France Télécom’s Orange TV premium strategy presents an interesting example of diversification into low cost ‘light’ pay-TV offers by an incumbent telecoms operator. Orange Sport and Orange Cinéma Séries are offered exclusively to Orange's 2.55 million TV subscribers, and five quarters after launch, adoption is 20%. This report draws several lessons on this type of venture for other incumbent operators
This report examines Ofcom's proposal that independently funded news consortia (IFNCs) assume the provision of regional TV news, occupying the regional news time slots vacated by the Channel 3 licensees
IFNCs are to be composed of commercial news organisations (television producers, newspaper groups, radio stations or websites), and will operate as private commercial/publicly funded hybrid models of regional news gathering and provision, alongside the BBC and commercial news organisations
DCMS has invited tenders for three IFNC pilots covering Channel 3 regions in Northern England and the Borders, Scotland and Wales, to be awarded in May 2010 with operations to commence by summer 2010.
At TalkTalk Group (TTG) net broadband additions at TalkTalk/AOL UK were unexpectedly strong, with low cannibalisation of Tiscali subscribers particularly good news
At the newly acquired Tiscali UK, the inevitable skeletons are starting to emerge from their cupboards. Management appears well prepared for the challenges, although it is early days
Carphone Warehouse’s distribution business grew connections at 2.1% during the quarter, another very creditable performance in a declining market, and it remains well positioned for the market recovery
The impending Competition Commission announcement of its provisional decision concerning the Contract Rights Renewal (CRR) remedy is expected to make little change beyond extending CRR to cover variants of ITV1, such as ITV1 +1 and ITV1 HD
Extending CRR to cover ITV1 variants should benefit ITV NAR (Net Advertising Revenue) by improving ITV1’s overall audience share, but does nothing to ease the deflationary pressures now gripping the TV advertising medium, where CRR works hand in hand with the requirement on the commercial PSB channels to sell 100% of their advertising inventories
The current goings on underline the dichotomy between competition and public broadcasting policy objectives
This report looks at the UK broadband and telephony market up to Q2 2009. The key trend is that the steep reduction in UK broadband net additions continued in Q2 2009, to 176,100
ITV reported a pre-tax loss of £14 million in H1 2009 as the advertising recession took a grip, with total TV NAR down an estimated 17% against H1 2008, while ITV family NAR fell year on year by 15%
Although visibility over future advertising spend is restricted to a couple of months, we expect significant further decline in total TV NAR over the remainder of 2009 and 2010, before recovery starts in 2011/12
Cost savings, debt-restructuring and disposal of non-core assets, including Friends Reunited and SDN, should see ITV through the worst and we expect it to benefit later on from regulatory changes to its core advertising business
The distribution business experienced modest growth in connections and revenue, easily outpacing European market handset growth of -15%, as the company continues to build market share
At TalkTalk Group (TTG) net broadband additions for the quarter were relatively strong, given likely market growth, probably due at least in part to reduced subscriber loss at AOL UK
In our view cut-price business broadband, rather than IPTV, offers the best prospect of profitable revenue growth in fixed line
The Digital Britain report’s proposed fixed line levy to fund rural NGA may well never become law, but if implemented, could end up being absorbed by the service providers, with a disproportionately negative impact on TalkTalk Group
The proposed Universal Service Commitment for broadband at 2 Mbit/s looks of limited attraction to potential bidders, but could increase the addressable market for retail broadband by about one million households
The proposed spectrum solution is a sensible compromise which ensures a roughly even playing field between mobile operators over the longer term. There is however still some way to go to implement it, with mid-2010 the best case timetable for the main auction of new spectrum, with this continued delay benefitting the incumbent mobile operators
Ofcom’s recent statement on LLU pricing has increased the amount which BT Openreach can charge unbundlers for full LLU over the next two years by about 8% overall
We estimate the changes will raise BT group EBITDA by less than 1% over the two years to March 2011
TalkTalk Group’s recent retail price increase is more than enough to offset the impact of Ofcom’s ruling on its annual EBITDA to March 2010, but the ruling could still take 5% off annual EBITDA to March 2011
Sky has yet to start mass migration to MPF and is more exposed to increases in the price of ancillary services, but less exposed to those for MPF rental. Sky’s annual residential telecoms EBITDA to March 2011 could be 10% lower, but this could be reduced if management takes the opportunity to increase the price of retail line rental
Carphone Warehouse’s distribution business had a slightly mixed year, with strong volumes and revenue mitigated by a sharp drop in margins and profit, with margin being sacrificed for market share
Given the very poor recession-hit market for handsets, Carphone Warehouse’s market share gains have been dramatic, so the sacrifice was at least not in vain
Although TalkTalk Group missed much of its guidance to March 2009, we now view new guidance as achievable, with the main risks related to the integration of Tiscali UK