Geopolitical clashes between the US and Europe were a barely concealed undercurrent at this year’s MWC, with European tech regulation at odds with US moves, and telcos pitching for regulatory favours on firmer ground than they have had for years.

Perhaps the largest impact is on the satellite industry, with Eutelsat OneWeb having been given a new lease of life as the EU champion versus a now disfavoured SpaceX/Starlink.

AI was of course the talk of the town, but largely in ways that are tangential at best to traditional telcos, with the necessary building blocks for telcos to play a big role (i.e. network APIs) still needing much work.

With the formation of Vodafone3, we envisage continued intense competition at the low end of the mobile market, a ramping up of pressure at the top end over time, and some opportunities in the short term.

New information on spectrum trading confirms the view that BT/EE will be most capacity constrained, but with various strategic options available to it.

Expected EBITDA growth of 9% p.a. at Vodafone3 would allow Vodafone Group to almost double its excess FCF. Budgeting for buying CK Hutchison’s stake, however, may curtail Vodafone’s spending over the coming years.

Telcos are increasingly developing APIs to share selected network data with third parties, with the goal of supporting useful end-user applications.

Capabilities are still nascent, but the potential is real. Telcos need to adopt a pragmatic approach that looks to match API capabilities to useful products, and build increasing scale over time.

Security is the largest near-term opportunity for API products, but AI is the key emerging area, with telcos potentially able to play an ambitious role in providing APIs to help manage the growth of autonomous AI agents.

Disney's phase of consolidation began with profit growth for its streaming business, pushed up by price rises with subscriber numbers reasonably flat. Emboldened by less churn than expected, Disney+ will be more expensive sooner rather than later

Disney+'s UK reach—a proxy for subscriptions—remains firm but under pressure with engagement materially suffering as the flow of new programming has slowed. Library content is D+'s strength, but viewing of it is correlated with new releases

The creation of sports channel bundle Venu ran the risk of accelerating the decline of Disney's linear business. The service's delay and failure to launch may have given time for the company to reappraise its approach to linear

Broadcaster reach and viewing fell in 2024, but the decline slowed as BVOD growth increasingly makes up for linear decline and the BBC’s viewing grew year-on-year. 

SVOD penetration and engagement returned to (slight) growth in 2024 and video-sharing platforms are increasing their share of TV set viewing.

Broadcasters still offer a wider array of programming than SVODs, but they are expanding their offering, as is YouTube.

Vodafone has signalled a tougher outlook in Germany primarily due to a worsening competitive backdrop for mobile.

Although Vodafone has reiterated its guidance for the full year, this now relies heavily on developing countries, with currency risk emerging for FY26.

Investors are likely to be sceptical of the company’s “ambition” to grow in Germany next year, with this seemingly predicated on an improving competitive environment. Nonetheless, the company can point to some early fruits of its turnaround endeavours there, and next year’s trends should be better than the current ones regardless.

Global streamers have expanded their US premium sports coverage, but this will be difficult to replicate in Europe.

The main obstacle is much lower advertising revenues in European sport.

The concentration of European football rights and small pools of buyers mean that premium sports must be retailed on an opt-in basis.

Service revenue growth dropped further to -1.7% this quarter as pricing remains under pressure and in-contract price increases no longer benefit

Competition is heating up in Germany and France, and Digi is taking an aggressive stance as it enters the Portuguese and Belgian markets

While there is increasing awareness that investment levels in Europe are compromised by the current market structure, support for in-market consolidation remains lukewarm at best at the EU level

The CMA has approved the merger of Vodafone and H3G, paving the way for the UK’s largest mobile network operator.

Remedies are in place to ensure pricing stability in the short term, with the increase in sector capacity keeping the pricing side of the equation in check over the longer term, together with network quality upsides for users.

This is the right outcome in our view, with the alternative of a slow, painful retreat by H3G much less desirable for the industry. BT/EE will face the greatest challenges in adapting to the new market structure, with upward pressure on capex spend for all network operators.

Broadcasters have made considerable progress in becoming platform agnostic over the past three years, delivering innovative ad propositions offering greater targeting, flexibility and measurement. 

They would welcome the opportunity to work with advertisers to explain the complexity involved in delivering linear and digital campaigns. 

Broadcasters believe that although TV advertising is transitioning to digital, legacy share deals and reliance on pricing relative to ITV1’s station average price (SAP) continue to hold the market back. Potential amendments to CRR may allow for a smoother digital transition, benefitting the entire ecosystem.