Thursday, October 31, 2019

HBO Max: all the specs

Launch date:
  • May 2020
Content:
  • focus on 3 areas
    • kids/family
    • millennials/Gen-Z
    • adults (focus on women)
  • new series rolled out one episode at a time
  • total 10k hr at launch o/w 1800 films, incl
    • originals (31 series in 2020, 50 in 2021)
    • library content from Warner Bros, New Line, DC, CNN, TNT, TBS, truTV, Turner Classic Movies, Cartoon Network, Adult Swim, Crunchyroll, Rooster Teeth, Looney Tunes etc
    • 3rd-party licensed content
  • to add live special events
Pricing:
  • 15 $/mo
  • free for 10m existing AT&T HBO subs & HBO Now direct-billed subs
  • plans new bundles with free HBO Max for premium video, mobile, BB subs (total 170m D2C relationships, 5500 retail stores)
  • to add AVOD tier within 1 yr (with added content)
Tools:
  • personalised profiles & homepages
  • curated recommendations
  • co-viewing (shared homepages separate from personal homepages)
  • parental PINs
  • downloads for offline viewing
Targets:
  • 75-90m subs in Americas & Europe YE 2025 o/w 50m in US
  • incremental investment $1.5-2.0b in 2020 (for new content, foregone licensing revenue of own content, operating expense for the technology platform, marketing)

Monday, May 13, 2019

Google I/O 2019: highlights

General
  • Focus on privacy.
AI
  • Launches AI Impact Challenge ($25M)
  • Demos Project Euphonia (understand the speech-impaired)
  • Improves Google Assistant (10x faster, to be added to Waze)
  • Expands Duplex to web (assistant for making restaurant or hairdresser reservations)
  • Improves Lens & adds to Google Maps
Android
  • Passes 2.5b active devices
  • Launches Android Q (beta #3; incl Project Mainline: deliver important code changes to specific internal OS components directly from Google Play)
  • Plans parental controls
  • Adds Live Caption for real-time subtitles
  • Works with Qualcomm on API improvement for 5G

Android TV
  • Enables one-click subscribing
  • Reaches 140 pay-TV operator integrations, 60% of smart TV manufacturers uses Android TV, total 1k content providers & 5k apps.
Devices
  • Launches Pixel 3a (5.6 inch, $400) & 3a XL (6 inch, $480), Nest Hub Max (10 inch screen, video camera, $230)
  • Considers foldable device
  • Rebrands Home Hub to Nest Hub (drops price to $130, expands to 12 more countries)
AR
  • To add AR to Google Maps (for Pixel users)
  • Google Search results in 3D AR
Privacy
  • Adds incognito mode to Google Maps
Search
  • To add podcasts

Thursday, May 02, 2019

Spectrum holdings and caps in the Netherlands

Spectrum holdings in the Netherlands, with caps for future auctions in 2020 (700, 1400, 2100) and 2022 (3500).


AvailableCapCurrent holdingsMaximum biddable
40%KPNVZT-MobileTotalKPNVZT-Mobile
700paired600
800paired6020202060
900paired7020203070
Total19076404050130363626
1400unpaired400
1800paired140404060140
2100paired120404040120
2600unpaired603003060
2600paired130206050130
Total490130140180450665616
35002900
Total2901160000116116116
TOTAL970388170180230580218208158

Amazon break-down: e-commerce, web services, renewable energy, Kuiper Systems

Amazon really has only two platforms: e-commerce and web services (with some links between them, such as Prime).
On each, it is continually expanding, including wholesale services.

Renewable energy could be a third, esp. when it opens for third parties, turning Amazon into an energy provider.

Kuiper Systems seems a long shot, but potentially turning Amazon into a global ISP.


