The UK’s ‘zombie’ economy—largely flat since March 2022—is due to the cost-of-living crisis weighing on households, with this exacerbated in 2023 by the rising cost of credit. Real private expenditure growth will be weakly positive in 2024 before strengthening in 2025 as headwinds recede

Our 2023 forecast of a nominal rise but real decline in display advertising was realised, with TV’s revenues falling while digital display rose. Advertiser spend online is justified by the channel’s size and growth, worth an estimated £406 billion in 2023

For 2024, much lower inflation and mildly positive real private expenditure growth points to 3-4% display advertising growth, with a stronger recovery anticipated in 2025

Service revenue growth was broadly flat this quarter as some unwinding of price increases was compensated by a pickup in roaming revenues.

Vodafone has made some progress on its turnaround plan: it has sold its ailing Spanish unit; is rumoured to be in talks about a deal in Italy; and its German business is (just) back to growth (for now).

We expect muted guidance for 2024 with lower prospective price increases for most, inflated cost bases, and continued consolidation uncertainty.

Unable to match Netflix, financially-pressed Hollywood studios are cutting content output and reassessing the DTC model

Price rises are being forced through, however for challengers this is asking a lot from subs, who don’t see an improvement in product or usage

The corporate landscape is fluid—loss-making DTC platforms and revenue-plunging linear channels are candidates for M&A

Ligue 1 wants to break with its recent history of failed tenders, declining revenues and soured relations with incumbent Canal+.

This year’s would-be bidders have no history of inflating rights costs. Thanks to its distribution deals with DAZN (likely to step in) and beIN, Canal+ may feel secure, while Amazon could let its coverage shrink to a selection of key matches.

The LFP is taking steps to offer a more enticing competition, in partnership with CVC: with fewer teams, a stronger brand and new investors.

Service revenue growth almost doubled this quarter to 2.4% aided by price rises in the UK, Spain, and France, but remains well below inflation-levels.

The revenue boost from in-contract price rises will ultimately disappear as customers recontract, dampening the EBITDA outlook as costs continue to rise.

Operators are looking to other strategies to strengthen their positions, including edging up new-customer pricing, M&A, and attracting wholesale MVNO business.

Vodafone's headline revenue growth of +3.7% is actually a small decline once Rest of World exchange depreciation is accounted for. Europe, however, delivered an improving revenue trend to +0.4%, as signalled at Vodafone's FY results announcement.

The mix and operating trends are less positive, with growth driven by low-margin B2B, and subscriber losses accelerating in German fixed. Investors will be weighing up whether these results are green shoots of a recovery or another false dawn.

Although the company may reach its guided EBITDA on assumed exchange rates, it looks set to fall short in euro terms, which has implications for FCF and dividend cover.

A new era is starting for the big consumer tech companies, as they venture outside of their traditional comfort zones to bet on future growth—most obviously in AI, and then cloud, gaming, headsets and video.

Competition in the tech space is intensifying as incumbents go head-to-head in new revenue growth areas also populated by insurgent startups—their M&A watched closely by competition regulators.

Fat profit margins have ensured vast financial resources are available to pour into competition, but hitting the right targets for consumer engagement is key to success.

Service revenue growth dipped by 0.7ppts to 1.2% this quarter—a slightly disappointing performance given the price rises implemented in some markets.

The impact of price increases has been mixed, with little revenue benefit in France, somewhat better in Spain, and a shift to Iliad in Italy.

Q2 should be stronger, with the UK price rises kicking in, the promise of a turnaround from Vodafone Germany, but a waning of price rise benefits elsewhere.

Vodafone and H3G have finally announced their long-trailed merger plans, with weaker-than-expected financials and the focus squarely on the superiority of a combined network.

We view the hailed synergy estimates of £700m per year as achievable but the merged entity will need to deliver other positive financial filips to get returns above its cost of capital.

The approval case for the merger is that: it makes the operators a stronger competitive force; prices won't rise; a combined network will be superior, and that the status quo is unsustainable in any case.

Piracy of live video feeds—chiefly sports—is growing due to illegal subscription ‘IPTV’ services delivered to TV sets.

Consumers discover illegal feeds through search engines and social media, and subscribe through global payment systems.

Anti-piracy activity is focused on feed disruption. There is little attention paid to credit card and online payment facilitators who need to do more.