The linear TV broadcast industry has kept its oligopolistic structure remarkably intact over the last 50 years against a background of much technological innovation and re-regulation, but now faces a new wave of innovation that promises growth of non-linear at the expense of linear True disruption can only occur by solving the device challenge of developing on a mass scale new, compelling and innovative ways to access content, but so far non-linear has achieved a very small share of total viewing while linear viewing levels are as high as ever Although non-linear viewing may become substantial, it is unlikely to result in fundamental change in the distribution value in the industry

In Q3 Virgin Media delivered the strongest cable subscriber net adds it has enjoyed in years, with household net adds of 40k and broadband net adds of 57k ARPU and revenue growth moderated from the previous quarter, but remained strong in absolute terms at 2% and 3% respectively Broadband growth will likely still look modest compared to BT and Sky, but Virgin Media’s base is looking increasingly solid against any future attacks

BT’s acquisition of Premiership Rugby rights underlines its intentions to create a solid premium sports channel with expected launch in summer 2013

BT’s entry into the sports arena is part of a wider TV platform/content strategy that embraces the launch of a much enlarged basic channel offer, integration with YouView and fibre roll-out

Although expected to post significant losses on its sports channels over the next three years, BT’s commitment appears long term

In this report we show our analysis of the performance, key trends, competitive dynamics and factors impacting the UK broadband, telephony and pay-TV markets

The first part of the report focusses on market level performance and KPIs such as volume and revenue growth, net adds, pricing and ARPU, and market shares as well as our analysis of key developments in high speed broadband and pay-TV offerings

The second covers the individual results of the four largest ISPs (BT, Virgin Media, BSkyB and TalkTalk Group) in the context of the wider market developments

Though likely to be appealed, the CAT’s dismissal of the Ofcom WMO remedy seems certain to cut off any further re-regulation of pay-TV in the next two years

The CAT decision hands Sky pricing power in the wholesale of its premium sports content, while forcing other retailers to switch their focus on to attempts to enter into commercial supply agreements with Sky

Financially Sky has potentially most to gain and VMed most to lose from the CAT decision, while BT’s strategy to expand its content offer is highly challenged

In this report we show the findings of our 2012 UK mobile user survey. The report is a wide ranging analysis of the mobile market based on our consumer research, focusing on the competitive landscape among the mobile operators and smartphone manufacturers, and the changing consumer behaviour that has and will continue to impact the market

In this report we show our analysis of trends in UK broadband and telephony to March 2012, based on the published results of the major service providers.

Highlights for the March quarter include broadband subscriptions exceeding 21 million, a sudden uptick in broadband market net additions and local loop unbundling accounting for a record 40% of broadband subscriptions. The proportion of unbundled lines that are fully unbundled exceeded two thirds for the first time.

This quarter we also include a look at pricing, including prices for high speed broadband that show how BT Retail is using high speed broadband to reduce the price advantage of its competitors.

CPW’s key operating metrics worsened again in the March quarter, with connection volume growth dropping to -19% and like-for-like revenue growth dropping to -5.5%

Weakness in the UK prepay market continued to affect CPW’s results, with volumes again down 30-40%, but contract sales did not mitigate this as much as last quarter, with growth in the UK but declines in continental Europe

Prepay is not likely to improve until the end of 2012, as the volume decline annualises out and more smartphones are available at prepay price points, and contract recovery is dependent on economic recovery

VMed’s underlying financial performance in Q1 was hit by continuing high capex on customer equipment for TiVo and high speed broadband, and on marketing opex to retain customers Strong take-up of next generation TV, lower cable churn and continuing progress at the Mobile and Business divisions continue to give us confidence that the company’s strategy is working Despite early indications that most cable customers will accept the latest round of price increases, the outlook for underlying cash flow growth in 2012 appears limited

The London Olympics promise to be a major success for both the free-to-air broadcast licensees and the leading pay-TV platforms as a result of co-operative deals being forged between them

Recent distribution agreements with Sky provide the BBC and Eurosport with a massively bigger window to showcase their credentials in in-depth sports coverage and new technologies, especially 3D

For Sky, and assuming VMed in due course, there exist a number of potential indirect commercial benefits, as the message is sent out loud and clear that there is no better place to go for London Olympics free-to-air coverage than the pay-TV platforms