In this presentation we show our analysis of revenue growth trends for mobile operators in the top five European markets (UK, Germany, France, Italy and Spain). The historical analysis is based on the published results of the operators, although they include our estimates where their data is inconsistent or not complete. A copy of the underlying data in spreadsheet format is available to our subscription clients on request
Cable &Wireless Worldwide’s performance for the six months to September was weak but made to look worse by one-offs
Underlying performance continues to be hit by strong competition and loss of voice revenue, but the impact of this has been made worse by underinvestment in data centres and neglect of the wholesale and SME businesses
The outlook for the year to March 2012 is poor, in line with the June warning. Beyond that, further investment in hosting and related capabilities will be necessary, and we continue to expect modest growth
Vodafone Europe’s service revenue growth improved marginally in the September quarter, a very solid performance under tricky circumstances, helped by good competitive performances and judicious pricing measures
The combined Europe and group common function EBITDA margin was again held flat, despite continued smartphone adoption pushing up handset costs, with strong cost control again evident
Pricing, competitive, regulatory and cost trends are all going well; but macroeconomic trends are clearly not, and are likely to make an acceleration in the second half of the year very difficult
Openreach has announced large cuts in the prices of some important components of physical infrastructure access (PIA). A further substantial reduction in duct prices is possible as a result of an adjustment by Ofcom to Openreach’s regulatory asset value (RAV)
The reductions are helpful to the economics of bids by altnets such as Fujitsu for government funds to deploy rural next generation access (NGA), and to Virgin Media, as it expands its existing cable network footprint
However, the economics of NGA continue to strike us as challenging and we expect the impact of PIA on BT to be modest due to the remaining potential wholesale revenue, and BT Retail’s ability to use third party PIA-based networks
Nearly a year after rolling out Google TV in the US, Google has confirmed plans to launch its ‘smart TV’ operating platform in Europe and the UK by early 2012
To date, Google TV in the US has been a disappointment, with little broadcaster support and, until recently, expensive devices, resulting in low adoption
The content issue is likely to dog Google TV, both here and in other European markets; access to key broadcaster TV and video programming will be a major challenge
In this presentation we show our analysis of revenue growth trends for mobile operators in the top five European markets (UK, Germany, France, Italy and Spain). The historical analysis is based on the published results of the operators, although they include our estimates where their data is inconsistent or not complete. A copy of the underlying data in spreadsheet format is available to our subscription clients on request
After strong underlying improvements in growth and profitability in 2010, in H1 2011 H3G Europe’s service revenue growth was steady at 3% and margins only slightly improved to (underlying) EBIT breakeven
In the UK, service revenue growth accelerated to 7% (from -1% in H2 2010), with EBIT maintained at about breakeven, as the UK company’s ongoing strong contract subscriber growth fed through
Italy suffered roughly the opposite fate, with service revenue growth falling to -8%, as its recent subscriber losses fed through, and EBIT remained firmly negative
Vodafone Europe’s service revenue growth dropped by 0.5ppts to -1.3% in the June quarter, although most of this was due to a sharp MTR cut in the UK
Revenue in Spain was very weak due to a price re-adjustment, but trends elsewhere were broadly positive, with voice minutes growth improving overall
Medium term prospects are good, with MTR cuts fading, competitive performance improving and data growth likely to re-accelerate, but we expect declining growth in Turkey to drive a worse performance in the short term
BT’s plans to deploy next generation access, combined with state-aided rural broadband projects, look set to give almost three quarters of UK households access to high speed broadband by 2016
New wireless technology is a feasible substitute for wireline for some low-end users and in specific areas, but we do not expect it to have a major impact on high speed broadband deployment
BT Retail and Virgin Media will in effect move significant numbers of their customers onto high speed broadband, but without significant price reductions we believe that, even by 2016, consumers’ reluctance to pay more will result in two-thirds of households remaining on lower speed options
In this presentation we show our analysis of trends in UK broadband and telephony to March 2011, based on the published results of the major service providers. This quarter’s edition includes an updated outlook for broadband market subscribers and market shares to 2015.
Highlights in the quarter included broadband market growth moving back into line with consumer confidence, continuing strong broadband subscriber growth at both BT Retail and Sky, greater stability in the proportion of the market served by BT Wholesale and a significant price increase at O2. We project that, by the end of 2015, about 21 million households will subscribe to fixed broadband, and that Sky’s market share will exceed that of TalkTalk Group to rival that of Virgin Media.