Service revenue growth remained firmly negative at -1.0% in spite of inflation of +2.1%, as competition remains intense and pricing power weak.
Operators are guiding to a 2025 EBITDA performance that is broadly in-line with, or weaker than, their 2024 performance, with SFR choosing to abstain from guidance this year.
In-market consolidation cries are getting louder, with France, Italy and Germany the most obvious candidates.
2024 was the first year in history in which the network operators lost contract subscribers. MVNOs added 1.7m.
In-contract price increases are dominating revenue trends, with a somewhat flatlining outlook on an underlying basis but boosted by accounting technicalities.
We expect the Vodafone3 merger to close on 1 of May which has implications for buyout timing and will prompt higher capex, some early network upsides, and big strategic decisions for both Vodafone3 and BT/EE.
ITV saw advertising revenue growth in 2024 (+2% to £1.8 billion), aided by the Euros. This balanced some of Studios’ 6% decline (to £2.0 billion), however, total external revenues were down 4% (£3.5 billion)
Despite the revenue drop, profits improved, with group adjusted EBITA increasing 11% to £542 million. This was aided by a unique set of circumstances which drove Studios’ profit to a record high with cross-company cost-cutting showing its benefit
ITV is making strides in its transition to digital but even though the revenue story is largely positive, the company continues to leak engagement and viewing share
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.
The ‘big 4’ ISPs’ combined revenue remained in decline in Q4 2024 at -0.4%, partly due to a BT accounting quirk but mainly due to altnets gaining share
ARPU growth of 2% is roughly compensating for subscriber declines of 2%, but this ARPU growth is likely to weaken in 2025 as various boosts drop out
A recovery will come as the altnets slow in H2 2025 (if not before) due to their restrained expansion, which cannot come soon enough for the big ISPs
VMO2 had another mixed quarter to end a difficult 2024, with revenue growth improving but EBITDA growth falling, and other metrics mixed at best.
The company hopes to put this behind it with guidance for both revenue and EBITDA growth in 2025, a tough ask given current momentum.
Ultimately achieving or exceeding this may depend on altnet pressure receding, which we expect it to do, but perhaps more towards the end of the year than the beginning.
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.
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.
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.
YouTube is now the UK's fifth most-used venue for finding news, and a key focus for UK broadcasters and publishers. They made up a quarter of UK trending news videos in 2023, competing with native YouTubers and US broadcasters
We find that YouTube’s algorithms tend to funnel users from news content towards non-news within a few videos. The reverse trend, of non-news to news content, is almost non-existent
We do not find evidence of widespread brand safety concerns impacting advertising on news videos, though publishers still note YouTube is better for exposure and consumption than it is for generating revenue. The ad load is largely in line with other genres