Market revenue growth turned (slightly) negative in Q1 2023, driven by weak demand and the waning of 2022 price boosts.
Next quarter will benefit from the high 2023 existing customer price increase, but this effect will wane across the year, and go into reverse next year due to lower inflation.
Other factors are mixed, with new-customer pricing tentatively rising, many smaller ISPs struggling, but altnet gains still likely to get worse before they get better.
Vodafone and H3G have finally announced their long-trailed merger plans, with weaker-than-expected financials and the focus squarely on the superiority of a combined network.
We view the hailed synergy estimates of £700m per year as achievable but the merged entity will need to deliver other positive financial filips to get returns above its cost of capital.
The approval case for the merger is that: it makes the operators a stronger competitive force; prices won't rise; a combined network will be superior, and that the status quo is unsustainable in any case.
Piracy of live video feeds—chiefly sports—is growing due to illegal subscription ‘IPTV’ services delivered to TV sets.
Consumers discover illegal feeds through search engines and social media, and subscribe through global payment systems.
Anti-piracy activity is focused on feed disruption. There is little attention paid to credit card and online payment facilitators who need to do more.
On behalf of Lloyds Banking Group, AlixPartners seized the press assets of the Barclay family to recover debts, threatening to sell the Telegraph Media Group and the Spectator in a range of £500 to £600 million.
The least likely scenario is for AlixPartners to select another national news group as the buyer of the Telegraph, due to barriers to clearance from public interest considerations and possibly also at the Competition and Markets Authority (CMA).
If AlixPartners considers that UK trade buyers are unlikely to be considered suitable buyers for the Telegraph, then the range of buyers reduces to non-UK trade buyers or wealthy individuals seeking a trophy asset.
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.
As younger viewers continue to migrate from linear TV to online video-sharing platforms, engaging with the audiences on these platforms is no longer simply an opportunity, but a necessity.
However, this ecosystem offers broadcasters limited monetisation opportunities, reduced audience data and worse attribution than the more lucrative broadcast TV model.
In this fragmented media landscape, broadcasters must maximise their digital reach and exploit incremental revenue opportunities, although linear channels and owned-and-operated platforms will continue to provide the bulk of revenues.
The Italian football league is auctioning its media rights for up to five seasons from 2024/25, with bids due by 14 June.
As in previous cycles, Sky and DAZN will probably bid below the minimum prices, which could trigger further auctions.
Plans for a league DTC service are unrealistic, and free-to-air broadcasts would be uneconomical.
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 Three, covering: public service broadcasting and its path to a digital future. Videos of the presentations will be available on the conference website.
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 Four, covering: news publisher growth, the way forward for UK telecoms, regulation, and closing remarks. Videos of the presentations will be available on the conference website.