BT’s revenue growth bounced back by 3ppts in Q1, and EBITDA growth surged into positive territory for the first time since 2018, enjoying significant bounceback as it lapped the start of the pandemic.

Some aspects of the bounce are temporary, but some business lines are yet to recover at all, and there are positive signs of an underlying return to sustainable growth across much of BT.

Openreach’s momentum continues to grow with much more to come, and VMO2’s switch to full fibre reduces a long-term upside but introduces no significant new downside in our view.

Openreach's new FTTP discount plan is focused purely on higher speed price discounts in return for accelerated adoption, with no further elements to disadvantage altnet new entrants.

The price discounts are, however, very aggressive and get more so over time, and allow Openreach CPs to undercut Virgin Media and retail altnets on gigabit pricing while still making strong margins.

The extra discounts do limit an upside for Openreach, but they should also stimulate FTTP take-up, promote market share gain from Virgin Media and altnets, and discourage further competitive build.

Market revenue growth improved to -1.4% in Q1 2021, a partial recovery being better than at any point in 2020, but still worse than at any point in 2019.

Next quarter the sports channel suspensions will lap out, driving strong (but temporary) year-on-year growth.

Longer-term revenue growth recovery will need backbook pricing pressure relief, which will start in Q2, and demand for ultrafast broadband.

BT ended a very challenging 2020/21 financial year with its worst quarter yet for EBITDA growth, as the third national lockdown impacted mobile, offices, pubs/clubs and installation revenue streams

There are many turnaround drivers ahead though, including price rises, backbook effects annualising, lockdown effect reversals, and full fibre benefits, but returning to revenue growth by the end of the year still looks challenging

The acceleration and expansion of fibre build is very positive in our view, but BT has given no guidance on the future benefits aside from capex returning to normal levels, which is doing it no favours with investors

After a strong post-pandemic rebound, Sky has the opportunity to leverage its strong reputation with consumers to meet the challenge posed by new competitors and the studios’ direct-to-consumer transition, establishing Sky Q as the ultimate gatekeeper of video subscription homes.

Sports rights costs in Germany and Italy have been cut significantly, while Sky’s spend on UK Premier League rights will decrease in real terms. Savings will ease the financing of the shift to original content, which, associated with owner Comcast’s NBCU output, anchors the aggregation strategy.

Fibre deployment in the UK and Italy presents a subscriber and revenue growth opportunity, and underpins the gradual shift away from satellite to online content distribution.

Virgin Media’s subscriber boom continued into 2021, despite a marked price rise in Q1, benefiting from lockdown and continued demand for higher speed broadband.

ARPU remained weak in Q1, suppressing revenue growth, but this will recover (somewhat) in Q2 as the price rise takes effect, countering the current disconnect between volume and revenue growth.

The merger with O2 is set to complete in June, with much operational pre-merger preparation already done, but the key strategic questions appear yet to be decided.

A move away from premium sport is long overdue from BT, with there having proved to be little strategic, 'halo' or other cross-over benefit to its core broadband and mobile businesses.

BT Sport has managed to dramatically increase its pricing since launch, with little evidence of significant net subscriber leakage, which has driven 'standalone' profitability and allows a partial or full sale.

A sale would not likely cover BT's full losses to date, but a partner could enhance the value of the asset, and an eventual full sale would reduce risk for BT and enable it to fully focus on its broadband and mobile core businesses.

Apple is bringing in privacy changes on iOS that could hurt ad-funded apps. 

Responding to platforms’ legitimate push for user privacy is a trial for regulators in the midst of building new online antitrust regimes. 

Antitrust rulings are chipping away at the App Store’s stringent terms of use, but reforms will keep it at the centre of the iOS universe. 

Spotify paid $5 billion in royalties last year to the music industry. Critics claim the $0.0038 per-stream average royalty rate is too low. However, this is largely due to high volumes of ad-funded listening, a core part of Spotify’s freemium model, and a defence against piracy. 

To silence the critics, the “Spotify Loud & Clear” site presents data on the distribution of industry royalties, which are heavily skewed to established artists. Only the top 5% of artists generate annual industry royalties above $1,000, though they take home less under their deals. 

The remaining 95% of artists on Spotify generate under $1,000 a year and use the platform mainly to reach fans that attend live gigs, their primary source of income, now halted by the virus. These artists’ problem is digital discovery, as Spotify’s playlists push hits rather than the midlist. 

Market revenue growth sunk back to -3% in Q4 from -2% in Q3, with further backbook pricing and lockdown effects to blame .

Backbook pricing will improve with numerous price increases announced, but these will only start to take effect in Q2 2021.

Demand for broadband and ultrafast looks promising, but will also take time to filter through to revenue, with Q1 again lockdown-affected.