1. The multi-gig is not embraced en masse
For now, Delta is the champion of the multi-gig offering (8 Gbps). However, the uptake of services above 1 Gbps is quite low, although it can vary greatly regionally. It seems to be more for the business market for now, although something like the metaverse could also drive demand for bandwidth for consumers. We do not expect KPN and Ziggo to feel the pressure to participate in this early phase of a new trend. It is technically difficult: KPN's XGS-PON network is far from national and Docsis 3.1 requires adjustments to go above 1 Gbps. Even the challenger T-Mobile apparently has no plans. It will be after 2023 before we start purchasing the multi-gig on a large scale.
2. Delta Fiber buys Open Dutch Fiber
If investors have to answer the question 'what is a long-term investment', the answer is 'a failed short-term investment'. This also threatens Open Dutch Fiber. It seemed so easy: quickly install fiber optic networks in the major cities, withdraw customers en masse from KPN (and Ziggo) and then put KPN in front of the block to take over the company. It turns out not to be that easy. KPN builds just as quickly and for less than 1,000 euros per line. KPN will reject a takeover for a multiple of this multiple. Furthermore, it relies on its brand name and offerings to win back customers.
Delta Fiber is different in the competition. There is no overlap with Open Dutch Fiber and a merger is obvious with a deal in shares. EQT, Stonepeak, KKR and DTCP share ownership and with certain rights KKR, for example, can be awarded an elegant exit.
3. T-Mobile faces competition on Open Dutch Fiber
Well, this is an open door, but ODF will eagerly await the arrival of multiple ISPs on its network. It is wise if you have strong infrastructure competition, such as Delta Fiber in its home country Zeeland. According to insiders, the deal with T-Mobile is that the latter has exclusive rights as ISP on every network for a year. That period will end first in Zoetermeer. We count on providers such as Online, Youfone, Kliksafe, Freedom Internet and perhaps even Solcon (KPN) to be eager to join from the beginning of 2023.
4. No fourth MNO
New technology can turn an industry upside down. Fiber optic has generated a large number of new entrants, sometimes locally or regionally, and sometimes with a new business model, such as wholesale-only. Unfortunately, the mobile sector is much more locked down. After the last consolidation (T-Mobile bought Tele2 and Simpel) the number of MNOs went back to three and the largest MVNO disappeared.
In other countries, after such a round, there appears to be room for a newcomer and fourth MNO, such as in Italy (Iliad) and Japan (Rakuten), and soon in Germany (1&1 from United Internet), Belgium (Citymesh Mobile from Cegeka and Digi) and the US (Dish). They rely on various things for this: affordable spectrum, access to a wholesale provider of installation points (such as Cellnex in the Netherlands) and relatively cheap cloud technology (such as that of Rakuten, which is also used by e.g. 1&1).
No one in the Netherlands sees this gap in the market.
5. VodafoneZiggo is selling its pylons
Last May, parent company Liberty Global announced that it was considering selling VodafoneZiggo's mobile sites. It has not come to that, but with major investments on the way, it is now more obvious. The debt position cannot go up any further and if the dividend cannot be reduced, then there is only one option: to sell the 'silver'. Half-sister Telenet preceded VodafoneZiggo in this, but interest rates have since risen further. This means that the buyer cannot so easily load the mast company with debt.
Sales could generate at least a billion euros, money that is badly needed for the 5G auction of Q3 2023 and the content ambitions (interest for the Eredivisie).
6. T-Mobile discontinues its television platform
The television market is changing rapidly. With the arrival of SkyShowtime, a provisional endpoint has been reached where a large number of apps (Netflix, Prime Video, Disney+, HBO Max, SkyShowtime, Apple TV+) compete for the favor of the viewer. New hardware (smart TV, casting devices) and software (such as Google TV) reduce linear television to 'just another app', supported by NLziet's stand-alone OTT-TV apps (NPO, RTL, Talpa for EUR 8/month) and Canal Digital (an even wider range for EUR 15/month).
For now, broadband customers usually ask for the double play BB + TV but that is shifting. Cord cutting will continue to increase. This makes it expensive to maintain a television platform. The ISP can simply refer to the mentioned hardware, software and streamers. T-Mobile in particular can show itself to be a forerunner in this. An alternative is the Zattoo platform service.
Maybe 2023 is too soon, but T-Mobile wouldn't be the first to take this step.
7. Stacking increases
The SVOD providers mentioned above almost all have a qualitatively and quantitatively excellent offer. With OTT-TV as 'just another app', cord cutting is increasing and budget is freed up for a new subscription. Unless the economic malaise throws a spanner in the works, there will be room for a new subscription.
8. Viaplay buys the Eredivisie rights
The rights to the Eredivisie will soon be released and will be available for a new period of seven years. The return of Bob Iger as CEO of Walt Disney (parent company of ESPN) suggests that costs are being scrutinized. ESPN Netherlands is probably not a core activity, which increases the chances of the rights being transferred to another party. According to reports, Ziggo is a candidate, but the costs may be too high, reportedly EUR 150 million per season. Then Viaplay is the obvious choice.
9. RTL-Talpa merger called off
Apparently, the authorities (ACM) and the candidates are busy assessing the merger plans of RTL Nederland and Talpa Network. Undoubtedly, concessions play a major role in this, because if France is leading, then the omens are unfavorable.
The big question is whether RTL and Talpa can continue the success of Videoland by working together without a merger. There is still considerable growth, but with the arrival of the major American parties, Videoland's market share is decreasing slightly. If they think they need a full merger for this, then it suggests that they also need the other benefits of the merger in order to survive (they're already losing UEFA rights too): cost benefits from eliminating overlap and revenue benefits from a stronger position vis-à-vis producers and advertisers. However, the latter is a 'no go' for ACM. ACM wants to protect the positions of producers and advertisers.
If RTL and Talpa opt for a limited collaboration in Videoland, the next question is what will happen to NLziet. In France, commercial broadcasters are withdrawing from Salto, comparable to NLziet, now that their merger has been banned. That would mean the end of NLziet. Perhaps that gives the parties extra leverage to push through their merger with ACM: "if we are not allowed to merge, we will stop NLziet".
Originally published here (in Dutch)
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