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UK mobile service revenue growth improved in Q3 to -0.8% from -1.7% in the previous quarter, a welcome turnaround after three quarters of declining growth. Pricing remains firm, data volume growth remains robust, and some of the one-off factors affecting the previous quarter have dropped out

Sky Mobile soft-launched at the end of 2016, and it is taking an aggressive approach with a very deep MVNO technical model with substantial fixed costs, a high advertising budget and ambitious internal subscriber targets. To date the fixed MVNOs have not had a substantial impact on the MNOs, targeting a customer base that is non-core, but with SIM-only on the rise this may change

Looking at recently released network performance statistics, the impact of spectrum disparities is clear, with EE both able to offer faster speeds nationwide due to its large blocks of 4G spectrum, and offer much faster speeds in London. EE also has a lead in geographic coverage, and is planning to push its coverage much further, creating a challenge for the other operators to keep up

TalkTalk’s broadband subscriber decline has re-accelerated, with retail weaker than wholesale, and its consumer revenue is declining at 6%. This is partly due to price change timings, partly due to last year’s cyber-attack, but also partly due to underlying weak retail broadband subscriber growth

EBITDA did grow strongly, although this was in part due to less subscriber growth. The new pricing plans will likely drive more short term revenue weakness, but could potentially drive lower churn in the medium term, and they have renewed TalkTalk’s price competitiveness, particularly on high speed products

Longer term, we still think that the company will find it challenging to stabilise its retail broadband base in the face of a slowing market and Virgin Media’s network extension, at least without significantly upping its marketing spend and sacrificing some margin

UK residential communications market revenue growth accelerated to 5.8% in Q3, from 5.0% in the previous quarter, helped by an overlapping price rise at BT, and supported by firm pricing and accelerating high speed adoption elsewhere

In contrast, volume growth in the core three products continues to slow, with little sign that this will ever re-accelerate. In the longer term we cannot see ARPU growth acceleration continuing to fully compensate, and market revenue growth might also have peaked

With Virgin Media’s continuing network extension and improving pay TV service putting pressure on the other operators, Sky and TalkTalk are protecting themselves by aggressively marketing high speed broadband. Correspondingly, this quarter marks the first time that Openreach’s high speed net adds were mostly derived outside of BT’s retail divisions

France’s number two telecoms operator has suffered extensive damage since the 2014 takeover by Altice, which engaged in a slash-and-burn leveraged buy-out. Market share loss has triggered a revenue decline, with uncertainty of when this might stabilise

Increased investments will barely allow SFR to stand still in the competitive race for 4G and fibre deployment. Cash flow, while in decline, is sufficient to meet high debt payments – but rising bond yields could pressure P&L

SFR aims to appeal to subscribers through enlarged bundles of content sourced mainly from Altice investments in media, but execution seems geared to achieve VAT optimisation and augment the group’s political influence – which may be needed as massive job cuts are planned

US entertainment groups have not been disrupted by the rise of digital media. Long running franchises drive growth across diverse sectors, starting with pay-TV and SVOD. US television advertising is rising in line with GDP, while the online video ad market is flourishing, with much appearing alongside the majors' scripted content

Studios' cable channels are their most profitable assets, but M&As with distribution platforms, including Comcast's aquisition of NBC Universal, have usually failed to deliver synergies

The Donald Trump presidency could leverage hostile public opinion towards mergers to undermine the AT&T bid for Time Warner; but it could also stimulate M&As if it granted tech companies a tax break to repatriate profits. A more protectionist administration could also bring about a less benevolent attitude towards majors' foreign operations

With the decline in its subscriber base accelerating and following an antitrust veto over its planned tie up with BeIN Sports, Canal+ has decided to radically restructure its retailing on IPTV – where over 60% of subscriber recruitment takes place 

The basic channel package is now wholesale to ISPs and included in upper tier triple play bundles – much higher volumes should more than balance a deep price cut. Soon premium and optional packages are to be unbundled on all platforms to create cheaper entry points and favour subscriber customisation

Canal+ is thus increasingly focused on supplying premium content, leaving the user interface to ISPs. Without the scale of other international content producers and in a nationalistic political context, we believe that this market rationale will eventually lead Vivendi to sell Canal+ to Orange

A lacklustre UK launch of Viceland—the new, multinational linear television channel from youth-skewing, gonzo-esque Vice Media—followed six months after a similarly underwhelming entrance into the US

It is surely early days, but despite strong content, the initial results were predictable, considering the challenges. The response by Vice, that viewing figures are essentially immaterial to its plans, was expected but deviated from earlier, bullish sentiments

Beyond linear viewing, as an intended mass “content generator” to power the greater Vice online network, Viceland may answer a fundamental question: Is Vice and its distinctive content really what the kids want?

After the dispute with Vivendi, Mediaset Premium faces mounting losses with no buyer in sight and increasing tension within the controlling shareholder family

Sky has managed to resume growth despite the loss of the Champions League (CL), mostly thanks to strong advertising sales

Next year, both CL and domestic Serie A, will auction the 2018-21 broadcasting rights. Sky will be in a position to substantially increase its range of exclusive football coverage

 

UK mobile service revenue growth dipped down in Q2 to -1.7%, with this being driven by some one-off factors, such as MTR and roaming cuts, and some longer terms trends, such as the continued rise in SIM-only

Profitability nonetheless improved at all of the operators, suggesting strong ongoing cost control, and that some of the revenue weakness is caused by factors that do not impact (or even positively impact) the bottom line

Competitive performances were mixed, with EE’s revenue growth improvement contrasting with dips at the other three operators, driven by EE’s strong commercial momentum and it taking the SIM-only and roaming hit earlier than the other operators

Whether the US has reached “Peak TV” —the apogeic volume of original scripted series—is debatable, but the mass of content being produced is unparalleled


As television continues its transition from a disposable medium to a permanent one, and an increasing number of outlets are creating original, scripted programming to keep up or differentiate, does this American explosion have ramifications for the UK consumer or broadcaster?


Simply put, the UK’s more concentrated television landscape limits exposure. And, counter-intuitively, an unsustainable focus on scripted drama could play into the hands of the traditional broadcasters, whose future strength may lie in the diversity of their offering