European mobile service revenue growth recovered to nearly reach positive growth in Q3, improving a whole percentage point over the previous quarter to -0.2%

The main driver of the improvement was continued ‘more for more’ price increases combined with a lack of price wars at the lower end, although the current detente does not feel very stable. Furthermore, the pressure on growth from the general trend towards SIM-only and the consequent lower contract revenue looks unlikely to alter

Revenue growth of around zero as almost achieved this quarter is sufficient for the operators to grow the bottom line, but not to transform their network coverage in the style envisaged by 5G enthusiasts – more substantial growth is needed to cover the costs of such a step-change

European mobile service revenue growth worsened slightly in Q2, dropping to -1.2% after three consecutive quarters at -0.8%. Southern Europe significantly outperformed the North, reversing the regional trend of recent years

EU roaming rate cuts and the increase in SIM-only subscriptions were the two main negative, albeit temporary, factors with the former particularly impacting northern European operators with heavy roaming exposure and the latter more varied in its impact across the EU5

Mobile service revenue growth was thus quite robust given these factors, helped by price firming in a number of markets. Looking forward, while the negative factors are likely to continue in the short-term they will drop out in two years in the case of roaming cuts, and SIM-only, whose impact is mostly profit-neutral to operators, will also reach an equilibrium in due course, and the market's overall resilience is encouraging

The DCMS has published the government’s response to its consultation on the balance of payments between television platforms and public service broadcasters, the so-called issue of retransmission fees

One sure outcome is that Section 73 of the Copyright, Designs and Patent Act (CPDA) 1988, which has hitherto protected cable operators (i.e. Virgin Media) from having to pay retransmission fees, is outmoded and will go

But, we now have a disconnect. The government has stated unequivocally that it expects the continuation of no net carriage payments between the licensed PSBs and the platform operators and may consider legislative changes to ensure this. And yet ITV sees the government response as a welcome first step towards their introduction

European mobile service revenue growth was flat at -0.8%, while underlying country movements were somewhat more dramatic. The key highlights were Italy returning to positive growth driven by pricing stability, and France showing worsening growth decline for the first time in over two years impacted by challenger telco pricing cuts

An assessment of these challenger telcos highlights a somewhat precarious position, as continued price aggression yields diminishing incremental gains, and they all remain some way from gaining the scale to achieve profitability

The only incentive for challengers to remain aggressive is as an encouragement for their competitors to buy them; increasing regulatory hurdles to consolidation would remove even this incentive, leaving price increases as their only rational route to profitability

France Télécom’s Orange TV premium strategy presents an interesting example of diversification into low cost ‘light’ pay-TV offers by an incumbent telecoms operator. Orange Sport and Orange Cinéma Séries are offered exclusively to Orange's 2.55 million TV subscribers, and five quarters after launch, adoption is 20%. This report draws several lessons on this type of venture for other incumbent operators

The final Ofcom statement on the future of PSB advocates fixing the commercial PSB crisis by designating Channel 4 as the core alternative provider of public service programming to the BBC, and freeing up ITV and Five commercially by means of considerably lightened PSB obligations

The fundamental issue of the Channel 4 (or any other) solution is funding the new commercial PSB model. Eyes are now being set on a Channel 4 partnership with BBC Worldwide, centred on its UK assets as the marriage made in heaven

Another major recommendation of the Ofcom PSB proposal is the abolition of the national Channel 3 breakfast time licence, currently held by GMTV, which is running a viable business with its own sales force. This recommendation appears at odds with Ofcom’s commitment to plurality in news provision and its statutory duties to encourage competition in the communications industries

Ending a simmering commercial dispute, Vivendi’s Canal+ has agreed to distribute its packages to France Télécom’s Orange TV satellite customers, allowing Orange to relaunch its DTH platform (targeting 4 million customers off the DSL TV footprint) after its dismal ‘do-it-alone’ first six months

Canal+ recruitments will benefit from the resumption of active marketing for its packages over Orange TV platforms, after a poor year for subscriber growth

Canal+ catch-up TV will now be available to all Orange Canal+ DSL TV subscribers, as it is to those on Free, where it is very popular, plus Orange satellite subscribers, thus giving Orange back the leadership position on IPTV in France

Iliad’s 2006 results were solid with broadband subscriber growth on target, DSL market share up one point to 19%, ARPU up 7% to €34.5/month and churn (enviably) at just below 1% per month. Over 1 million of Iliad’s subscribers have dropped France Télécom line rental and Iliad now completely owns those fixed-line telecoms customer relationships