Market revenue growth in the UK residential communications sector continued to be robust in Q2 2014 at 5.4%, a slight increase on the previous quarter, with continued volume growth and firm pricing countering weak call volumes and the negative impact of a VAT legislation change hitting Virgin Media and TalkTalk

BT was the fastest growing out of the ‘big four’ in revenue terms in Q2 even after the direct revenue impact of BT Sport is excluded, a remarkable turnaround after being in last place a year ago, driven by both volume and ARPU growth continuing to accelerate, with fibre helping both

Since the end of Q2, promotional activity has already intensified, particularly from BT and Sky around the start of the new football season, and churn is likely to be under more pressure at all of the operators, although the disruption is likely to be less severe than that experienced around the launch of BT Sport last year, and we expect all of the major players to continue to grow in net terms

TalkTalk’s June quarter results revealed solid subscriber trends, with broadband, fibre, line rental and TV net adds all either matching or slightly improving upon the previous quarter

Revenue growth dipped down on the previous quarter (3% vs. 5%), but the price increases in May/June have yet to have a full quarter’s effect, and the company remains confident in its full year guidance of at least 4%

Churn dropped again on the previous quarter, and the company makes a strong case that its triple play strategy should reduce it further, but the big test will be whether it can continue the trend over the rest of the financial year

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

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

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

The UK residential communications sector maintained strong revenue growth of 5% in Q4 on a reported basis, or 4% underlying, bolstered by strong volumes and solid pricing, with recent price increase implementations supporting the latter going forward

It is still hard to see a very significant competitive impact from BT Sport, with BT’s broadband net adds up by only 20k-30k on a year earlier, but the impact on costs is very clear, with increased sports rights costs, increased marketing costs and pay TV box/device subsidies driving up the cost base of all operators

Looking forward, in the short term market volumes are likely to be suppressed by recent bad weather lengthening provisioning times, and the detailed timings of price increases will suppress ARPU growth. In the medium term the outlook is much stronger, although the prospect of increased competitive activity around the next Premier League rights auction still casts a shadow

The Court of Appeal has judged that the Competition Appeal Tribunal erred in law in its rejection of the Ofcom Wholesale Must Offer remedy for premium sports by failing to deal adequately with all of Ofcom’s competition concerns but agreed with the Competition Appeal Tribunal that Ofcom had acted within its regulatory powers Sky’s appeal against the 2010 Ofcom decision will therefore be re-heard at the Competition Appeal Tribunal and we believe the likelihood is that the Wholesale Must Offer remedy will be approved, while the jurisdiction issue may yet have some life if Sky takes its appeal to the Supreme Court The seven year old pay-TV saga is far from over as major changes have occurred in the last four years. Irrespective of the progress of the Competition Appeal Tribunal review, we think it will have little bearing on the outcome of the Premier League auction in light of the strategic objectives of Sky and BT

TalkTalk enjoyed a healthy December quarter, with broadband net adds steady, TV net adds accelerating, churn falling and revenue growth accelerating to 5%

Revenue growth was boosted by a big wholesale contract win and the timing of line rental price increases, but the company did achieve a complex price restructuring with no negative ARPU impact

With churn heading down again, the company appears to have successfully weathered the BT Sport-related storm, leaving it on track to achieve its aims