UK mobile revenue growth was steady in Q4 at -3.9%, only a fractional drop from -3.8% in the previous quarter, with underlying growth unchanged, and contract subscriber growth and ARPU trends also unwavering, though the market solidity masked more dramatic developments in service offerings with the launch of the new EE umbrella brand and its 4G service

With the 4G spectrum auction now concluded, we can expect Vodafone and O2 to launch 4G services in the summer and H3G in the autumn; EE is looking to stay one step ahead with its recently announced speed doubling, and the intensity of marketing around 4G may even help its own service

While 4G will provide the talking points, actual financial results in 2013 will depend more on 3G base level pricing remaining firm; the signs so far are positive, with O2 having nudged up its core pricing, and mid-contract price increases scheduled by O2 and EE

Sky Deutschland is reaping the benefits of its re-launch using BSkyB’s model, with an improving content offering and quality of user experience, plus a favourable environment for household consumption in Germany.

2012 results came in very close to our forecasts and we predict that Sky Deutschland will break even at EBITDA level in 2013 and turn cash flow positive in 2015.

The competitive context is benign and the horizon is clear until the next Bundesliga auction in 2016. But, in the meantime, cable, IPTV, FTA and OTT players are committed to widening their pay offers, which may put pressure on Sky’s subscriber growth and content costs.

The UK 4G spectrum auction raised a total of £2.3bn, broadly in line with similar auctions, although the highest quality spectrum raised less and the lowest quality spectrum raised more than might have been expected

The main short term consequences are as was expected beforehand; Vodafone and O2 will launch 4G services around May/June 2013 and H3G will launch in October 2013

Longer term, O2 and H3G may suffer from their lack of 2.6GHz spectrum, although with other bands likely to come free within the next ten years this may not affect them

H3G’s X-Series is not quite as innovative as it was presented to be, given that T-Mobile’s Web ‘n’ Walk is very similar in concept (flat rate data tariffs, 3rd party Internet services) and has been available since June 2005

H3G has extended its deadline for hitting EBITDA breakeven, with this now around 12 months later than its previous forecast, we believe due to management failing to understand the extent of its churn problem 

The Zune Marketplace is no match for the iTunes Store, with a smaller repertory of music and no video to supply the Zune, since Microsoft has announced it will soon sell video for the top-end Xbox 360, around which its ‘home-entertainment’ strategy is based

We figure the costs of switching to the Zune are low, but Microsoft will be lucky to sell 1 million Zunes in the Christmas quarter – if it does, revenue will rise by less than 1%, so the Zune is of limited interest, whether successful or not

H3G’s 2005 results underperformed in 3 key areas: net subscriber additions were lower than promised, unit SACs were higher than promised and the group failed to reach EBITDA breakeven as promised 

2006 promises to be much worse due to a markedly bigger drop of about 11.5% in weighted share of commercial impacts in 2005, due to a number of factors (not just multichannel platform growth), and an anticipated decline of between 2% and 5% in total TV NAR in 2006. Taking a mid-value of -3.5% yields a drop in ITV plc NAR of around £180 million in 2006 

H3G’s new UK prepay tariff ‘WePay’, launched this week, offers the appealing gimmick of paying customers to receive phone calls. Less appealing is the 32% outbound calling price rise accompanying this change, and the estimated net impact of a 10-20% price rise.

However, we do not share NTL management’s optimism concerning the power of the ‘quadruple play’ – to date triple play has proved attractive to less than one third of cable households