefited from the annualisation of the COVID-19 hit but incorporated little by way of rebound.

Much remains to be seen in terms of strategy but indications thus far are reassuring with B2B a clear focus for revenue growth, and the benefits of direct distribution feeding through to profitability.

The company’s decision to build an overlay full fibre network is a bold, but smart, move—allaying justified obsolescence fears about its network, enhancing strategic flexibility, and reducing its cost base.