The ‘big 4’ ISPs’ combined revenue remained in decline in Q4 2024 at -0.4%, partly due to a BT accounting quirk but mainly due to altnets gaining share
ARPU growth of 2% is roughly compensating for subscriber declines of 2%, but this ARPU growth is likely to weaken in 2025 as various boosts drop out
A recovery will come as the altnets slow in H2 2025 (if not before) due to their restrained expansion, which cannot come soon enough for the big ISPs
VMO2 had another mixed quarter to end a difficult 2024, with revenue growth improving but EBITDA growth falling, and other metrics mixed at best.
The company hopes to put this behind it with guidance for both revenue and EBITDA growth in 2025, a tough ask given current momentum.
Ultimately achieving or exceeding this may depend on altnet pressure receding, which we expect it to do, but perhaps more towards the end of the year than the beginning.
US big tech companies are deploying hundreds of billions of dollars to remake the global economy in their image, as enviable growth contrasts with layoffs and low morale.
The cost of using AI models will fall in 2025 and make more AI applications possible. Regulation is caught between pressure from Trump and investigations that must go on, such as digital markets.
Microsoft and Google have tied their fortunes to AI. Amazon and Meta stand to realise business gains from AI, while Apple is the outlier: capex declined in 2024 as it focuses on iPhone and services.
CityFibre has reported positive EBITDA in 2024, albeit at a slim 4% margin, and still needs further scale—and to successfully onboard its new wholesale customer Sky—to drive decent investment returns.
CityFibre’s organic build rate is dropping sharply as it (sensibly) looks set to rely on consolidation to achieve the required scale, with its organic build focused on Project Gigabit areas.
CityFibre remains well-positioned for consolidation, but this may take some time yet, with the altnet sector set to slow organic progress anyway in the interim.
The mid-sized UK altnets Zzoomm and FullFibre have agreed to merge, in what looks like an all-share merger of (nearly) equals, both of whom have been struggling to raise finance.
Why did they pick each other rather than the larger CityFibre/Netomnia/nexfibre options? Valuation may have been the key factor, but it has left them still vulnerably low scale with further consolidation necessary.
Much more consolidation is required for the sector to be sustainable in our view, and further financial distress may be required for realistic valuations to emerge.
Use of publisher content to train AI models is hotly contested. Unacknowledged scraping, licensing deals, and lawsuits all characterise the publisher-AI company relationship.
However, model training is not the whole story. More and more products rely on up-to-date access to content, and some are direct competitors to publisher offerings.
Publishers can’t depend on copyright to deliver them the value of their IP. They need to track which products are catching on with users for licensing deals to make sense for them, and to ensure their own products keep up with the competition.
Market revenue dipped into marginal decline in Q3, as both ARPU and sub growth weakened, both partly driven by the continued altnet onslaught
Backbook pricing effects will be of marginal help in the short term, but new customer pricing competition is still fierce, and households are still cash-strapped
In the longer term, pressure from the altnets should wane substantially as their roll-outs slow and they consolidate towards a wholesale model (or fail)
Under financial stress, most streaming platforms are increasingly focusing on third-party distribution. Thanks to bundling, top streamers like Netflix can increase the lifetime value of subscribers, while smaller streamers widen their reach.
Bundles of streamers may have some potential in the US, but in Europe—with Netflix not interested—they do not have the necessary scale.
This trend towards bundling favours incumbent pay-TV aggregators like Sky and Canal+, but in the longer run they face competition from tech video marketplaces.
VMO2’s Q3 results were mixed, with underlying revenue and EBITDA slightly improving (but still negative), subscriber momentum slightly improved, but customer service issues still apparent.
The company’s broadband momentum is clearly being significantly curtailed by altnet gains (and Openreach overbuild), with substantial network expansion resulting in anaemic subscriber growth.
A return to growth in 2025 certainly looks possible, but it will depend on customer service issues being resolved, and industry consolidation going VMO2’s way.
President Trump will likely impose much higher tariffs on most imported goods, which could ignite retaliation by major trading partners and reverse decades of post-war globalisation.
America's biggest tech brands are vulnerable: we assess $570 billion of exposure to sales in China and the Chinese supply chain for six large companies generating over $2 trillion in revenue.
Apple and Tesla are major investors in China to supply that market, and demand for their products could be blown off course by a wave of anti-US sentiment.