UK mobile service revenue growth remained relatively healthy at -1.6% in Q1 2014, despite the absence of some favourable one-off factors in the previous quarter, consolidating the improvements seen in 2013. Underlying growth improved a touch to 0.3%, and given that the regulatory impact will drop out next quarter, reported revenue growth may well turn positive in Q2

Service revenue growth among the ‘big three’ has re-converged to around -3% to -4%, with Vodafone improving due to strong recent subscriber gains, and EE worsening slightly after a strong previous quarter. H3G’s growth worsened due to the previous quarter including some one-off benefits, but it remains very strong at 10%, with contract ARPU having stabilised

We expect the market environment to continue to be relatively benign, with the biggest disruptive threats Vodafone, which is currently competing on quality but may become more aggressive on price if it loses patience, and the fixed line operator MVNOs, who have significant distribution disadvantages but nonetheless can harm the market with discounted pricing

Ofcom’s fibre margin squeeze test’s initial indicative assessment concludes that BT’s current wholesale/retail pricing is ‘close to the boundary’ of creating a squeeze on its competitors

While BT can take comfort that it is at least close to passing the test, its DSL competitors (Sky, TalkTalk et al) can take comfort that BT cannot make life materially more difficult for them without failing it

Crucially, the costs of BT Sport are included in the test, so BT is now heavily dis-incentivised from further aggressive bids for sports rights, which is positive news for the prospective cashflows of both Sky and indeed BT itself

Market revenue growth in the UK residential communications sector was surprisingly robust in Q1 2014, rising a touch to over 5% (or around 4% excluding the direct impact of BT Sport) from just under 5% the previous quarter, despite facing a number of headwinds

Revenue growth at the top four operators has converged to around 4% for all, which marks a major long term turnaround for BT and TalkTalk, who back in 2012 were both experiencing firmly declining revenue well below market growth, and have since done much to stabilise their subscriber bases and sustain ARPU growth

Looking forward, we expect that BT will continue to do well in the June quarter given Sky’s continued focus on TV products, but thereafter its focus may change, and whether BT's recent competitive boost from fibre will continue growing is uncertain. Having said this, any likely market share shifts are relatively minor in the context of the market, with the general theme likely to remain that the rising tide is lifting all boats

At its f8 developer conference, under the slogan “Build, Grow, Monetise”, Facebook rolled out a slew of new policies and initiatives designed to boost its appeal amongst users, app developers and advertisers

In its drive to encourage developers to build more apps that support the social network, Facebook is attempting to position itself as a “cross-platform platform” with 1 billion+ users that sits on top of iOS, Android and other mobile operating systems

Key announcements included App Links, an open source solution enabling linking across apps, which may drive additional usage, and Facebook Audience Network, an app ad network rolling out this year, which should drive additional margin and could challenge Google AdSense

Facebook has successfully transitioned its business to mobile, with the number of mobile users now exceeding those on PC, and mobile newsfeed ads accounting for nearly all revenue growth and over half of total revenue, now on a $10 billion annual run-rate

North America and Europe continue to account for the vast majority of revenue and revenue growth, despite flat audience penetration in both regions, as increasing mobile consumption and advertiser take-up have driven sharp increases in ARPU, particularly in the US

Despite tougher comparables and declining desktop revenue going forward, the rapid ramp up in mobile ad revenue, plus initiatives such as video ads, ads on Instagram and planned mobile ad network, should deliver strong growth through 2014 and into 2015

Sky and TalkTalk are rolling out fibre in a small part of York, using a model that they could potentially extend to cover 10-15% of UK households

The economics of greenfield fibre build are still terrible in general, with even building in cherry-picked areas very hard to justify under current conditions, although the economics will improve over time as demand for speed increases

Moreover, once it is built it is built, and BT loses the wholesale revenue forever. Taking the hint and offering more reasonable wholesale fibre pricing may not be a bad option if Sky and TalkTalk persist

European mobile service revenue growth again disappointed in Q4, dropping slightly from -8.9% to -9.1%, with underlying revenue growth dropping a little further from -6.0% to -6.3%, again reaching a record low

There had been hopes that improved GDP growth would drive a volume rebound, that price declines would start to annualise out, and that declining out-of-bundle usage would wane in its impact as this usage declined. In the event, ongoing price competition from smaller operators, MVNOs and quad play offerings, combined with surging use of OTT communications platforms, have dominated trends

In the medium term, the development of 4G and Vodafone’s Project Spring may bring some much needed network differentiation back to the market, allowing pricing power to return to the larger operators. However, it will be 2015-2016 before these factors come into play: in the short term, the main source of optimism is consolidation

UK mobile market service revenue growth improved on both a reported and underlying basis by 1.2ppts in Q4, a very welcome result after six consecutive quarters of declining underlying growth. Reported revenue is still in decline, at -1.6%, but it is the most modest decline among larger European countries, and compares to -5.0% in early 2013 EE is still leading in 4G coverage and performance, with around twice the coverage of its nearest rivals of basic 4G, double speed 4G now covering around 30% of the population, and plans for quadruple speed 4G to launch in 2014. Vodafone may prove the biggest network challenger going forward, with plans to increase capex as part of its Project Spring initiative Maintaining (or increasing) the current level of pricing is key to the industry returning to revenue growth in 2014. We would note that the smallest operator, H3G, is fairly unlikely to return to being a price discounter and put pressure on market prices, leaving the onus on the ‘big 3’ to stay disciplined, with a small but significant risk from SIM-only MVNO offers gaining more traction

The French Professional Football League (LFP) is to auction its 2016-20 broadcasting rights next month, one year earlier than expected. The anticipated auction (and short notice) increases pressure on rival LFP broadcasters – a failure to renew their existing rights deals would unsettle their position for over two years

Due to uncertainty over the future ownership of Canal+ and the political background of Al Jazeera’s beIN Sports we believe that both would prefer to maintain the status quo: the top two weekly games on Canal+ and the other eight on beIN Sports

The LFP rights are precisely packaged to prevent this, and to force the two to compete at least for one lot. As the market leader Canal+ has more to lose, while beIN Sports could sustain its current complementary positioning with fewer games

Enders Analysis co-hosted its annual conference, in conjunction with BNP Paribas and Deloitte, in London on 4 March 2014. The event featured talks by 13 of the most influential figures in media and telecoms, and was chaired by Sir Peter Bazalgette.

This report provides edited transcripts of the talks given by seven of those speakers: James Purnell, BBC; Dido Harding, TalkTalk; Nicola Mendelsohn, Facebook; John Paton, Digital First Media; Mike Darcey, News UK; Ashley Highfield, Johnston Press; Michael Comish, Tesco