Platform
E-commerce
goods
ordering
distribution centers
delivery
shipping
physical stores
Web services
AWS
Media services
3rd Party services
Voice assistant
Amazon Chime
Amazon Pay
Renewable energy
Kuiper Systems



Saturday, April 27, 2019

KPN 19Q1: opex down, capex up, outlook flat

Opex
  • Cost savings (new program) EUR 27m (target 2019-2021: 350m from EUR 2.015b in 2018).
  • 50% of SME base migrated to KPN EEN.
  • KPN EEN reduces cost-to-serve 25% by 2021, reduces IT-systems 75%.
Capex
  • Started 11 FTTH projects (XGS-PON from Nokia, max 10/10 Gb/s).
  • Orders Huawei equipment for 5G radio network.
  • Network to be 5G-ready by end 2021.
Outlook
  • To focus on 4 KPIs: adjusted EBITDA After Leases, adjusted indirect opex AL, FCF, leverage ratio (net debt AL).
  • Outlook 2019 maintained (EBITDA flat, capex 1.1b, FCF lower, div 12.5c).
  • Outlook 2019-2021 maintained (EBITDA organic growth, capex flat, FCF CAGR MSD, progressive div with FCF), medium term leverage target max 2.5.
Other
  • Telefonica DE stake reduced to 3.5%, from 4.4% end 2018.
  • Revenue contribution KPN Wholesale up to 11.5%.

Tuesday, January 22, 2019

Telekom DE build-out plans 2019, part 2: mobile densification, 5G, FTTH, FTTO, IoT

Deutsche Telekom's Telekom DE: build-out plans for 2019 (part 2):

Mobile
  • 2k new base stations (o/w 300 in Bavaria, 250 in BW, 250 in NRW; focus on roads & railways; o/w half in rural areas)
  • add small cells (mainly in Hamburg, Berlin, München; in public phones, lampposts, street furniture)
  • additional 5G test sites (Darmstadt 19Q1; currently Port of Hamburg)
Fixed
  • 60k km fiber (currently 500k)
  • expand FTTH (61k HH in Bautzen, 47k in Märkischer Kreis, 45k in Sachsen, 30k in Stuttgart)
  • upgrade 5m HH from <50 to="">50 Mb/s
  • connect 140 business parks to FTTO
IoT
  • expand NB-IoT (machine/sensor network) nationwide by end 2019 (currently 35k connected parking spaces, with Park & Joy app, x2 or x3 in 2019)

Monday, December 31, 2018

Telekom Deutschland: to add 2 million households to FTTH per year

Telekom DE build-out 2018 and future plans
  • added 60k km fiber (total 500k)
  • added 23k street cabinets (total 177.6k), to complete FTTC YE 2020
  • total 100 business parks (45k businesses) with FTTO (100 Mb/s - 100 Gb/s)
  • added 1,300 base stations (total 27k; coverage 99.8% pops and 97.6% area; LTE coverage 97.8% pops and 97% area; single-RAN)
  • total FTTS penetration 80% of sites
  • 5G test sites in Berlin (Schöneberg & Mitte; 2 Gb/s, 3 ms latency) and Hamburg port
  • campus networks (LTE-based, with edge computing, AI) with Osram in Schwabmünchen and with RWTH Aachen University (planned)
  • 26m HH have at least 100 Mb/s
  • plans large-scale FTTH (2m HH/yr) and 5G
  • target 3k business parks with FTTO by YE 2022
"Deutsche Telekom will have largely completed its FTTC (fiber to the curb) upgrade by the end of 2020. This will be followed by the large-scale buildout of FTTH (fiber to the home), in which Deutsche Telekom will equip up to two million households with FTTH every year."

