In this presentation we show our analysis of revenue growth trends for mobile operators in the top five European markets (UK, Germany, France, Italy and Spain). The historical analysis is based on the published results of the operators, although they include our estimates where their data is inconsistent or not complete. A copy of the underlying data in spreadsheet format is available to our subscription clients on request.
Mobile operators, services and handset makers are diverging – they all come to the MWC but have increasingly little to say to each other as their businesses move in very different directions
In the context of -5% European mobile revenue growth, the MNOs at the MWC were a sober bunch, focusing on industrial services, defensive moves around messaging, and a (not unreasonable) plea to regulators for some relief
As competition in Android intensifies between hundreds of black plastic rectangles, the picture for OEMs looks tough but Google’s failure to make Android work well for developers may also start to bite, leaving an opening for Nokia and Windows Phone
In this presentation we show our analysis of trends in UK broadband and telephony to December 2011, based on the published results of the major service providers.
Highlights for the December quarter include a return to the lower rate of broadband market growth seen prior to mid-2010, accelerating growth in the number of subscribers to high speed broadband and the continuing increase in market share of BT Retail and BSkyB at the expense of virtually all other players
This quarter’s edition includes a look at Openreach’s wholesale FTTP On Demand, planned for launch in 2013.
Following announcements by Virgin Media to double the speeds used by most cable customers, and by BSkyB to launch high speed broadband offer in April based on Openreach’s wholesale VDSL product, by 2016 we now expect about half of UK residential broadband subscribers to be on high speed broadband, i.e. xDSL or GPON at 30 Mbit/s plus, and DOCSIS at 20 Mbit/s plus
The launch of the fourth mobile network operator in France has so far met with dramatic success, gaining around 1.5 million subscribers in the first month, driven by rock-bottom pricing and a clever mass media PR campaign
Its tariffs are, however, so low that it is very hard to see how they are sustainable in the longer term. In the short term, Free’s economics are boosted by asymmetric voice and text termination rates that result in other operators’ customers effectively subsidising Free subscribers by €5 to €10 a month
This arbitrage is very likely to disappear over the next two years, but Free Mobile can increase its prices when this occurs. Its challenge will be to acquire a critical mass of subscribers before this point, and to retain them thereafter
Enders Analysis co-hosted its annual conference, in conjunction with BNP Paribas and Deloitte, in London on 19 January 2012. The event featured talks by 13 of the most influential figures in media and telecoms, and was chaired by Sir Peter Bazalgette. An edited transcript of notes taken during the speaker presentations follows.
The speakers were Sir Martin Sorrell (CEO, WPP), Glen Moreno (Chairman, Pearson), Martin Morgan (CEO, DMGT), David Levin (CEO, UBM), Dan Cobley (MD, Google UK & Ireland), Mike Pocock (CEO, Yell), Vittorio Colao (CEO, Vodafone), Charles Dunstone (Chairman, Carphone Warehouse, TalkTalk Group), Stephen Carter (President, Alcatel-Lucent EMEA), the Rt. Hon. Jeremy Hunt MP (Secretary of State for Culture, Olympics, Media and Sport), Neil Berkett (CEO, Virgin Media), Liv Garfield (CEO, Openreach) and Ed Richards (CEO, Ofcom).
Volume growth remained negative, but manageable, and there appears to be little evidence that TalkTalk’s value proposition is losing its appeal
Strong operating leverage, cost reduction and the growing popularity of uncapped bundles has enabled a significant upward revision to EBITDA guidance. However, free cash flow guidance remains unchanged
Management’s confidence regarding churn and further efficiency gains strikes us as credible, but we remain cautious about the potential for strong cash flow growth beyond this financial year
Qatar’s Al Jazeera will launch its French pay-TV channel by this summer, showing weekly Ligue 1 and Champions League games, but it has yet to disclose a business plan and distribution deals
The new channel is a complement to Canal+, which broadcasts the most attractive games. Al Jazeera would need to obtain distribution on the Canal+ platform
Even if such a deal were to be struck, Al Jazeera would struggle to break even
Virgin Media’s plan to double the line speed of most of its broadband customers is the latest in a series of moves to retain its position as the leading high speed internet service provider in the face of BT’s deployment of next generation access (NGA)
The move presages further price increases and an upgrade to offers for new cable customers, but is in the first instance about retaining the large existing base of cable customers currently on 10 Mbit/s
The £150 million or so of incremental capex required is small in the context of NGA, but the impact both on cable churn and demand for higher speeds across the wider market is by no means certain
This report on the French broadband market examines growth trends in 2009 and forecasts to 2012, updates our previous assessments of the commercial significance of IPTV in the triple play (a bundle of broadband, telephony and TV), and details the state of fibre-to-the-home (FTTH) deployment
Shrugging off the recession (milder and shorter than in the UK), the French broadband market is set to reach 19.6 million connections by the end of 2009, up 1.9 million on 2008 – only 12% less than the level of net adds of 2008. With 2009 better than we expected, we now anticipate a sharper slowdown in net adds in 2010, with 1.4 million net adds projected. We still expect the total to reach 22.8 million connections by 2012 (70% household penetration)
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