The Nordic pay-TV group is under severe financial stress after its stock crashed, dropping its market cap to just over 9% of its 2021 peak value, on top of increasing and unsustainable losses and debt.
Viaplay announced a full U-turn on its previous approach driven by international sports rights and Nordic noir series.
Following the results, Vivendi’s Canal+ bought a 12% stake, eyeing Viaplay's still healthy Nordic business and consolidation in Poland.
Service revenue growth dipped by 0.7ppts to 1.2% this quarter—a slightly disappointing performance given the price rises implemented in some markets.
The impact of price increases has been mixed, with little revenue benefit in France, somewhat better in Spain, and a shift to Iliad in Italy.
Q2 should be stronger, with the UK price rises kicking in, the promise of a turnaround from Vodafone Germany, but a waning of price rise benefits elsewhere.
Mobile service revenue growth slowed again this quarter—now at +3%—as the impact of the 2022 price rises waned further, but a strong B2B performance for some compensated for consumer weakness.
Q2’s boost from bumper price rises will unwind over the following quarters as customers re-contract and face much lower increases next spring due to the inflation outlook.
Given the temporary nature of in-contract price rises, and the more permanent nature of elevated cost bases, new-customer pricing now appears to be edging upwards, and the case for consolidation is strengthened.
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Climate change is again a core theme of this year’s Media and Telecoms 2023 & Beyond Conference, as it has been since 2021 when the UK hosted COP26.
Published in March 2023, the IPCC's Sixth Assessment Report points to alarming warming trends due to rising greenhouse gas (GHG) emissions. Echoing the messaging of COP26 and COP27, the IPCC implores signatories: “Emissions should be decreasing by now and will need to be cut by almost half by 2030, if warming is to be limited to 1.5°C.” With many governments stymied by short-term political exigencies, it is businesses and people that must harbour the ambition for net zero that our planet requires.
This year’s report highlights the climate change initiatives of TMT companies to decarbonise operations, and their society-leading role towards the environment. Media businesses are mobilising their touchpoints with their audiences—from news, to magazines, to audio-visual productions such as films, TV programmes, games and advertising—to inform and win over hearts and minds in favour of climate action. Case studies of the Guardian, WPP, Ad Net Zero, Bertelsmann, Vivendi, Sky, BT Group, and Virgin Media O2 provide best practice learnings.
VMO2 had a subdued Q1, with EBITDA growth only just positive—this was pre-warned due to tougher comparables and the mid-teens price rise not due to take effect until April/May.
KPIs were mixed: fixed was fairly strong and mobile was slightly weak, with there being realistic hope that the former is a trend and the latter a blip, although more work is required to fully turn around fixed.
Guidance for mid-single-digit EBITDA growth for 2023 has been maintained. This now excludes the nexfibre construction margin benefit, thus is in a sense an upgrade, and still looks eminently achievable.
Service revenue growth was flat at 1.9% this quarter—a reasonable performance considering waning boosts from roaming and UK price rises, and a challenging macroeconomic backdrop.
Looking ahead, operators in most markets are now implementing price rises, providing a welcome (albeit transitory) tailwind to revenue growth—although EBITDA momentum remains subdued.
We expect a consolidation deal to be announced between Vodafone UK and H3G in the coming weeks and a decision from the EC on the Orange/MásMóvil deal in August—crucial issues for the sector’s prospects.
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.
Telcos are pressing the EU to force big tech to make a ‘fair contribution’ to their network costs, although this has drawn opposition from telecoms regulators, who rightly fear risks to the wider ecosystem
There are valid concerns to address however, with content providers not currently incentivised to deliver traffic efficiently, and telcos constrained by net neutrality rules from doing anything about it, resulting in unnecessary costs and service degradation
However, there may be better ways to address these, through reforming the implementation of existing rules to encourage more efficient content delivery, and allowing the telcos to provide enhanced delivery routes of their own, with Ofcom’s approach in the UK a step in this direction, but perhaps not a step far enough
The post-pandemic recovery has lifted vacancies to a high of 1.27 million, at critical levels in hospitality and health—sectors impacted by the exodus of EU workers. We expect recruitment advertising for private sector roles to have risen 13% in 2022 to £746 million (noting base effects from lockdown in H1 2021), and will decline c.4% in 2023.
LinkedIn dominates recruitment advertising directed at professionals, leveraging its free global networking service. Indeed anchors the other end of the skills spectrum, which is low value and high volume, aggregating openings to create a scale proposition for jobseekers, using technology to target and match them with employers.
Specialists are surviving Indeed’s technology-driven business model by relying on human expertise and ancillary HR services to differentiate. Agencies continue to specialise in supplying workers to large employers for temporary positions. News publishers have retained a small but dwindling slice of recruitment advertising.