Thursday, November 29, 2018

KPN CMD 2018: no revenue growth; EBITDA and FCF growth from savings

General

  • Strategy
    • organic sustainable growth (note: growth refers to EBITDA, FCF, not to rev)
      • based on innovative operating model and commercial approach
        • based on premium, vlaue, focus, lean
    • value over volume (esp. in LE segment)
      • not competing for market share
      • consumer: grow the converged base
      • business: stabilise service rev & EBITDA (mid 2020) (note: adj e2e EBITDA, i.e. incl Networks portion (not reported after 2016))
    • lean operating model
    • to accelerate strategy for 2019-'21
    • new technology
      • fiber, 4G/5G, virtualisation/cloud
      • faster, higher customer satisfaction, lower costs
      • enables service switch-off (from all-IP) and copper network switch-off (from FTTH)
    • targets lean, faster & more agile company, more flexible, faster time-to-market, faster innovation
    • 3 prios
      • best smart converged infra (add 1m FTTH HP by 2021)
      • focus on profitable growth (add 300k converged HH, convergence to 70% of postpaid; stabilise adjusted e2e EBITDA on business market)
      • accelerate simplification and digitalisation
  • Financial targets
    • progressive dividend
      • based on sustainable FCF growth
        • based on organic EBITDA growth and stable capex
    • plans cost savings 350m by 2021 (not run-rate, i.e. run-rate 350m is reached mid 2021; opex only, this time; net of restructuring costs and incidentals)
    • opex savings large part from restructuring; effect on FCF: cash out after 6 months (pay out severance), accreditive after 12 months)
    • maintains 2018 guidance
    • capex
      • remains 1.1b EUR/yr (excl. spectrum)
      • shift to access networks (FTTH, 5G), from 33% to over 50%
      • IT/TI lower, CPE lower
      • invest in future-prof technology
    • growing FCF (for progressive dividend and deleveraging)
    • mid term target leverage below 2.5 (incl. spectrum)<2 .5="" font="" incl.="" spectrum="">
    • service revenues to stabilise
  • Other
    • 100 developers in Amsterdam (eliminate 5 Indian developers for 1 in Amsterdam)
    • sustainability: green energy (2011), CO2 neutral (2015), 25% energy redux (2020), circular (2025)
    • T-Mobile/Tele2 merger: no substantial change expected; solid players are good for the market
    • open cable: no short-time effect due to long-running existing contracts with wholesale customers
  • Main risks
    • execution
    • declining revenues
    • cord cutting (FT, TV): no
    • engineering capacity for FTTH roll-out: no

Networks

  • Best networks, enable innovative tech, accelerate (simplification, digitalisation)
  • FTTP
    • currently 2.35m FTTH HP (30%), FTTC coverage 50%, FTTS 80%, accelerate FTTO
    • target +1m to 3.4m FTTH HP (over 40%) by YE 2021
      • regional approach, no nationwide coverage (complement with copper and FWA)
      • trusted relationships with 8 or 9 construction companies for complete service package
      • speeding up from end 2019
    • improvements
      • roll-out 650 EUR/home (cheaper labour and equipment, optimised engineering), to be reduced further
      • design in 20 hr (down from 2 yr)
      • raises utilisation 8 pp
      • pay-back time 50% shorter (result of lower capex, higher utilisation, higher ARPU, lower churn)
  • Copper
    • to finalise copper upgrade 2019 (2500 cabinets for 500k HH on FTTC)
    • plans to switch off copper from 2019, customers to be migrated to FTTP (first in 6 areas)
  • Gigabit
    • to add Gfast (FTTB, 1 Gb/s)
    • total reach 1 Gb/s 45% YE 2021 (40% from FTTH, 5% from Gfast), 200 Mb/s 70%
  • Hybrid
    • for rural
    • to add 200k additional subs with DSL/LTE hybrid (50 Mb/s)
  • 5G
    • plans 5G-ready network (i.e. software upgradeable)
    • massive MIMO
    • "4G connects people, 5G connects society"
    • 5G mostly for B2B
    • 5G field labs (agro in Drenthe, urban in Amsterdam, automotive in Helmond, harbour in Rotterdam)
    • government decision on 3.5 GHz band expected 181218
  • Other
    • single core network, from 5 currently (rationalise, centralise, virtualise (NFV, SDN))
    • decentralised CDN at 160 metro core locations (offload 70% of core traffic, low latency)
    • all-IP 100% by YE 2021; enables legacy switch-off (PSTN (450k users), ISDN (160k users), SDH, 3G)
    • plans 28 GWh power savings 2019-'21
    • target 50% virtualisation YE 2021 (currently 5%)
    • reduce 20 to 2 IT stacks (1 for consumer, 1 for business)


Consumer

  • strategy: best access, grow converged base, value
  • targets
    • add 300k converged HH by YE 2021, 70% of postpad base converged in 2021
    • to raise SIMs/HH 10%
  • FTTH raises NPS 15%, ARPU by EUR6, BB share 9pp, lowers churn 34%
  • we are the best, so we don't need exclusive content

