Ofcom will announce at the end of June the new terms for ITV to operate the analogue portion of its broadcast licence for ITV1. According to Ofcom's own statements, it is obliged to estimate the full value of ITV’s operation of the analogue ITV1 service and then extract all this value – bar some profit and other small allowances – in the form of annual licence payments. To do so, Ofcom has announced a methodology based on what the winning broadcaster would bid in a hypothetical competitive tender. In order to estimate the licence payments, analysts must grapple with the highly complex tasks of inferring the model from Ofcom's description and establishing the inputs.

An eventual merger is possible but difficult, especially given Hutchison Whampoa’s inflated view of H3G Italia’s value, considering it worth about the same as Wind itself, which is double the size and actually makes a profit (unlike H3G Italia)

Nonetheless, this does create a possible exit should H3G Italia’s planned Q1 2006 IPO fail, with the consolidation likely to benefit all players in the Italian market. H3G UK does not enjoy such an option, and is struggling more on a stand-alone basis to boot

The UK mobile market can give the unwary observer the impression of strong subscriber growth, dangerously high levels of competition for the incumbents, and high levels of consumer enthusiasm for both advanced handsets and advanced mobile data services. These impressions are however all incorrect or misleading, as our recent UK mobile user survey helps to show.

The success of Freeview has ignited demand from channel operators to jump on board. The lure of Freeview is exemplified by this week's decision of Channel 4 to broadcast E4 free-to-air. The enticement is the advertising promise of such a large potential audience. But, how big an advertising opportunity is it really?

Digital terrestrial TV (DTT) launched in France on 31st March. We expect significant enthusiasm for the wider channel choice available to the 15 million French homes (62%) served only by analogue terrestrial feeds and the roughly 40% of homes that cannot receive a satellite feed. 14 channels were launched on a free-to-air (FTA) basis, and low prices of entry-level STBs have led to brisk sales.

Analogue switch-off is of huge significance to audience share and thus advertising revenue of the existing terrestrial broadcasters (see Analogue Switch-Off [2004-26]). When switch-off occurs, ITV’s audience share will fall, thus affecting revenue from advertising, but its financial impact will be balanced to some extent by an end to ITV’s analogue licence fee payments (see ITV Licence Fees [2004-29]). Where do matters currently stand?

Our first report of 2005 deals with prospects for music download services to the PC and the mobile handset.

Our last report of the year 2004 covers device and network convergence – a recently resurgent growth story for media, telecommunications and consumer electronics companies. But does it represent any more of a reality, threat or opportunity than before?

France's Ligue de football professionnel (LFP) will reveal the outcome of its first assessment of bids for broadcast rights to 380 first division football events and highlights for the seasons 2005-2008 on this coming 10th of December. The 2004 auction picks up the thread of the 2002 auction, 'won' by Canal+ by offering an exclusivity premium, but whose outcome was annulled following a complaint by rival TPS. Broadcast rights, first split between Canal+ and TPS in 1999, have simply been carried over.

TV-over-DSL has been pioneered in the UK by HomeChoice and Kingston Interactive Television (KIT), but their combined customer base is only about 15,000. ISPs and telcos are considering TV as a potential extra application for the local networks they intend to build in urban areas by unbundling local loops. We define TV-over-DSL as the multicast distribution of conventional free-to-air (FTA), subscription and PPV channels over the copper wire to the TV set. Unicast on demand video (VoD) services is the subject of a forthcoming report because its characteristics and market context are entirely different.

The BSkyB change of strategy announced last August by James Murdoch has claimed its first victim according to this report: the company's own original target of 30% operating margin by FY 2006/07. That leaves the company with just two of its core targets: £400 ARPU and 8 million subscribers by the end of 2005. Meanwhile, the profit target has been replaced by the long-term growth target of 10 million Sky Digital subs by 2010, over 25% with Sky+ boxes and more than 30% with multiroom subs.