European mobile revenue growth improved by 0.8ppts in Q3 to reach -0.3%, but all of this improvement and more was due to easing regulatory pressures, with underlying growth actually declining marginally

GDP growth continues to improve year-on-year, but in the current low confidence environment underlying mobile revenue growth is not (yet) responding. Smartphone sales are surging, but their net impact on revenue is hard to discern

Looking forward, the regulatory impact is likely to turn negative again for the next few quarters, so some underlying growth catch-up is required for revenue growth to stay at around zero

We forecast UK online advertising to grow by 8% CAGR to £5.1 billion by 2014, representing approx. 33% of total advertising spend, overtaking press

Search is the main growth engine, which we predict will reach £3.1 billion in 2014, due to its appeal and value to advertisers as a sales and lead generation tool

Growth in spend on social media and video networks will push online display to just over £1 billion by 2014; whilst classifieds will grow to £840 million

H3G Group’s reported results claimed strong growth and rapidly improving profitability, but, taking out the effect of an accounting change, an acquisition and some one off income, underlying revenue was flat and profitability improved only marginally
The parent company is still guiding to positive EBIT from the H3G group for the full 2010 year, but this will require either further creative accounting or very strictly controlled spending on subscriber acquisition, at the expense of future revenue growth
H3G UK’s revenue fell 9% in the half, although profitability improved with very weak contract net adds probably caused by a restricted SAC budget. With demand for smartphones surging H3G UK is in a potentially strong position, but without a substantial marketing and SAC budget it cannot take advantage

H3G Group organic service revenue growth was just 0.2% in Europe in 2009, with EBITDA now roughly breakeven and cashflow remaining firmly stuck in negative territory, and lower subscriber net adds driving most of the EBITDA improvement

H3G UK is outperforming the UK market, but only just, and remains loss-making. Its prospects for 2011 are good, with its network share roll-out likely to have been completed and lower termination rates likely to be implemented, and the Orange/T-Mobile merger could provide significant long term benefits, but it will still require significant investment to gain scale

H3G Australia is now a sound business after the merger with Vodafone Australia, but all of the European businesses are sub-scale, with significant further investment and/or M&A activity required to reach sustainable profitability

On 21st August Hutchison Whampoa reported on the progress of its 3G investments as part of its interim report. This brief note examines this progress compared to our expectations, and reassesses the threat to the GSM operators.

BT and Yahoo! recently announced the launch of BT Yahoo! Broadband for September 2003, a co-branded DSL transport/personalised home page/broadband portal service. The goal is to revitalise BTopenworld, which lost 10 percentage points in DSL market share in H1 2003. The new service will be provided to BTOW subscribers at the same price as the DSL service today, improving BTOW's value-for-money proposition and providing clear proprietary differentiation over other ISPs.

Global Services is the new name for BT's Ignite division. The structure of this important part of BT's business is complex and extremely difficult to understand. BT itself promotes the division as its 'hidden jewel', even though its financial performance in recent years has been little short of catastrophic. Investors rightly remain sceptical.

On June 9th '3' launched 2 new tariffs aggressively targeting the core of the GSM contract base. In this report we look at the potential impact of these on both H3G and the UK GSM operators.

On June 1st BT is launching a radically new pricing structure for its 10m BT Together customers, dropping the distinction between local and long distance calls, and introducing a flat rate 6p for off-peak calls of up to an hour. In this report we look at the impact of these changes on BT, its customers and its competitors.

Perhaps inevitably, ‘3’ opened for business before it was really ready. As a result, its services are patchy and unreliable. Some of these problems will be overcome in the next few weeks. Others will be more intractable. Overall, we can see some potential in 3G style services, but ‘3’ is far from being a competitor to existing 2G offerings.