C&W Worldwide’s performance over the year to March was weak, with the most meaningful metrics showing positive but very low growth
The sharp decline in the mid-market business appears to be over, but price pressure and accelerating loss of ‘traditional’ voice revenue is preventing further progress
Guidance for the year to March 2012 is uninspiring. Beyond that, growing momentum in cloud services and the overseas businesses should generate more significant progress, but organic growth looks set to remain modest
Revenues and profits continue to crash at the directory giant as local and small business expenditure shifts to cheaper online media
We believe Yell’s challenges may be less about share of voice, and more about how to absorb the pace of structural change – and to operate its business effectively from a much lower top-line
Tough conditions in all territories – UK, US, Spain and Latin America – have accelerated structural change, but Yell has some advantages over the start-ups, search algorithms and social networks that surround it
Some of Ofcom’s proposed wholesale charge controls for Openreach fixed access services sound stringent
However, we estimate that the overall financial impact on BT and other players is likely to be very small
We do not expect the proposals to result in changes to many retail prices, but they should tilt the playing field slightly in favour of BT Retail’s competitors, particularly smaller providers of broadband and business services