Business

  • targets: stabilise service revenues, stabilise EBITDA (adj, e2e) by mid 2020
  • grow in profitable segments; compete for profitable tenders (in LE segment) only
  • total customers: 350k SoHo, 225k SME, 2k LE
  • to reduce portfolio 50% by 2021
  • to raise connectivity at business parks: 100 Mb/s to 70% (currently 52%)
  • KPN EEN (platform for SME and LE)
    • target penetration to 100% in SME (currently 35%)
    • raises NPS 10 points
    • time-to-market x2
    • low churn (5%)
    • cost to serve -25%
    • 75% fewer IT systems
    • simplified organisation
  • revenue growth SoHo positive, bottoming at SME, still declining in LE

Finance

  • targets 2019-'21: organic EBITDA growth, capex stable (1.1b), FCF growth, progressive dividend
  • past FCF growth from low cash tax (continues), decreased interest (continues; 55% lower o/w 30% result of lower debt, 25% result of lower interest rates), capex (now fixed)
  • now EBITDA growth from opex savings & stabilising rev
  • targets "cable-like margin"
  • opex redux to continue "for a decade"
    • portfolio: rationalise, simplify
    • e2e digitalisation front and back-end
    • all-IP and virtualisation (incl. CPE)
    • IT landscape rationalisation
    • organisational effectiveness
  • execution strategy ESSA (eliminate simplify standardise automate)
  • to provide guidance on FCF, restructuring costs, div with Q4 results (each year)

Tuesday, July 31, 2018

5G auction Spain translates to other auctions and spectrum holdings

In Spain, 200 MHz in the 3.5 GHz band was auctioned for 20 years for total proceeds of EUR 1.41 billion. Prior to that, MasMovil bought 40 MHz for EUR 30 million. This works out to be 0.755 c/MHz/pop/year for the auction and 0.080 c/MHz/pop/year for the MasMovil transaction.

Conclusions
  • Good deal for MasMovil.
  • No matter all the differences between auctions (bands, number of participants, etc.), this may be translated to other auctions. The Dutch 2019 auction would have proceeds of EUR 572 million at the valuation of the Spanish auction.
  • Apparently, satellite stocks respond to these auctions because of the potential 5G spectrum holdings (SES, Intelsat, Eutelsat).

Wednesday, June 20, 2018

Telstra Investor Day: Telstra2022 Plan

Highlights from Telstra's Telstra2022 plan:

4 Key pillars

1. Simplify offerings

  • consumer & SME plans from 1800 to core 20
  • all-digital experience (complete migration consumer & 50% of business by 210630
  • to reduce customer service calls by 33% in 2 years and 67% by 21/22

2. Stand-alone infra business

  • establish Telstra InfraCo from 180701, potential demerger when nbn complete or entry of strategic investor; contains fixed, datacenters, fibre, copper, HFC, international subsea cables, exchanges, poles, ducts & pipes; no mobile assets
  • customers: Telstra, nbn, other wholesale
  • 3k employees
  • assets AUD 11b
  • rev AUD 5.5b, EBITDA AUD 3.3b

3. Simplify structure

  • new operating model & organisational structure TBA July 2018
  • to reduce 2-4 management layers
  • to establish Telstra Global Business Services (point of consolidation for all large scale back-of-house processes and functions)
  • to invest in 1500 new roles, Transition Program for 8k job cuts & training program for those who stay (together funded with AUD 50m)

4. Cost reduction program & portfolio management

  • plans asset sales AUD 2b by YE 19/20
  • to increase cost savings by AUD 1b to 2.5b by YE 21/22
  • underlying core fixed costs from AUD 7b in 16/17 to AUD 4.5b by YE 21/22

5G

  • Plans SDN & 5G, network ready 18/19H1, high-demand areas ready YE 19/20

Guidance

  • transistion from current program to reduce revenues AUD 500m over 3 years; incremental benefits from previous investment program AUD 500m
  • target capex/rev 16-18% in 18/19, 14% in medium term
  • expects fixed & mobile market decline 2-3% in 18/19
  • guidance 18/19 (AUD): rev 26.6-28.5b, EBITDA 8.7-9.4b (before restructuring cost 600m), one-off from nbn agreement 1.8-1.9b, capex 3.9-4.4b
  • ordinary dividend pay-out ratio 70-90% of underlying earnings, special dividend from nbn 75% of net receipts; dividend 17/18 22c