Broadband market volume growth resumed its downward trend in the September quarter after a blip in the previous quarter that was likely caused by a wholesale transfer distorting the figures. Revenue growth, however, perked up to 1.9% from 1.7% in the previous quarter, an encouraging recovery especially given that it was not primarily driven by the timing of a price increase

ARPU growth improved across all four of the major operators, countering recent trends, with a focus on higher value offerings a common theme. High speed broadband adoption accelerated in the quarter across most operators, encouraged by Openreach’s volume discount offer, although this was partially driven by keener high speed pricing

Revenue growth at Virgin Media, Sky and TalkTalk converged at around 3%, with BT Consumer lagging at -1%. However, excluding the effect of BT’s shrinking telephony-only base and smoothing the sporadic boost of its 9-monthly price rise, BT Consumer’s revenue is in the middle of the pack at 3.0% 

European mobile service revenue growth slipped again this quarter to -1.0% as the UK and Germany disappointed and the Southern European countries worsened. The gap in service revenue growth rates between the Southern European countries and the UK and Germany increased again to a spectacular 5.5ppts

Spain was perhaps the biggest surprise this quarter with service revenue growth deteriorating by more than 3ppts; primarily due to Vodafone who posted a dire performance on all fronts

Next quarter, a somewhat delayed improvement in trend from the annualisation of roaming tariff cuts in the UK and Germany is possible, competitive intensity in France looks set to intensify as Iliad renews its aggression in the face of slowing momentum. Although there may be some reprieve on the rate of subscriber loss in Italy, Iliad is likely to continue to impose significant ARPU pressure on all operators

New car registrations will be down 6.3% (2.4m) in 2018, another year of decline from the 2016 peak of 2.7m, impacted by the soft consumer confidence in big-ticket purchases, with some spin down to used car sales

Auto Trader, despite the car industry’s downturn, has experienced only marginal pain thanks to the strategic focus on revenue diversification – principally into new cars, dealer auctions and enhanced subscription-based services for dealers

Our forecasts for media expenditure on cars in 2018 and 2019 are essentially flat. Auto Trader’s positioning offers insulation in a downturn, and we expect they will gain share in marketing spend, though not necessarily in terms of total consumer or industry expenditure

The UK’s labour market is tight, with an unemployment rate of 4.1%, the lowest since 1973. Peak vacancies and reports of skill shortages mask dull hiring plans amidst the gathering Brexit gloom, which will hit temporary hiring hard. We expect media expenditure to fall in 2018, substantially more among print publishers, spilling over into 2019 expenditure on media

The recruitment industry has benefited from the structural shift to outsourcing, and large agencies are portals in their own right, providing tools to companies to sift applicants to find the best match. Companies doing their own recruitment of professionals value listing on LinkedIn, the top UK site by visitors, and the efficiency of paying per applicant rather than for the listing

Second-placed Indeed has gained considerable momentum since being acquired by Japan’s Recruit Holdings in 2012. Indeed acquired third-placed Glassdoor in 2018, the latter having built its market position through user-generated reviews of employers. With Google serious again about Jobs, a sector (among others) it has tried to disrupt before, Monster and Jobsite are the more vulnerable to being crowded out 

The UK consumer’s loss of confidence since the June 2016 referendum vote in favour of Brexit has reduced the revenues of both estate agents and auto dealers, with knock-on effects on their media spend, entrenching further the leadership positions of Rightmove and Auto Trader respectively. Only the UK’s recruitment marketplace is buoyant with a record level of vacancies, benefiting general recruitment aggregator Indeed, although deepening Brexit gloom among businesses will rapidly melt away vacancies

With internet users flocking to portals and away from print media, advertisers have followed suit with media spend on these portals to stimulate purchaser interest, although transactions are still conducted offline. Facebook and Google, which have long histories of contesting markets for local advertisers with little success, have re-entered classifieds. Facebook Marketplace is now accepting listings from estate agents and dealers, expanding from C2C to B2C in homes and cars. Google Jobs launched in the UK in July 2018 and enjoys partnerships with all the major portals other than Indeed

The sharp decline in sales and shift to lettings, sluggish price growth and pressure on estate agents’ commissions, are making marketing key to driving transactional activity in a longer sales funnel. Rightmove’s revenues are on track for a 10% increase in 2018 on the uplift in average revenue per agent (ARPA). Zoopla's market share rose with the end of OnTheMarket's 'one-other-portal' rule for shareholders upon its AIM listing in February 2018 

Despite the consumer's confidence having been shaken since the referendum vote for Brexit in June 2016, monthly retail sales, especially online, managed to grow above the private consumption trend until this October, a turning point that could mark the start of a retail recession extending into 2019.

Since mid-2016, TV advertising and retailing have lost their historical covariance, with TV advertising's recession briefly interrupted in the first half of the year due to sunny weather and the FIFA World Cup. After a flat Q3, we predict a resumption of TV advertising's decline, expected to be down 3-4% in Q4 2018 year-on-year.

2018 will be flat for total TV advertising, still better than 2017. However, the medium's weakness will persist in the first half of 2019, with hopes for a recovery only in the second half, assuming an orderly withdrawal from the EU starts in March 2019.

TalkTalk had very solid Q2 and H1 results, with broadband net adds staying positive, high speed net adds accelerating, revenue growth above 3% and EBITDA rebounding back to growth

This was helped at the revenue line by a price increase in the quarter and in EBITDA terms by steep Openreach price reductions, with strong revenue growth and any EBITDA growth hard to replicate once these effects have annualised out

The company has nonetheless stabilised its subscriber base, revenue and profitability after some erratic years, with cost-cutting providing some potential for growth going forward

Vodafone’s deteriorating financial performance is as much due to an increasing margin of underperformance relative to its peers as to challenging markets such as Italy

A strategic refocus on operational performance is long overdue and seems largely sensible, save for the continued push for discount-led convergence products which are driving underperformance

Although Vodafone posted 3% organic EBITDA growth for H1 of this year and is guiding to same for the full year, we view this definition as overly flattering with true EBITDA performance flat and revenues in decline

Virgin Media’s revenue growth accelerated in Q3, off the back of improved subscriber ARPU and triple play growth, but actual customer and broadband figures slowed in line with the weakening market

Network roll-out was still (deliberately) slow, with the rate now well below the previous year, and the company indicating that it is not expecting to accelerate, although it is still the fastest new network builder in the UK by some margin

Both the ARPU focus and slow roll-out point to a cautious approach, with the company happier to ensure its existing customers offer good yields than to seek significant market share growth at this stage, which is probably wise

BT’s Q2 results were well ahead of both its full year guidance run-rate and financial market expectations, with revenue flat and EBITDA up 3% versus guidance and consensus at -2% for both metrics 

Operating metrics were more mixed, with broadband churn high and (our estimate of) net adds low, but fixed ARPU was solid, backed up by rapid adoption of BT Plus, fibre adoption re-accelerated and mobile was strong across all metrics

While part of the outperformance was likely due to H1/H2 phasing, it also reflects fairly conservative expectations and a solid operating performance, and hence full year guidance still looks very beatable, with a positive outlook beyond this