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.   

Big tech capex is set to jump over 50% in 2024, fueling the current AI boom, and supporting the training and deployment of the next-generation of frontier models slated for release over the next 2-4 months

If these frontier models can deliver greater capabilities, and the returns to match, it will intensify the race to scale up capex even further to train ever more powerful models on ever larger clusters of chips

If returns do not flow to the frontier, then models become commoditised, with all of big tech able to capitalise on their application layer dominance. If they do, then outcomes are uneven and uncertain with the core cloud players racing for dominance and leaving the others behind

UK football rights values have pulled further away from European peers in a stagnant market, as telcos have withdrawn and tech companies remain selective bidders.

Sky and Canal+ have tied down key contracts until towards the end of the decade, while DAZN now has domestic rights for four of the top five European football leagues.

Tech players want live sport, but have distinctive demands and without new monetisation models they will not challenge pay-TV incumbents.

The UK altnets collectively lost over £1bn in 2023, with most metrics unrealistically distant from what they need to be for a sustainable model, particularly the smaller retail-focused operators.

Consolidation is essential for survival, and CityFibre at least has a reasonable case for long term sustainability with a wholesale model and Sky as a customer, and looks the most viable altnet consolidator in our view, with VMO2/nexfibre able to pick up the pieces should the sector fail.

A lack of long-term viability and related financing difficulties will dramatically slow network roll-out, reducing the altnet pressure on the rest of the sector even if consolidation improves penetration levels.

We analysed hundreds of ads on YouTube, the biggest online video platform. Direct response campaigns predominate, especially among finance, ecommerce and technology buyers.

YouTube on TV hosts more brand campaigns with unskippable >30-second ads. In the UK, YouTube viewing on the TV set will grow c.80% by 2030, changing the profile of YouTube advertising.

YouTube generates about 85% of its revenue from ads. We found it also guides user behaviour by ramping up ad load for logged-out users so that they log in.

UK news publishers are experimenting with generative AI to realise newsroom efficiencies. Different businesses see a different balance of risk and reward: some eager locals are already using it for newsgathering and content creation, while quality nationals hold back from reader-facing uses.

Publishers must protect the integrity of their content. Beyond hallucinations, overuse of generative AI carries the longer-term commercial and reputational risk of losing what makes a news product distinctive.

Far less certain is the role of generative AI in delivering the holy grail of higher revenues. New product offerings could be more of an opportunity for businesses that rely on subscribers than those that are ad-supported.

In the next fixed line regulatory review—TAR 2026—Ofcom is likely to maintain light regulation on Openreach’s pricing levels, while also maintaining strict restrictions on its pricing structures, which both help altnets. 

On other matters, none of the interested parties (Openreach/altnets/ISPs) look like getting exactly what they want, but by and large the industry will likely get what it needs—regulatory stability with a broadly pro-investment slant.

The next TAR in 2031 is likely to be more dramatic, but by our estimates, even a full return to cost-based charging will not result in significant wholesale price cuts, which is likely to be a relief to longer term investors in BT and the altnets alike.

The spatial computing ecosystem is on the uptick with the wider availability of head mounted devices (HMD). Apple and Meta’s commitment to developing HMDs is existential to conquer the enormous technical hurdles these devices continue to face. 

Apple has chosen to maroon the Vision Pro with a lack of controllers and other design choices making it reliant on mostly passive entertainment. In total contrast, Meta’s deep engagement in gaming and 3D experiences showcases the potential for the HMD category.

Live sports is the outstanding use case for TV experiences on VR headsets, with exclusive NBA VR programming on Quest bringing new levels of immersion and presence, while gaming, and its developers, will still remain the dominant driver for VR and MR for the rest of the decade.

In the past, broadcast TV and YouTube content has been poles apart—both in substance and the need states they served. This is changing, with the overlap in offerings growing 

We estimate that c.61% of viewing of YouTube Trending content is of videos that could be considered TV-like. Similar programming makes up c.35% of broadcast TV viewing 

YouTube’s videos are also becoming longer, raising audience tolerance and expectations, and allowing the service to compete in a broader range of genres. However, this will be challenged by monetisation limitations