Service revenue growth was up just 0.1ppts to 2.0% this quarter, as price rises in the UK and the peak of the roaming boost offset weakness elsewhere.
Price increases to combat inflationary cost pressures are gathering momentum—a potential revenue cushion as roaming tailwinds diminish and challenging economic conditions weigh.
Vodafone is battling strategic issues in most of its main markets—significant change in strategy will be required from the new leadership.
European mobile service revenue growth was positive for the first time in five years this quarter as a resurgent mobility boost combined with the return of roaming revenues.
Q2 is set to be a mixed bag, with inflation-plus price increases expected in the UK, an elevated boost from the roaming recovery, but also some weakness in the B2B market.
We are also seeing the early impact from end-of-contract notification rules, particularly in Germany, and we expect ARPU pressure and churn to pick up elsewhere as the impact becomes more widespread.
European mobile revenue growth was zero for the third successive quarter with better mobility but less roaming upside, some B2B weakness, and stronger competitive intensity in the Italian and Spanish markets
Q1 should evidence some similar trends but the impact of out-of-contract notifications will begin to emerge and roaming looks set to become a significant boost from Q2
Consolidation fever continues to dominate the headlines though this is set against a backdrop of considerable uncertainty regarding regulatory approval
Sky’s performance across 2021 significantly improved, driven in Q4 by a nice c.5% growth rate in UK consumer revenues and the advertising rebound, but effects of the pandemic are still being felt with EBITDA down 30% on 2019.
The decline in Group revenue accelerated in Q4 due to the severe shock to the Italian operation from its loss of most premium football coverage, although we see upsides in a possible rights reshuffle.
In 2022, Sky can leverage growth vectors including bigger content bundles, Glass, advertising innovations and broadband. Consolidating SVOD and telecoms markets may be more favourable to price increases.
Mobile growth improved very marginally to -3.6% this quarter as roaming revenues were harder hit and competitive intensity bounced back, but usage recovered from the lockdowns in Q2 and cuts to intra-EU calls were annualised.
Italy’s fortunes took a turn for the worse as roaming hit particularly hard and Iliad resurged. After a spate of downgrades to the outlook last quarter, there were some tentative upgrades in Q3 although the tone remains cautious.
The diminished drag from roaming is the primary positive driver from here. Although lockdowns of some degree are in place in Q4, their impact will be less severe than those in Q2.
European mobile service revenue growth strengthened very slightly to -0.3% this quarter but, with many positive and negative factors at play, it would be wrong to conclude that we evidenced a convincing improvement in momentum.
Most operators have reiterated their financial guidance in spite of COVID-19 but there is caution from Vodafone and those exposed to sports rights (BT and Telefonica).
The outlook benefits from continued lockdown measures (reducing churn and spin-down) and the annualisation of some financial drags from the middle of next quarter. However, competition in Spain remains intense and the sector is exposed to any economic downturn.
Car transactions are down for the third consecutive year and consumer demand is dramatically shifting (away from diesel and towards alternative fuels), but the marketing expenditure on used cars remains robust overall. Auto Trader has extended its leading position as the largest used car portal, so far shielded from the structural headwinds affecting its core customer group of dealerships. Several disruptors have entered the UK automotive space in the past couple of years, but none have gained real traction in the listings space, instead opting for ancillary approaches. Tech disruption will come, but much longer term.
Expenditure on UK classifieds peaked in 2004, but has since almost halved to £1.95 billion in 2018. In every vertical, the print to digital transition of expenditure has favoured a first mover, leading to dominant positions that challengers find hard to disrupt.
The property market was stagnant in 2019, with stable house price growth but low transaction volumes as Brexit uncertainty held back sales. An expected cut in interest rates this year should contribute to a slight rise in transaction volumes.
The low tide of transactions has cemented the reign of Rightmove and condemned challengers to low traction. No. 2 player, Zoopla, plans for a major drive in 2020 after a 1.5-year investment spree by parent private equity firm Silver Lake Partners.