At this year’s Mobile World Congress, new hardware was stuck in beta, but glasses-free 3D screens impressed.
The metaverse confronted its identity crisis in a deflated hype cycle: blockchain and NFTs withdrew to the shadows, leaving the focus on enterprise and industrial applications.
AI: while aware of the (numerous) issues, discussions occasionally skated over issues of effectiveness, data inputs, the role of humans, and conditions for adoption.
Providing home broadband connections via a mobile network (FWA) is gaining traction in certain markets where local conditions make it a viable alternative to fibre, such as New Zealand, Italy and the US.
FWA is a time-limited opportunity for most, with mobile traffic growth absorbing capacity for it and fixed traffic growth depleting the economic case. An ultimate shift to fibre is the best exit strategy.
In the UK, H3G's spare capacity could support up to 1 million FWA customers on a ten-year view—enough for a meaningful revenue fillip for H3G, but not enough to seriously disrupt the fixed market.
Microsoft’s planned acquisition of Activision Blizzard is in trouble. US, UK, and European regulators may make the deal impossible for Microsoft—and a disaster for Activision and the wider industry.
Sony’s late improvement in PlayStation 5 sales is only just enough to reach its target numbers for the year. It needs a more dynamic approach to a rapidly changing industry, and a less dogmatic message to consumers and regulators.
Netflix Games is more than a trial—it’s on track to become a major games platform.
European mobile revenue growth was flat again this quarter as a larger boost from annualising the roaming drag was outweighed by B2B weakness, a waning mobility boost and the unwind of pandemic upsides.
Italy saw the biggest improvement in its underlying trend as Iliad struggled to regain momentum, while competitive tension remains elevated in Spain and France.
Q4 looks mixed before 2022 kicks off with some market-specific positives for the UK, but the other European countries will finally face the impact of end-of-contract notifications.
Overall radio listening remains robust and continues to make up the majority of audio time, however a worrying decline in both reach and hours amongst younger people makes further innovation necessary
Shifting audio distribution trends driven by digital and IP listening, as well as the increasing influence of smart speakers and connected devices, represent significant challenges for the radio industry going forward
Strong collaboration and regulatory support will be needed to reconnect with elusive younger listeners, prevent US tech companies from becoming de-facto gatekeepers, and preserve the public value at the core of the UK radio industry
The UK print media sector is facing escalating input cost inflation. Newsprint prices are 50% higher year on year in Q4 2021, noting that prices in 2020 were exceptionally low on soft demand. Based on 2019 rates, prices could be 25% higher in H1 2022. The squeeze on margins for print could destabilise the economics of supply overall.
Newsprint inflation is being caused by soaring costs of recycled feedstock, exacerbated by the monopoly of a single supplying mill in the UK after years of attrition. Imports remain substantial, but impaired by the EU-wide crisis in the supply of paper products, alongside bottlenecks at points of entry to the UK.
Although less significant a factor than paper in the cost of printing the news, electricity cost inflation is another worry for printers, noting that these costs were again also exceptionally low in 2020. Wholesale electricity prices surged by 80% in 2021 (Ofgem), due to pressure on gas supplies from Russia, and the global energy crisis, which will persist into 2022.
European mobile growth was essentially zero year-on-year—a significant improvement thanks to annualisation of the pandemic but there is little evidence of the reversal of its negative impacts.
Italy saw the biggest improvement in its underlying trend as the pandemic continued to suppress Iliad’s momentum, while elevated competitive tension in Spain and France ate into their annualisation boost.
Mobility and flight data suggests that Q3 will evidence a bigger boost from renewed travel than in Q2—positive for roaming revenues—but that the improvement in mobility will be weaker than in the June quarter.
Mobile growth dipped again to -3.3% for what we hope is the final time as widespread lockdowns impacted paid-for usage in most countries.
BT and Vodafone joined the other European MNOs in guiding to improving trends in 2021—expecting EBITDA momentum to be 7-10ppts better—slightly ahead of the 5-7ppts for the European operators.
We may even see positive revenue growth next quarter thanks to the simple annualisation of the first lockdown, with the UK the most to gain and Germany and Italy the least. Investment is creeping up too with higher capex guidance and better 5G momentum.
The press industry lost £1 billion off the topline from the calamitous decline in print revenues due to pandemic-related mobility restrictions, partly offset by gains on digital subscriptions, much harder to precisely size in revenue terms.
Trapped at home for the most part, online traffic to BBC News and news publisher services boomed. Popular news sites marginally grew digital advertising while the quality nationals attracted 800,000 new paying subscribers to reach nearly three million in 2020.
The outlook for 2021, in the transition to the ‘new normal’, is mixed. Consumer work patterns and news, information and entertainment habits are unlikely to ‘bounce back’ to pre-pandemic levels, placing free commuter titles at particular risk. Signs of confidence through online innovation are welcome.
Mobile revenue growth improved slightly to -3% this quarter, primarily thanks to a weakening in the drag from the loss of roaming.
European MNOs are guiding to improving trends in 2021—broadly stable revenues and EBITDA vs declines of 5-7% in 2020. This bodes well for guidance from the UK players around mid-May.
However, the outlook is far from rosy, with Q1 2021 still very challenging ahead of an annualisation of the pandemic drags from the June quarter. Growth prospects remain contingent on the resumption of travel and the economic climate.