The CMA's provisional findings on the Vodafone/Three merger reiterate its concerns around the impact on the retail and wholesale market but its previous issues regarding mobile towers sharing with BT/EE have been satisfied 

Crucially, the CMA seems somewhat dismissive of structural remedies, although hasn't ruled them out entirely. Remedies sought in the form of network and pricing commitments seem somewhat unnecessary, but nonetheless workable 

We now expect the Vodafone Three merger to gain approval in December, with remedy detail negotiated over the coming months—a very significant positive development for the sector 

Service revenue growth dropped off by 2.7ppts this quarter, and into negative territory, as operators in all markets suffered weaker growth
 

Operators in France and the UK implemented price increases this quarter but re-contracting absorbed any positive revenue impact. In Italy, regulatory intervention thwarted operator plans to raise prices
 

Increasing competitive intensity in France and Germany comes at a time when operators can ill-afford ARPU dilution and high churn
 

In the past, broadcast TV and YouTube content has been poles apart—both in substance and the need states they served. This is changing, with the overlap in offerings growing 

We estimate that c.61% of viewing of YouTube Trending content is of videos that could be considered TV-like. Similar programming makes up c.35% of broadcast TV viewing 

YouTube’s videos are also becoming longer, raising audience tolerance and expectations, and allowing the service to compete in a broader range of genres. However, this will be challenged by monetisation limitations

Market revenue growth was just positive at 0.2% in Q2, as lower price increases were mitigated by some temporary ARPU gains.

Growth is likely to drop negative in the rest of year however, with continued weak volume growth compounded by temporary ARPU gains unwinding.

Pricing structures differ quite widely as regards landline offers and out-of-contract pricing, and all could benefit from adopting best practice, a marginal gain worth pursuing in a tough market.
 

Sony PlayStation 5 and Microsoft Xbox unit sales crashed in the last quarter, despite promotional discounting. Neither company appears able to reverse a clear consumer shift away from fixed consoles. 

Nintendo Switch outsold Xbox and nearly matched PlayStation sales, even with the Switch 2 set to launch in 2025. 

A radical change in hardware strategy and leadership will be the best solution for Microsoft to demonstrate a growth narrative following its acquisition of Activision. Gamescom this month may provide more clues.

We forecast broadcaster viewing share to drop to 52% in 2030 (from 58% in 2023), with the firming of its on demand viewing unable to balance out the decline of live: this is a slight improvement on our past estimates, with decline slowing.

SVOD viewing will begin to plateau in 2025, as video sharing platforms (YouTube, TikTok, Twitch) take an increasing share of engagement.

On the TV set, YouTube will grow strongly: we predict a 90% increase from 2023 to 2030. This is from a low base with broadcasters retaining 70% of viewing on the main screen in 2030

VMO2 survived the hammer blow of lower inflation-linked mobile price increases in Q2 with substantially unchanged revenue and EBITDA growth, helped by improving broadband ARPU

However, both mobile contract and broadband subs suffered declines, likely driven by issues with serving existing customers as well as attracting new ones, and these trends have to improve for the company to return to top and bottom line growth

Guidance implies that EBITDA growth will worsen in H2, but this would be good news in our view if it is driven by expenditure to support improved subscriber growth across broadband and mobile 

Meta led the pack of tech results in Q2 with 22% growth and championing a suite of generative AI products; should these falter, Meta can recalibrate by devoting more of its AI infrastructure to core user and ad products. 

AI and the metaverse give Meta an uncertain shot at a new platform play, leveraging its enormous user base and bringing developers back into the fold. 

Reality Labs is still burning cash, but a collaboration with Ray-Ban offers a path to usable head-mounted displays, and could get Meta there faster than Apple’s cutting-edge approach. 

The next generation of the largest and most powerful 'frontier' AI models will be a key test for the pace of AI progress, with OpenAI's upcoming GPT-5 the most highly anticipated.

For OpenAI, the stakes are high, facing a growing assortment of rivals and with huge spend on training and running models to recoup. Staying at the cutting edge is key to justifying itself to the big tech backers on which it depends.

If OpenAI can deliver technology that matches its ambitious vision for what AI can be, it will be transformative for its own prospects, but also the economy more broadly. Falling short could be fatal.

After an arduous ten-month process, France’s Ligue 1 has reached a tentative deal to license its 2024-29 broadcasting rights at a price 14% down on the previous cycle.

Adding France (for €400 million p.a.), DAZN now has prominent positions in four out of the five big European markets. With a weekly top pick (for €100m p.a.), beIN consolidates its model.

Attention turns to distribution, and whether DAZN will patch up its partnership with Canal+.