TalkTalk’s revenue growth accelerated to over 4% in Q3, despite a tough comparative, with a price increase towards the end of the quarter and robust corporate revenue growth helping, giving it good momentum into 2015

Broadband net adds of 15k were unchanged on the previous quarter, disappointing given a broader market bounce, but the company expects acceleration next quarter

The company warned of lower than expected EBITDA margin in H2 2014/15, making its medium term 25% target look more challenging, but margins are still likely to improve going forward

For the second year running, 2014 has seen a steep year-on-year decline in total daily average viewing time, which fell by almost 5%, and was again, as in 2013, greatest among younger age demos, especially among children aged 4-15 where the decline reached double figures

Connectivity and the rapidly growing population of smartphones and tablets appear the main, though not the only, causes of a decline that appears general across the main PSB, PSB family and non-PSB channel groups. The decline nevertheless varies by channel genre, with the more youth oriented, such as Children and Music, feeling the connectivity squeeze the most

Whilst the great majority of non-PSB channels are only available on the pay-TV platforms, the DTT platform provides a significant audience and advertising contribution (ballpark estimate of £150-200 million per annum) to the relatively small group of leading free-to-air non-PSB channels, which are also less constrained in developing their online initiatives than the mixed advertising/subscription non-PSB channels on the pay-TV platforms

The international business (CWI) has been hit by a sharp downturn in tourism, but performance at the UK-based business (Worldwide) remains on course, despite declining revenue

The initial announcement of an intention to demerge Worldwide from CWI will be followed by more details by the end of November

With little prospect of growth at International in the second half, and a successful turnaround phase at Worldwide beginning to draw to a natural conclusion, the demerger may not have the impact some had hoped

Channel 4 has confirmed it will distribute catch-up and archive TV shows via YouTube on a non-exclusive basis starting in November, with the broadcaster responsible for selling advertising around its content

The partnership looks to be a win-win: Channel 4 stands to get a huge lift in its online audience while retaining control over sales, while Google achieves a breakthrough deal with a major broadcaster with the hope of more to come

We expect a rash of similar deals as rights holders, broadcasters and video service providers jostle for position in the nascent internet TV market, but few will benefit from the special synergies offered by Channel 4-YouTube

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

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

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