FT has put majority stakes in Orange Sport and Orange Cinéma Séries on the block, and claims to have held discussions with News Corp. We think it unlikely that an investor would be interested in entering the French pay-TV market, dominated by Vivendi’s Canal+

We believe FT could find a buyer for Orange Sport in Disney’s ESPN, which could prove viable if a cross-retailing deal is reached with Canal+. A Eurosport merger is another option. Orange Cinéma Séries could be viable under a new owner, if it widens it distribution to other platforms

Now officially on the way out of the pay-TV production business, a welcome decision in our view, Orange can focus on improving the consumer value of the basic TV offering on the triple play marketplace

Subject to BBC Trust approval, Canvas looks almost certain to launch in spring 2011 after the OFT decided that it did not have the jurisdiction to review Canvas under the merger provisions of the Enterprise Act 2002. The OFT decision does not rule out complaints on other grounds, but the chances of persuading the regulators look very small

The launch of Canvas promises to strengthen significantly the free-to-air digital terrestrial platform, otherwise very limited compared with satellite and cable platforms in terms of bandwidth, but mass adoption poses numerous challenges and it is open to question whether Canvas will ever extend to more than half the DTT base

In the long term, it is hard not to see Canvas as an interim step in the growing convergence between the TV screen and the internet, raising the question of how successfully its PSB TV-centric approach can adapt to the coming challenges of the full blown digital age

TTG’s indicative full year financial results were solid, but were flattered by the acquisition of Tiscali UK in July 2009

Subscriber growth at TalkTalk is exceptionally strong thanks to effective marketing and a strong proposition, if somewhat at the expense of the acquired businesses

Guidance for the new financial year looks undemanding given additional uplift from Tiscali UK; further underlying progress will depend crucially on continuing strong growth at TalkTalk and old fashioned operating leverage based on a single set of platforms, rather than new developments such as high speed broadband or TV

Facebook CEO Mark Zuckerberg has set out a vision of the social network as the hub of a personalised internet based on real identities and connections – the so called ‘Social Graph’, with Facebook providing the infrastructure

Simplified tools for apps and new social plug-ins for third party sites will increase Facebook’s influence both on and off the core platform, but raise some privacy concerns

These initiatives should help to drive Facebook’s user growth and engagement and ultimately improve monetisation, which we estimate on a per user basis is now more than half that of Microsoft’s online properties

CPW grew its core European mobile handset distribution business in underlying like-for-like revenue terms by 3% in the March quarter, and its profits grew by 18% in the 2009/10 year, although connection volumes and actual revenue fell during the quarter

Growth is improving with the recovery, but not dramatically, as its strong competitive performance during the recession is unwinding to some extent. Nonetheless, 2010/11 should see continued improvement, with handset trends still generally going in CPW’s direction

The company is currently more than covering the start-up losses at its ‘big box’ consumer electronics business in the UK through steady growth at CPW Europe and dramatic growth in the US, and should continue to do so in 2010/11. However, thereafter there is far more uncertainty, as the big box business will have to start trading well to prevent accelerating losses, and we have no visibility over its prospects as yet

A hung Parliament now appears the most likely outcome of the UK general election on 6 May, giving the Liberal Democrats influence, in terms of votes and seats, over the next government

Because the Lib Dems are ideologically closer to Labour than to the Conservatives, we anticipate their influence will favour the policy and regulatory status quo in media and telecommunications in relation to the proposals made by the Conservatives

This influence would be strongest in a coalition of Labour and the Liberal Democrats, but also would persist in a Conservative minority government, reducing the likelihood of a new legislative framework for media as proposed by the Conservatives

The outlook for ad-supported UK media businesses is brighter in the short term than in the medium term, irrespective of who wins the election, since fiscal tightening is inevitable early in the next parliamentWe expect the Conservatives, should they win, to favour commercial media (Sky, ITV) over the BBC in general and in particular in the upcoming negotiations on the licence fee settlement post 2013Super-fast broadband networks enjoy cross-party support, but Labour’s 50 pence landline tax was blocked by the Conservatives, who prefer to use a small portion of the BBC licence fee

Internet advertising rose 4.2% YoY in 2009 on a like-for-like basis in the UK, according to IABUK/PwC, due to growth in search, with classified and display down; however, previously unreported spend, including Facebook, pushed the total to £3.54 billion

Last year, for the first time, Google accounted for over half of spend (versus one third in the US) and 12% of UK ad revenue, a market presence that is significantly larger than in the US

Including Facebook, now No.1 for display, and increased spend on search, our 2010 growth forecast is 11%, pushing total spend to £3.82 billion or 25% of UK advertising

H3G Group organic service revenue growth was just 0.2% in Europe in 2009, with EBITDA now roughly breakeven and cashflow remaining firmly stuck in negative territory, and lower subscriber net adds driving most of the EBITDA improvement

H3G UK is outperforming the UK market, but only just, and remains loss-making. Its prospects for 2011 are good, with its network share roll-out likely to have been completed and lower termination rates likely to be implemented, and the Orange/T-Mobile merger could provide significant long term benefits, but it will still require significant investment to gain scale

H3G Australia is now a sound business after the merger with Vodafone Australia, but all of the European businesses are sub-scale, with significant further investment and/or M&A activity required to reach sustainable profitability

The proposal by the Conservatives to remove or to moderate Contract Rights Renewal if elected would put ministers back into the thick of competition issues

The Conservatives strongly supported the move to make the competition authorities independent of government in Enterprise Act 2002, and should this stance be reconsidered, the regulatory landscape for business would acquire a political dimension, to the detriment of UK business generally

CRR is a side issue and the Conservatives could be better advised to examine closely the marketplace for TV advertising sales in order to make it more transparent and thus work better for the industry as a whole