European mobile revenues remain decidedly in decline this quarter at -2% – a slight worsening since Q2 as the full force of cuts to intra-EU calls hits 

There are signs that dual-brand strategies may be reaching their useful limit as erstwhile premium customers shift to value

There is scope for some trends to slowly improve from here, although end-of-contract notifications will impact all markets before the end of 2020, with the UK first off the blocks in Q1
 

With pay-TV competition faltering, UEFA is aiming to stimulate demand for 2021-24 TV rights with early auctions, a possible relaunch of FTA broadcasts, and even, unrealistically, by considering an online service of its own

In the recently completed UK auction, facing no major threat from Sky, BT kept the rights at an almost flat price – probably missing a cost saving opportunity

In the upcoming auctions on the Continent, with former buyers such as SFR, Mediaset and Vodafone having cut back on premium sports, the major platforms’ bids will probably be unchallenged

European mobile revenue trends are not yet improving. Italy is still flat-lining at almost -10%, Spain worsened again, and the UK deteriorated sharply. France is the only good news story

5G rollouts seem somewhat tentative. Indications from the UK that it is leading to a more competitive environment may discourage European operators from exacerbating already challenging markets

Prior year comparables for Southern Europe will be more flattering in the second half of this year although a doubling in the drag from intra EU calls will dampen any recovery

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.

In 2014 Canal+’s core premium French pay-TV business has continued to lose subscribers and swallowed a VAT increase. But this was offset by growth in FTA ad sales, in ARPU, in overseas subscriptions and by acquisitions. EBITDA has continued the decline which commenced in 2013

Eleven years ago Canal+ in France and Sky in Britain had the same household penetration, but since then a gap has opened up and now Canal+ lags behind at 21% compared to Sky’s 34%. The French platform suffers from its regulated focus on films and its neglect of hardware

A deep revision of Canal+’s model is needed, through building a library of scripted series and a revamp of the consumer proposition to differentiate on quality and user experience. Building on recent initiatives, mediocre IPTV services should be bypassed by OTT bundles on fibre, and the satellite offering upgraded

European mobile service revenue growth improved by 0.5ppts to -7.2% in Q2 2014, but all of this and more was driven by a reduced regulatory impact; underlying growth has been stuck at around 6% for the last four quarters, with progress in some areas consistently being countered by further pricing pressure

Industry consolidation has progressed to some extent, but would have had little impact in the quarter. Further in-country mobile/mobile mergers are more than likely but uncertainty driven by the changing European Commission may be delaying decisions to move forward

The UK example shows that consolidation is not necessary for market repair, but in the present environment the smaller operators in continental Europe have every incentive to be as disruptive as possible to encourage their acquisition, so further mergers cannot come soon enough

As we expected, Canal+ won the broadcast rights to the Ligue 1 top three weekly games in 2016-20 and beIN Sports have the seven remaining fixtures Sensibly, the two competitors avoided a bidding war but ended up paying 28% more than the 2012-16 agreement – the first substantial increase since 2005 The new contract will help Canal+ sustain pricing and marketing. Meanwhile, even if it completely lost the ongoing Champions’ League auction, Canal+’s football prominence would remain

European mobile service revenue growth again disappointed in Q4, dropping slightly from -8.9% to -9.1%, with underlying revenue growth dropping a little further from -6.0% to -6.3%, again reaching a record low

There had been hopes that improved GDP growth would drive a volume rebound, that price declines would start to annualise out, and that declining out-of-bundle usage would wane in its impact as this usage declined. In the event, ongoing price competition from smaller operators, MVNOs and quad play offerings, combined with surging use of OTT communications platforms, have dominated trends

In the medium term, the development of 4G and Vodafone’s Project Spring may bring some much needed network differentiation back to the market, allowing pricing power to return to the larger operators. However, it will be 2015-2016 before these factors come into play: in the short term, the main source of optimism is consolidation

The French Professional Football League (LFP) is to auction its 2016-20 broadcasting rights next month, one year earlier than expected. The anticipated auction (and short notice) increases pressure on rival LFP broadcasters – a failure to renew their existing rights deals would unsettle their position for over two years

Due to uncertainty over the future ownership of Canal+ and the political background of Al Jazeera’s beIN Sports we believe that both would prefer to maintain the status quo: the top two weekly games on Canal+ and the other eight on beIN Sports

The LFP rights are precisely packaged to prevent this, and to force the two to compete at least for one lot. As the market leader Canal+ has more to lose, while beIN Sports could sustain its current complementary positioning with fewer games