BT hit all its targets for the 2022/23 financial year, ending the year with a (predicted) consumer service revenue growth slowdown but a surprisingly strong B2B performance fully compensating.

Investors were disappointed in the outlook for cashflow in 2023/24, with tax benefits being absorbed by the cost of faster-than-expected full fibre adoption, ignoring that this is good news rather than bad.

Next quarter the company will get a substantial boost from the price rises, and in the longer term an even more substantial boost from the completion of the full fibre build is looking increasingly secure.

On 18 May 2023, Enders Analysis co-hosted the annual Media and Telecoms 2023 & Beyond Conference with Deloitte, sponsored by Barclays, Financial Times, and Salesforce

With over 550 attendees and over 40 speakers from the TMT sector, including leading executives, policy leaders, and industry experts, the conference focused on how new technologies, regulation, and infrastructure will impact the future of the industry

This is the edited transcript of Session One, covering: the future of digital experiences, the streaming economy, and harnessing AI for good. Videos of the presentations will be available on the conference website

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.

BT’s revenue and EBITDA growth fell in the December quarter, with consumer broadband in particular suffering from weakening volumes and ARPU, as last year’s price rise benefit wanes and broader macro pressures hit.

Openreach, however, had an improved quarter, with the broadband market returning to growth, full fibre build and take-up progressing at or ahead of expectations, and the altnet threat fairly subdued.

Inflationary price rises in April will give a temporary fillip, and likely help drive a decent 2023/24 for Group financials, but it will take much longer for full fibre benefits to really be felt.