This report explains Ofcom’s ongoing review of Openreach’s financial framework, why it is important, the myriad factors involved, our view on the likely outcome and the implications for BT and unbundlers, in particular Carphone Warehouse and BSkyB
Carphone Warehouse had a solid quarter, and its expectation of a currency-aided 9-10% growth rate in 2008/2009 distribution revenue looks achievable, as does guidance of 4-5% growth in fixed line revenue, unless loss of telephony-only customers accelerates
H3G Group’s growth continued to slow in H2 2007, and it is now growing at just 6%, versus 10% 6 months ago, with falling ARPU combining with static subscriber net additions
O2 this week announced changes to its contract tariffs; however, these will have limited impact for most of their subscribers, and the reductions to their data pricing only bring them into line with changes the other operators have already made
This report considers recent activity concerning the radio sector’s Digital Audio Broadcasting (DAB) platform and examines the implications, particularly in view of the recent establishment of a government working group examining the future of digital radio, and given weak consumer acceptance of DAB. It concludes that overcapacity of DAB spectrum is an issue that will only be exacerbated by the planned launch of a further DAB national multiplex by Channel 4 in 2008
Distribution growth improved considerably (retail grew 13% versus 8% last quarter), with strong contract sales more than counteracting a relatively weak prepay performance
H3G has made great strides this year, but these have mainly been in terms of reported subscribers and market perception rather than in fundamental terms. In this report we examine in depth both its global business model and the all-important funding available in order to assess the likely future for the business, and its subsequent impact on the GSM operators.