The Competition and Markets Authority (CMA) has provisionally found that Fox’s acquisition of Sky is against the public interest on media plurality grounds, although it could proceed with an appropriate remedy

The CMA found the merger would give the Murdoch Family Trust (MFT) and family members “too much influence over public opinion and the political agenda”

The CMA now enters the challenging remedies phase. Fox could offer an Editorial Board for Sky News pending finalisation of Disney-Fox (by 2019). Third parties seem likely to continue to seek to prohibit the merger

The Italian league, unhappy with broadcasters’ bids of €830m, are now holding talks with Spain’s Mediapro, who has offered €950m and would produce a channel to wholesale to all platforms

Mediapro’s bid faces challenging economics given the low potential for an OTT strategy and Sky’s exclusive possession of a sufficiently monetisable subscriber base

Ultimately, we expect Sky to continue its full coverage and to increase its outlay only if it gains more exclusive fixtures

Results of the league’s new call for tender for its 2018-21 broadcasting rights will be unveiled on 22 January. The platform-based packaging was reviewed after last year’s aborted auction, apparently to accommodate loss-making Mediaset Premium, the participation of which remains nevertheless uncertain

Sky could keep its current satellite and internet coverage without increasing its outlay. We expect no major Telecom Italia (TI) or GAFA bid

Serie A seeks an unrealistic €1.05 billion per year (up 24%). If the auction results fall short, it hopes to sell rights to financial investors or, in a last resort, to launch its own channel – both ideas smacking of recklessness

European mobile service revenue growth declined this quarter to 0.3%, likely due in large part to the increased negative impact from the European roaming surcharge cuts, which we estimate at around 0.5-1.0ppts for Europe as a whole

The continued growth was supported by continued ‘more-for-more’ price increases coupled with strong data volume growth. Partially countering this, there has been a step up in competition at the low end in some markets, often driven by the smaller operators

Looking forward, the negative EU roaming impact is likely to decline from next quarter given the end of the summer holiday season, and on balance we would expect positive price increase trends to overcome negative low end competitive trends, at least in the short term. This might change in 2018, as Iliad launches in Italy, and recently consolidated operators become more of a threat

Against the consolidation trend in the European market, France’s Iliad is to launch a fourth mobile network in Italy in the next few weeks, thanks to a roaming and frequency access agreement with Windtre — this deal allowed Wind and Tre to gain regulatory clearance for their merger

The model followed by Iliad’s Free Mobile in France since 2012 cannot be reproduced in Italy, where prices are already low and where it has no established brand reputation. Iliad’s owner Xavier Niel’s experience in oligopolistic Switzerland is of little relevance, and Germany’s Drillisch use of M&A to fill its capacity is not an option in Italy

Nevertheless Iliad has opportunities to seize in Italy where subscriber churn is the highest in Europe, customer service variable, and trust in telecoms brands very low. A credible consumer-friendly value offer could become a real alternative to the three incumbents, although distribution will still be a challenge

21CF’s bid for 100% ownership of Sky has been referred for a Phase 2 investigation to the Competition and Markets Authority (CMA), which will decide by 6 March 2018

Third parties Avaaz and Ed Miliband MP complain of the influence of the Murdoch Family Trust (MFT) and family members over the UK’s news agenda and political process 

A remedy could insulate Sky News from this influence. The offer of a Sky News Editorial Board at Phase 1 was refused. Third parties will ensure the debate in Phase 2 is very lively

The Federal Communications Commission’s Privacy Order (FCC) was overturned by the Senate, clearing the way for ISPs to ramp up consumer data-driven advertising revenue.

While Google and Facebook dominate digital advertising in the US as in other markets, the US is alone in removing regulatory barriers to ISPs taking a piece of the pie.

US ISPs now have a self-regulatory regime for consumer rights on transparency, security and data breaches; but in the UK and EU, privacy advocates prefer enforceable rights.

European mobile service revenue growth witnessed a rare growth spike this quarter, rising to 0.5%, likely due in large part to the reduced impact this quarter from the European roaming cut regulation, but also helped by a slight softening of MTR cuts and continued ‘more-for-more’ price increases

This roaming regulation holiday will end next quarter and the full impact of ‘free roaming’ will be felt, thus the spike in mobile service revenue growth is likely to more-than-reverse

What is likely to prove lasting is the zero-rated data offers introduced in several markets in Q2, which we expect to see more of given their reported success at improving ARPUs

Across Europe, markets are becoming more competitive. Incumbent pay-TV paltforms (e.g. Sky or Canal+) face increasing threats from both internet-based services (e.g. Netflix and Amazon), and telecoms operators

Telecoms providers are proving the most potent challengers as they enter the premium football rights market to create attractive triple and quad play bundles – examples include BT, SFR and Telefónica. The latter is now the main pay-TV operator in Spain whereas France’s Canal+ has entered into a strategic alliance with Orange

Across the top five markets (UK, France, Germany, Spain, and Italy), Sky remains the leading operator with an estimated 21.5m video subscribers, twice as many as Netflix

The US scripted content boom is spilling over into Europe: Free-to-air TV drama ratings have proven resilient but as costs and audience expectations have risen budgets are under pressure, necessitating flexible co-financing arrangements with American broadcasters, and Netflix and Amazon. Pay channels have boosted output—with uneven results

Long-term IP control is a key factor behind independent production consolidation, led by broadcasters seeking a secure stream of content and diversification away from advertising

Notable developments include the new wave of Berlin-based, internationally-financed series, the rise of domestic French content and Sky Italia’s edgy originals, Telefónica’s giant leap into Spanish dramas, and the continuation of Britain as an export powerhouse