Despite the recession, in 2009 the French broadband market added 1.8 million connections to reach 19.6 million, but we expect the deceleration in growth to persist in 2010

Orange’s leading position weakened further in Q4 2009, despite retail price cuts, and we expect a further decline in market share in 2010, impacting FT’s top-line

SFR was the star performer of 2009, although its Ebitda margin has improved slightly. Iliad remains the ‘best in class’ in terms of profitability, but must address high churn at Alice. Bouygues’ fixed line début was an impressive splash – at a cost

Mobile content is moving to the centre of strategies for online
media. At MWC, the world’s biggest mobile conference, Google announced it now develops
all products ‘mobile first’ and Facebook reported a quarter of its 400m users access
the service through mobile

Three years after the iPhone 
launched, the handset industry is catching up, adding decent user interfaces
and mobile apps to colour touch screens and taking easy access to mobile content
beyond the iPhone

Beyond the self-selecting early adopter iPhone base, we found
real evidence of companies already successfully providing mobile content to much
wider segments of the population

ITV survived the worst recession and advertising downturn in its history thanks to market outperformance, cost cutting and other measures that delivered a full year profit of £25 million despite a 7% decline in total revenues, largely the result of a £134 million drop in its core advertising revenues

With the worst of the recession past, the focus of the incoming management is on revival and sustainable earnings growth through a transformation that will make ITV increasingly less reliant on at best stable broadcast advertising revenues in the digital age

Announcement of the transformation strategy awaits the conclusion of the ongoing internal review. We are slightly more optimistic about the TV advertising outlook over the next five years and see some upside potential from possible changes in the airtime rules, whilst the key to revival rests with the future coordination of ITV’s content and multichannel interests

The IFNC process remains on track, but the pilot contracts may not be signed off this side of the general election – if Labour wins the election, this will not be material to the pilots or the wider IFNC project in the Digital Economy Bill

Given their opposition to IFNCs, we expect a win for the Conservatives would halt the pilot negotiations – as well as the wider IFNC project

The Conservative plan appears to be the creation of a network of local media companies. We are sceptical that such LMCs would be commercially viable

The internet continues to gain share of media consumption and advertising at the expense of traditional media in the UK. This report highlights key online trends in the UK and our current forecasts for internet advertising in 2010 (we will address mobile advertising separately)

Apple’s hardware-driven strategy for music recently passed two major milestones, with 10 billion paid track downloads and 250 million iPods sold

In 2009, Apple ‘returned’ to record labels and publishers roughly $1.9 billion, while generating gross profits in the region of $3.2 billion from the sale of iPods and music

Of wider significance to Apple is the music strategy’s contribution to building a mass market brand and expanding its customer base, helping to drive adoption of their computers and, more recently, the iPhone

VMed’s Q4 results were again strong; the May 2009 price increases continued to lift revenue and operating cash flow, as expected

There are continuing grounds for optimism, including further price hikes, cost reduction and modest turnarounds at Mobile and Business

There was no news regarding content M&A, but a sale some time this year appears likely and should have a significant positive impact on the company’s financial position

The switchover to digital television is well advanced in Europe – it is already completed in The Netherlands, Sweden and Germany (but not on cable) and will be over in all other large markets by 2012

This report presents a cross-country comparative assessment of TV platforms switching over and the emergence and adoption of new digital platforms, such as DTT, IPTV and free digital satellite

BT’s Q3 results and improved guidance for the year to March 2010 showed the current turnaround is well on track. But revenue continued to decline and improvements were concentrated at Global Services, the results for which were flattered by the dire prior year comparable

The UK business’s long term prospects also depend on successful deployment of next generation access, but this is over two years away

The results were overshadowed by the Pensions Regulator initially expressing ‘substantial concern’ over some features of the pension deficit valuation and recovery plan that the company has agreed with the trustees. Clarity on this is also some way off

Trinity Mirror (TM) has acquired Guardian Media Group’s (GMG) regional media business for £7.4 million cash, also releasing GMG from a £37.4 million liability print contract

The deal is the first significant consolidation play since the cyclical downturn that started in 2008 helped reduce local newspaper advertising by about 35% or £1 billion. TM is understood to have beaten private equity to the deal, signalling that consolidation activity in local media may be starting to warm up

While the price tag appears small for a business that generated £94.5 million in FY 2009, its operating profit had fallen to £0.5 million, and TM should be able to realise measurable local synergies and cost savings