BT met its full year guidance for the second year running, but new guidance reflects the weak revenue outlook and limited potential for further cost reduction

Group performance continues to hinge on capex levels, in particular deployment of next generation access, scheduled to continue until 2015

BT is not a financial basket case doomed to be eaten alive by mobile, satellite, cable or internet-based alternatives. But nor does it look like a huge growth story

In the March 2011 quarter Apple’s revenue was up 83% year-on-year and net income up 95%. iPhone sales are up 113% and the iPad has sold 19.5m units in the last 12 months. Even the ‘legacy’ Mac business grew 32%, and Apple now has over $65bn cash in the bank. Not bad for a niche business

With single digit penetration in its core growth businesses, Apple has the opportunity to continue growing fast for some time to come

The threat from Google’s Android is real but limited: we expect Android to take a large part of the mid range phone market but that Apple will retain and extend its competitive advantage for tablets and high end phones

Facebook's audience and consumption growth is now generating substantial and rising display advertising revenue, with consensus estimates of $2 billion in 2010, up 160% YoY, and it will overtake Google on this count this year

The social network's growing position as the centre of the internet experience is enabling it to become a platform for other services, such as e-commerce, making it an increasing strategic threat to Google, as well as other players in the digital media

More importantly, like Google before it, Facebook’s scale and function has the power to disrupt the digital e-commerce and marketing models built over the past decade

CPW Europe had a difficult quarter, with volumes falling 9% and like-for-like revenue 2%, due to continued prepay weakness and the shift to 24 month contracts in the UK

The US business was again very strong, growing volumes at 26%, and this strength is likely to continue due to an acceleration in store roll outs

Keeping the European business flat in 2011/12 will be a challenge, but the US business is likely to more than make up for this at the group level

Sky is managing to sustain strong underlying growth in the face of a challenging retail environment, in which it has maintained strong growth rates in quarterly gross TV additions and home communications products

Revenues were slightly down on the previous quarter, but this was mainly due to the January increase in VAT and seasonal variations in advertising spend, while the results confirmed the company’s strong discretionary control over costs

As the period of peak product additions passes, we can look forward to a strong growth trajectory in operating profits over the next three years

VMed’s Q1 results were respectable, helped by strong revenue growth at Virgin Media Business

However, growth in volume, ARPU and OCF, while still positive, is trending downwards, and we retain our expectation of more limited progress in 2011 compared to 2010

VMed’s strategy is coherent; the issue is the pace at which initiatives such as high speed broadband, service convergence and footprint expansion can be converted into cash flow growth

In Q1, Google’s UK gross revenue increased 13% YoY to £602 million (net of hedging gains), down from the 18% growth in the last quarter and in Q1 2010

Slowing growth appears to be due to the weak state of the UK economy, with consumers and advertisers alike holding back on online spending compared to previous years

We have downgraded our 2011 UK growth forecasts for Google and internet advertising spend to 12% and 9% YOY respectively; while search remains the main market driver, online display is increasingly the key battleground

Market data and industry anecdote point to an explosion in ebook sales in the US and UK in 2011. Leading consumer publishers are seeing ebook sales at 10-15% of total sales in January and February, driven by Christmas device sales

So far ebooks had been strongest in niches: romance, business books and frequent travellers. They have now moved into the mass market: few genres will be untouched

This shift brings with it a very different market structure, with Waterstones likely to shrink dramatically, technology companies with little stake in the health of publishing taking major roles and publishers faced with disintermediation and forced to build direct consumer relationships for the first time in their history

Fujitsu UK’s announcement of plans to provide wholesale fibre-to-the-premise (FTTP) to five million premises potentially poses a significant threat to BT

However, deployment is contingent on the project attracting at least 60% of the available state funding and significant improvement by Openreach of its terms for Physical Infrastructure Access (PIA)

In addition, ISPs using Fujitsu’s network may find it difficult to attract retail market share from BT based on a high speed broadband proposition. However, should Fujitsu deploy at scale, the project could prove positive for Virgin Media

Some of Ofcom’s proposed wholesale charge controls for Openreach fixed access services sound stringent

However, we estimate that the overall financial impact on BT and other players is likely to be very small

We do not expect the proposals to result in changes to many retail prices, but they should tilt the playing field slightly in favour of BT Retail’s competitors, particularly smaller providers of broadband and business services