BT’s acquisition of Premiership Rugby rights underlines its intentions to create a solid premium sports channel with expected launch in summer 2013

BT’s entry into the sports arena is part of a wider TV platform/content strategy that embraces the launch of a much enlarged basic channel offer, integration with YouView and fibre roll-out

Although expected to post significant losses on its sports channels over the next three years, BT’s commitment appears long term

In this presentation we show our analysis of the UK mobile market performance to Q2 2012 and consider the outlook both in terms of market growth and competitive dynamics

Amazon, Nokia and Apple are expected to announce new mobile devices in the next fortnight. We outline the main products and features expected and their implications

A US jury has found Samsung infringed Apple’s patents with Android products and awarded $1bn damages. This is 17% of Samsung’s Q2 operating profit and would be crippling to any other Android OEM: it sends ripples of uncertainty through the ecosystem.

We expect the verdict to accelerate IP licensing between Apple and other Android OEMs, with Apple (like Nokia and other IP holders) levying a fee per device, though Google’s ownership of Motorola may mitigate this somewhat.

However, major changes in the Android proposition are unlikely to be necessary, and as long as the iPhone ASP is $650 and Android is $300 or below, market share is unlikely to shift much. Absent a cheaper iPhone, Android will continue to outsell iPhone 3:1 at much lower prices, especially outside the USA.

BT has announced consumer price rises of around 6% to take effect from 5 January 2013; Virgin Media had raised its prices in April 2012 by around 5%, and we expect the LLU operators to largely follow, at least for line rental

While this was largely expected, given a (self-imposed) price freeze that expires on this date, continued price rationality in the UK broadband and telephony market is reassuring

The timings of the price rises should allow both BT and TTG improve their revenue growth in Q1 2013 after a weak Q4 2012

Around 125m smartphones were sold globally in Q2, up over 30% from Q2 2011. Around 450m mobile handsets were sold in the quarter, giving smartphones a volume share of around 28% Apple and Android dominate with a combined of 85% of units sold, and a cumulative total of 810m devices running their mobile platforms. Of these we estimate that 680m are active, of which 95m are tablets Android arrived later and has grown faster, but Apple’s market share of smartphones as been steady at 20-25% for several years: Android’s growth has come at the expense of Nokia, RIM and feature phones

In this presentation we show our analysis of revenue growth trends for mobile operators in the top five European markets (UK, Germany, France, Italy and Spain). The historical analysis is based on the published results of the operators, although they include our estimates where their data is inconsistent or not complete. A copy of the underlying data in spreadsheet format is available to our subscription clients on request.

In this report we show our analysis of the performance, key trends, competitive dynamics and factors impacting the UK broadband, telephony and pay-TV markets

The first part of the report focusses on market level performance and KPIs such as volume and revenue growth, net adds, pricing and ARPU, and market shares as well as our analysis of key developments in high speed broadband and pay-TV offerings

The second covers the individual results of the four largest ISPs (BT, Virgin Media, BSkyB and TalkTalk Group) in the context of the wider market developments

H3G’s European operations accelerated their underlying service revenue growth to 7.8% in H1 2012, and EBIT margin improved slightly from 3% to 4%, but the growth appeared to be significantly helped by aggressive handset subsidies in Italy, with the company’s unconventional accounting policy disguising the impact on EBIT The UK business continued to perform very well, with contract net additions strong again helped by falling churn, and service revenue growth accelerating from 13% to 14%. H2 will be tougher with more pressure on churn, but we still expect growth to exceed 10% The Italian business significantly slowed its revenue decline, from -14% to -4%, but it appeared to do this through very aggressive contract SACs, and the effects of this on EBIT are likely to be felt over the coming year

Post financial crisis, the dynamics of the UK economy have been reset, as consumers shun credit-fuelled expenditure – the latest GDP data for Q2 2012, confirming the ‘technical’ recession, reinforces our view of an economy moving sideways rather than recovering.

Household consumption in real terms has been in moderate decline since Q4 2010, on real disposable income declines, in turn due to a combination of weak nominal earnings growth due to flat productivity growth, and high inflation.

Although inflation has decelerated markedly in 2012, we continue to expect household consumption to exhibit little meaningful growth for the foreseeable future, which in turn can only be bad news for media and telecoms companies.