Mobile growth improved very marginally to -3.6% this quarter as roaming revenues were harder hit and competitive intensity bounced back, but usage recovered from the lockdowns in Q2 and cuts to intra-EU calls were annualised.

Italy’s fortunes took a turn for the worse as roaming hit particularly hard and Iliad resurged. After a spate of downgrades to the outlook last quarter, there were some tentative upgrades in Q3 although the tone remains cautious.

The diminished drag from roaming is the primary positive driver from here. Although lockdowns of some degree are in place in Q4, their impact will be less severe than those in Q2.
 

On 1 October, Google CEO Sundar Pichai announced $1 billion for worldwide news publisher partnerships for a novel News Showcase product, helping them to distribute their content to a new audience.

It is an important milestone: for the first time Google will pay publishers to curate content in the Google News app (initially), and to provide unpaywalled access to articles on publishers’ websites that users can click through to.

In so doing, Google is defusing the simmering conflict with publishers in major markets, and showing policy-makers its willingness to collaborate with a news industry facing existential threats.

Growth deteriorated by 3.5ppts, with the UK the weakest and Italy most robust thanks to its early onslaught of COVID-19, usage pickup in a largely pre-pay market and reprieve from a particularly competitive environment.

More operators (Orange and Telecom Italia) cut their guidance at the Q2 results and others (Deutsche Telekom and Iliad) sounded a note of caution regarding the likelihood of them reaching their full year targets.

The outlook for next quarter is mixed—roaming revenues will be even harder hit and competitive intensity is bouncing back but where usage has been depressed it will begin to recover well post-lockdown.

Times Radio launches as an ad-free commercial speech radio service on DAB and online. By extending brand reach, it forms part of the marketing funnel to convert listeners into subscribers.

Radio is remarkably resilient for a traditional mass media, and this arrival will complement the strong commercial sector and the mighty Radio 4.

Timing will be a revenue challenge, but this bold, cost-effective, intelligently deployed experiment comes as the news industry is most at risk, a welcome innovation for readers and listeners—and for the sector.

European mobile service revenue growth strengthened very slightly to -0.3% this quarter but, with many positive and negative factors at play, it would be wrong to conclude that we evidenced a convincing improvement in momentum.

Most operators have reiterated their financial guidance in spite of COVID-19 but there is caution from Vodafone and those exposed to sports rights (BT and Telefonica).

The outlook benefits from continued lockdown measures (reducing churn and spin-down) and the annualisation of some financial drags from the middle of next quarter. However, competition in Spain remains intense and the sector is exposed to any economic downturn.

Journalism is on the precipice with more than £1 billion likely to fall off the industry’s topline. Several years of projected structural revenue decline in advertising and circulation have occurred in just the past few weeks of the coronavirus pandemic, with no letup in sight.

The UK’s rich heritage of independent journalism is at risk, with responses by Government and ‘big tech’ multinationals welcomed but ultimately inadequate. We make two further recommendations for engagement in this report.

Journalism enterprises from the small, local and specialist outfits through to national household brands will either fail or remain on a path to future failure.

European mobile service revenue growth improved by 1ppt to -1.2% primarily as a consequence of diminished competitive intensity in France. Trends elsewhere were largely flat.

The mobile sector is playing an important role in tackling COVID-19 and is likely to be relatively resilient in the short term with a broadly neutral financial impact. Longer term it will be exposed to the fortunes of the economy.

There are reasons to believe that the improvement in trends evidenced in the last quarter may continue as churn reduction takes the heat out of some markets, cuts to intra-EU calls annualises out and for most countries, end-of-contract notifications will only begin to impact in 2021.
 

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

Both the commercial and BBC radio sectors generally seem to be in good shape, with radio listening also appearing robust. However, this masks a steep decline among younger adults that shows no sign of slowing down

With radio content available at the swipe of a finger, the linear schedule becomes less relevant, and the challenge broadcasters face is to create online hooks for the broadcast output

News Corp’s acquisition of TalkSPORT will open up new business opportunities as well as consumer engagement across The Sun and TalkSPORT and may prove an important milestone for the Sun brand