A change of control clause triggered by Discovery’s takeover of Scripps will grant BBC Worldwide the option to acquire the 50% of UKTV that it does not already own

With a possible price in the vicinity of the £339 million paid by Scripps in 2011 it is by no means certain the BBCW could proceed alone—so a new, minority partner may well be necessary

Discovery, on the other hand, may be keen to acquire full ownership of UKTV, while retaining a licensing arrangement for the BBC’s content. A channel portfolio containing the best of Discovery, Scripps and UKTV content built on UKTV’s strong EPG positions would transform Discovery in the UK

UK residential communications market revenue growth fell again to 1.2%, with weakening ARPU growth the main driver. New customer pricing remains flat to down, and existing customers are being increasingly discounted, fuelling the ARPU weakness

High speed broadband adoption is proceeding apace, but the high speed premium is fairly thin, muting the impact on ARPU. Regulated wholesale price cuts from Openreach finalised today and due in April 2018 will not help

Looking forward, the March quarter will benefit from price timing effects at BT and Virgin Media, but we fear that the rest of 2018 will follow the current downward trend and the operators will need to adjust to an ex-growth environment

TalkTalk’s subscriber growth picked up a little in the quarter, but ARPU growth turned back negative, leaving consumer revenue still declining despite the heroic efforts it has made to turn around its subscriber growth in a slowing market

It is expecting even stronger subscriber growth next quarter, but it may need this to maintain ‘headline’ revenue growth given falling ARPU, and the high marketing costs required to achieve this have driven a reduction in EBITDA guidance

The company’s FTTP plans are less dramatic than they first look, with only a £100 million investment commitment over five years. The economics of the build look very challenging, but TalkTalk is minimally exposed to these