Headline inflation-busting price increases of 14% mask effective increases averaging a sub-inflation 8%, due to their limited scope across the customer base and over time.

The high headline increases have led to attacks from political and consumer groups, we would argue unfairly, and may yet drive reputational damage.

Looking forward, inflationary increases may be banned, but we would expect higher fixed increases to replace them, and micro-regulating pricing structures does tend to result in unintended consequences.

Microsoft and Google are both incorporating AI-powered chatbots into their core search offering. This will create a better user experience for some search categories earlier in the customer journey.

Search is a huge prize, bigger than TV advertising, and AI represents the biggest potential shakeup to that market since the rise of mobile. With ~95% market share outside China, Google's risk is to the downside.

Search is an early, but not the most natural, home for conversational AI: Microsoft and Google have also announced integrations into productivity software. Expect a wide range of services to be transformed by AI integrations as startups and tech giants alike seek share in newly contestable markets.

Market revenue growth slowed to under 1% in Q4, driven by consumers economising in tough times through re-contracting and dropping add-ons.

Early 2023 is likely to be worse, with growth likely to turn negative again in Q1, again driven by ARPU with volumes more robust.

April price increases will give at least a temporary boost, but need to be managed very sensitively to avoid reputational damage and churn.

VMO2 and CityFibre are reportedly holding merger talks, which would bring together by far the two largest fibre builders competing with Openreach.

On a conventional altnet acquisition assessment, CityFibre is an attractive target given its scale, but a very expensive one at a full price given the degree of overlap.

The acquisition might still be attractive given the opportunity to take out a wholesale competitor but, for this same reason, regulatory clearance would be very tough.

ITV’s external revenues increased 8% in 2022, driven by a big boost from Studios (+19%, £2.01 billion) with COVID overhang now appearing to be a thing of the past. Total advertising revenue (TAR) was down just 1% on last year’s record highs

ITVX had a successful launch, leveraging big audiences for the World Cup to drive awareness and use of the service. We will have to wait and see what effect ITV’s aggressive new content windowing strategy will have on linear viewing

Guidance is that Q1 2023 TAR will be down 11%, with April down between 10% and 15%. TV advertising should recover later in the year, but we are forecasting that the total market will be marginally down

Q4 results were resilient on the top line and stellar at the EBITDA level with mobile compensating for pressures elsewhere, although the company has warned of a tough first quarter 2023 before recovery

Steps are being taken to improve the prospects of the fixed business but they will take time to bear fruit and there may be rocky times in the process, notably the spring price increases this year                                                  

2023 looks set to be a strong year financially, even if some KPIs remain challenging, with the structure of the nexfibre deal flattering the longer-term picture

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.

Although pandemic restrictions are now a distant memory, the aftereffects linger in the retail sector despite the recovery of in-person retail since H2 2021.

Between pre-pandemic 2019 and post-pandemic 2022, volumes are down for fuel and stores selling food, clothing and household goods, exacerbated by inflation, which is also reducing real disposable incomes.

Online sales settled to 26.5% of retail sales in 2022 (excluding fuels), up from 19.2% in 2019. Online volumes remain well above 2019 levels, and long-term prospects are bright with higher road fuel costs and hybrid work-from-home.

Sky is coping reasonably well with the shock of retrenching consumer spending, with revenues almost flat in Q4 2022.

However, profits are under pressure, as the increases in Sky’s costs cannot be fully passed on to customers, and the product mix is rebalanced towards telecoms and variable costs.

Management continues to leverage Sky’s brand strength and its critical mass of consumers to enter new markets, this time with home insurance.

A combination of factors drove the worst quarter ever for big tech growth, though the secular shift online of the economy and society will continue.

Advertising demand is down, reflected in lower prices. Ads did better the closer they are to transactions, with variability by category.

Efficiencies and AI are the investor-soothing buzzwords going into 2023.