In China, Alibaba and Tencent compete for food delivery to expand access to a fast-growing source of mobile user data, using their chat and wallet super apps to funnel customers to their food delivery apps

In the West, the rivalry is direct between the food delivery apps – Just Eat, Uber Eats, and Deliveroo – and the costs of last-mile delivery dissuade challengers

In the UK, Amazon will change the game if it succeeds in its proposed purchase of a minority stake in Deliveroo, which Uber failed to buy last year. Progress on the merger of Amazon and Deliveroo is suspended by the regulator

Market revenue growth bounced back to all of 1% in Q2 after near zero in the previous quarter, with broadband volumes at a near standstill

Operators appear resigned to this however, with new customer pricing appearing to recover, and wholesale price cuts not to be repeated

On the downside, further regulatory and commercial pressure on existing customer pricing is likely, and pricing détentes are often short lived

TalkTalk suffered subscriber losses and falling consumer revenue growth in Q1, with churn still high despite the high speed base growing, countered by ARPU growing for the first time since 2017TalkTalk suffered subscriber losses and falling consumer revenue growth in Q1, with churn still high despite the high speed base growing, countered by ARPU growing for the first time since 2017

The subscriber drop was, however, modest and looks quite deliberate, with there being evidence of price firming in both direct and indirect channels supporting both ARPU and margin

This more cautious approach, if it can be sustained, puts the company on a much more healthy footing in our view, allowing it to achieve its financial targets without increasingly unsustainable existing customer price rises

European mobile service revenue growth slipped again to -2.0%; its worst performance in four years

Regulation limiting intra-EU call prices could hit hard next quarter – with the UK likely to be hardest hit by up to 6% of revenues and 20% of EBITDA

Excluding the EU-call impact, we see greatest scope for improving trends in Italy and France thanks to easier comps and diminishing competitive intensity

The split of UKTV has been announced with the lifestyle channels going to Discovery, while the balance, along with the UKTV brand and VOD service, retained by the BBC, costing BBC Studios £173 million

In the same release, a new, global Discovery SVOD “powered” by BBC natural history and factual programming was announced, backed by a ten-year content partnership

The deal is a positive step for the BBC, which safeguards against flaky brand attribution internationally and the potential loss of revenues from Netflix, which is becoming more choosy when acquiring content

Launched to the world in September 2017, TikTok is the first Chinese app to pose a serious threat to Western social media companies as it attracts hundreds of millions of Generation Z users around the globe

Privately-owned parent company Bytedance earned $7 billion in online advertising revenues in 2018 and is valued at $75 billion, placing it ahead of Uber as the world’s most valuable internet start-up, with an IPO likely this year

Bytedance’s goal of earning half its revenue outside China by 2022 is far from certain. In order to hit the target, TikTok will need to attain super scale with best-in-class revenue per user, an unlikely combination

Across the EU4, pay-TV is proving resilient in the face of fast growing Netflix (with Amazon trailing), confirming the catalysts of cord-cutting in the US are not present on this side of the Atlantic. Domestic SVOD has little traction so far.

France's pay-TV market seems likely to see consolidation. Meanwhile, Germany's OTT sector is ebullient, with incumbents bringing an array of new or enhanced offers to market.

Italy has been left with a sole major pay-TV platform—Sky—following Mediaset's withdrawal, while Spain's providers, by and large, are enjoying continued growth in subscriptions driven by converged bundles and discounts.

Wanadoo's results for the first half of 2002, detailed in the attached note, show that the company is well on track to make its target of positive EBITDA as the loss margin has been cut by half on the Internet side of the business. The targeted revenue increase of 30% also looks plausible as Internet access revenues have done well in France due to migration of the subscriber base to higher priced broadband packages. Wanadoo hopes to have 1 million broadband subscribers by the end of the year, and is counting on the rollout of a new lower speed (128k) and lower-priced broadband package in mid-October. The French Competition Commission has also permitted the company to again market its broadband packs in FT's network of shops, cutting customer acquisition costs. Margins will improve in mid-October due to wholesale broadband price declines mandated by the regulator ART.

We think that the business is worth about €6bn, rather less than the €7-9bn that the investment banks are projecting. The difference arises because we think that they over-estimate the value of Universal’s music publishing business and expect a faster upturn in recorded music sales. But Universal is clearly strongest of the major music companies and we do expect the company’s margins to recover from the low levels seen this year.

This note contains our latest update on Wanadoo, France's leading ISP and broadband service provider, following on from the report we issued in April. Wanadoo's Q1 2002 results are on target with the company's objectives for the year, despite sharp declines in portal and e-commerce revenues. The reason is Freeserve: a better deal from its network provider has raised ARPU to €5.7/month from €3.7/month in Q4 2001, and its PAYG customer base has expanded under continued marketing efforts.

Wanadoo is a business combining extensive interests in European ISPs with a strongly cash-generative directory business. Wanadoo's position as the leading French ISP is secure. Its position as an ISP in other markets is much less happy; in particular, Freeserve in the UK is not performing well. In this report, we address the underlying reasons why the French ISP business is healthy while the low ARPUs and poor or negative access margins in other countries are draining the company's profitability. Section A of the report provides detailed projections of 2002 for Wanadoo ISP operations. We try to show why the unmetered access model for narrowband ISPs is dangerous.

This note inquires into the difficult question of what really drives the capital expenditure of mobile operators. We try to show that since much capital investment is actually replacement of existing assets, the importance of the declining growth rate in call minutes in reducing capex is overstated. Our - very rough - estimate is that a mature European 2G operator will probably have to spend about 15% of sales on capital expenditure for years to come. This is in marked contrast to the more optimistic operators, who have publicly offered targets of below 10%. Similarly, we see little relief from 3G. While it is undoubtedly true that 3G provides more bits per buck, the costs of running a 3G network alongside a 2G infrastructure more than outweigh this advantage. Observers should also note that the capital efficiency benefits of 3G are largely illusory, since the savings in the network are wiped out by the higher handset costs.