The CMA's provisional findings on the Vodafone/Three merger reiterate its concerns around the impact on the retail and wholesale market but its previous issues regarding mobile towers sharing with BT/EE have been satisfied 

Crucially, the CMA seems somewhat dismissive of structural remedies, although hasn't ruled them out entirely. Remedies sought in the form of network and pricing commitments seem somewhat unnecessary, but nonetheless workable 

We now expect the Vodafone Three merger to gain approval in December, with remedy detail negotiated over the coming months—a very significant positive development for the sector 

Service revenue growth dropped off by 2.7ppts this quarter, and into negative territory, as operators in all markets suffered weaker growth
 

Operators in France and the UK implemented price increases this quarter but re-contracting absorbed any positive revenue impact. In Italy, regulatory intervention thwarted operator plans to raise prices
 

Increasing competitive intensity in France and Germany comes at a time when operators can ill-afford ARPU dilution and high churn
 

A subscription funding model would be antithetical to the BBC’s public service mission, necessarily ending universality of access and undermining its breadth of content. 

Options like separating out “public service” content from other programming would result in a decline in news consumption, while the subscription model would risk sustainability and encourage short-term thinking. 

Further, there are technical roadblocks to executing this model, meaning that it is not feasible until long after the end of the current Charter in 2027.

SpaceX and its Starlink satellite network have made headlines dangling a vision of free emergency service coverage direct to all mobile devices, undoubtedly connected to its ongoing battles for FCC approval.

Starlink is the clear leader in the D2D space and almost certainly will be the first to launch its service. AST Space Mobile, backed by various mobile operators (including Vodafone) is lagging significantly behind, having not yet launched any commercial satellites.

The UK is however a relatively unfavourable geography for D2D, due to its high latitude and relative density, and we don't expect any launch of commercial service in the UK by Starlink or AST Space Mobile before 2026.

Service revenue growth was broadly flat at 1.7% as improvements in Germany offset weaknesses in Italy.

The impact of price increases has been mixed, with subscriber losses dulling their upside, and the mixed picture looks set to continue into Q2.

The market continues to be challenging with elevated competition at the low end, pressure from some regulators to increase network coverage, and a somewhat soft EBITDA outlook.

Recently many countries, particularly in Europe, have moved away from funding their public service broadcasters via a licence fee.

Three main models have been adopted in its place: a state grant system, a ring-fenced income tax, and a premises levy—nowhere has chosen to fund PSBs solely by subscription or advertising.

Outcomes vary: Germany shows that a successful transition relies on years of deliberation and consensus, whilst Italy and France underline the perils of insecure funding arrangements.

On 4 June 2024, Enders Analysis co-hosted the annual Media and Telecoms 2024 & Beyond Conference with Deloitte, sponsored by Barclays, Financial Times, Salesforce and Adobe. 

With over 580 attendees and over 40 speakers from the TMT sector, including leading executives, policy leaders, and industry experts, the conference focused on how new technologies, regulation and infrastructure will impact the future of the industry. 

This is the edited transcript of Session Three, covering: consolidation in the telecoms sector; fixed-mobile convergence; and the future of the fibre industry. Videos of the presentations are available on the conference website.

The BBC plans to launch four new digital music stations as extensions of Radio 1, Radio 2 and Radio 3 and enhance 5 Sports Extra, all subject to regulatory approval.

Commercial radio is flourishing due to continuous innovation, while in stark contrast the BBC has experienced large audience losses, especially among the young.

The BBC should be able to launch new services— subject to competition assessments—while Ofcom should consider the impact of the total station regardless of whether delivery is broadcast or online.

Vodafone's promise of growth from FY26 has credibility given some headwinds specific to FY25 and some tailwinds emerging thereafter. 

In the meantime, the issues over the coming year extend beyond TV losses—with fixed in Germany proving difficult to turn around and the challenge from diminishing in-contract price increases is a significant one (for many telcos). 

Currency movements continue to absorb all notional growth (and some) and look set to continue to do so next year. With the company's FCF just half what it was two years ago, it is little wonder that Vodafone halved its dividend payout.