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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

UK mobile service revenue growth improved in Q3 to -0.8% from -1.7% in the previous quarter, a welcome turnaround after three quarters of declining growth. Pricing remains firm, data volume growth remains robust, and some of the one-off factors affecting the previous quarter have dropped out

Sky Mobile soft-launched at the end of 2016, and it is taking an aggressive approach with a very deep MVNO technical model with substantial fixed costs, a high advertising budget and ambitious internal subscriber targets. To date the fixed MVNOs have not had a substantial impact on the MNOs, targeting a customer base that is non-core, but with SIM-only on the rise this may change

Looking at recently released network performance statistics, the impact of spectrum disparities is clear, with EE both able to offer faster speeds nationwide due to its large blocks of 4G spectrum, and offer much faster speeds in London. EE also has a lead in geographic coverage, and is planning to push its coverage much further, creating a challenge for the other operators to keep up

As smartphone ownership nears saturation in almost all consumer groups, the base for the UK digital economy is widening: media consumption continues to move to connected devices and use of consumer services on mobile grows

Ecommerce is now responsible for 75% of retail growth, steady even during periods of decline for the overall market

Google and Facebook take up almost 90% of gross online advertising growth this year, and the ecommerce and mobile service markets show early signs of platform concentration

Pay access now predominates in print-rooted national digital news across Europe, with meters the most popular model. Reliance on digital advertising is retreating. Best of class Continental publishers have roughly stabilised revenue, and the risk of print ad decline acceleration looms – as in the UK

Digital is still typically below 20% of revenue as online advertising CPMs decrease and newsstand buyers are reluctant to migrate to digital subscriptions – on current trends digital revenues will be insufficient to sustain a full-scale newsroom

Emerging innovations include aggregation, bundling (with broadcast, music, telecoms), and youth-skewed spin offs, but execution is uneven. Profitable native digital news sites provide templates for focused coverage at a fraction of traditional newspapers’ costs

This is the second of three reports in our annual review of vertical marketplaces (classifieds), focused on property, and follows Vertical marketplaces overview and recruitment classified outlook [2016-116]

Stamp duty reforms and the impact of the Brexit referendum triggered a -10% fall in UK residential property sales between April and October 2016 and the consensus among estate agents and commentators is that the property slowdown will continue into 2016/17 as buyer confidence recedes. As a result, we expect UK property classified advertising to slip into decline in 2016/17 driven by losses in print, while online advertising growth will slow to low single digits

In the online market, while Rightmove continues to deliver outstanding financial results from its simple listings model, we believe that a new phase of innovation is imminent. Consumers are demanding enhanced services through data and personalisation, and there is clear potential for virtual/augmented reality and artificial intelligence to disrupt the market in the longer term

UK digital advertising has enjoyed strong growth in 2016, with forecast growth of 12.7% for the full year, just scraping under the £10 billion milestone

However, this growth is highly uneven, being led by mobile display and mobile search, while desktop spend looks set to decline by over 5% year-on-year. More significantly, 90% of the growth is accruing to the two big players: Facebook and Google

Cross-device campaigns, the convergence of marketing and advertising functions, and new consumption trends all threaten our traditional categorisations of online ad spend

France’s number two telecoms operator has suffered extensive damage since the 2014 takeover by Altice, which engaged in a slash-and-burn leveraged buy-out. Market share loss has triggered a revenue decline, with uncertainty of when this might stabilise

Increased investments will barely allow SFR to stand still in the competitive race for 4G and fibre deployment. Cash flow, while in decline, is sufficient to meet high debt payments – but rising bond yields could pressure P&L

SFR aims to appeal to subscribers through enlarged bundles of content sourced mainly from Altice investments in media, but execution seems geared to achieve VAT optimisation and augment the group’s political influence – which may be needed as massive job cuts are planned

Vodafone Europe has improved its mobile service revenue growth to near zero (-0.2%), and narrowed its revenue growth gap to competitors to a mere slither (0.2ppts), allowing it to return to significant EBITDA growth (3.1%)

The primary driver for this was however ‘more-for-more’ price increases, which have been followed by competitors only in part, and it is still losing contract subscriber share across its major markets (with significant local variation)

Its overall network performance statistics are flat, and customer NPS statistics are improving in some markets and worsening in others. Future outperformance is possible, but by no means guaranteed, and we believe that stabilising market share should be more of a priority than price rises

Snap’s IPO is reportedly pressing ahead as expected, suggesting a remarkably early maturity for the company’s advertising business model

Snapchat creatively adapts the tried and true TV advertising formula, focusing on content, context and audience affinity – this goes against the grain of digital advertising and could unlock new brand budgets for online

After an IPO, Snap’s founders would have the freedom to expand their platform with new content, distribution channels and even devices

US entertainment groups have not been disrupted by the rise of digital media. Long running franchises drive growth across diverse sectors, starting with pay-TV and SVOD. US television advertising is rising in line with GDP, while the online video ad market is flourishing, with much appearing alongside the majors' scripted content

Studios' cable channels are their most profitable assets, but M&As with distribution platforms, including Comcast's aquisition of NBC Universal, have usually failed to deliver synergies

The Donald Trump presidency could leverage hostile public opinion towards mergers to undermine the AT&T bid for Time Warner; but it could also stimulate M&As if it granted tech companies a tax break to repatriate profits. A more protectionist administration could also bring about a less benevolent attitude towards majors' foreign operations