Mobile tower in the style of Dali

Amazon Devices & Services 2022

Amazon Devices & Services 2022: Launches in US & Canada:

• eero PoE 6 ($300) and eero PoE Gateway ($650) devices (WiFi) and eero for Pro Installers (free with device) and eero for Business (annual license $300) (services)
• Blink Wired Floodlight Camera ($100) and Blink Mini Pan Tilt (mount, $30)
• Fire TV Omni QLED Series (smart TV, with Alexa, Ambient Experience; 65 inch for $800, 75 inch for $1100)
• Halo Rise (bedside sleep tracker; $140 incl 6 mo free Halo service)
• Kindle Scribe (10.2 inch) e-reader with pen (Basic or Premium) for taking notes in books; from $340
• 4 (5) new Echo devices (smart speakers, with Alexa):
• Echo Dot (gen 5; incl eero mesh WiFi extender, $50)
• Echo Dot with Clock (incl eero mesh WiFi extender, $60)
• Echo Dot Kids (Owl and Dragon designs; incl 1 yr free Amazon Kids+; $60)
• Echo Studio (with spatial audio tech, $200)
• Echo Auto ($55; can call for roadside assistance)
• Fire TV Cube (gen 3 streaming media player, incl Alexa, Alexa Comms, WiFi 6; $140), with Alexa Voice Remote Pro ($35)
• Ring adds radar detection to Spotlight Cam Pro ($230 or $250 with solar), adds Spotlight Cam Plus (from $200)
• Adds features to Astro (robot, $1000): pet detection, home security
• Adds smart home features to Alexa

Telenet Capital Markets Day: focus remains on Flanders

CMD From Connectivity to Customer Centricity, 2023-2025

Strategic focus:

• Telenet growth with simple & personalised offerings:
• Residential (FMC, In-Home Connectivity, entertainment)
• E&M (Content, prodco, VR)
• B2B (Private 5G, ICT, Managed services, security; growth organic & via acquisitions)
• NetCo (with Fluvius)
• Transform operating model (based on DigitalBridge and Fluvius transactions)
• Invest to create value longterm (NetCo EUR 2b, platforms 200m, 5G 300m)
• ESG a part of all

Confirms outlook 2022:

• Rev EUR 2.6b
• expenses 1.7b, capex 0.5b (excl NetCo), opex excl personnel & energy -5% = EUR 20m
• leverage lower end of 3.5-4.5x range
• dividend fixed 1 EUR/yr (rising midterm from selling NetCo stake or optimising FTTH, rising longterm from lower capex intensity post FTTH)

To expand outside core into Digital Home, Business & Life:

• Tadaam (FWA)
• june (energy)
• Safespot
• The Park (VR)
• Unit-T
• its me
• doccle (digital document platform)

Raises Caviar (prodco) stake:

• from 49 to 70%; management remaining 30%
• Consolidation from 221001
• 2021: rev EUR 126m, EBITDA 8.8m

NetCo:

• target 70% coverage in Flanders by 2029
• fiber reduces maintenance 40%, power consumption 80%
• target peak run-rate 430k premises/annum (2025-27)
• 2022E KPIs: 2.1-2.2m subs (penetration ~60%), blended ARPU ~EUR 22, EBITDA margin longterm ~80%, maintenenance capex longterm <10% of rev
• 2022E: rev EUR 0.6b, capex 0.1b, leverage 4.9x (longterm 6.0x)

NetCo original announcement (220719):

• Establish 66.8/33.2 JV NetCo with Fluvius System Operator
• to migrate from HFC to 'network of the future' (incl FTTH, target coverage 78% by 2038; plans Docsis upgrade in remaining areas, Docsis 4.0 from 2024), target 10 Gb/s
• total capex EUR 2.0b (most 2023-2029; 650 EUR/home (excl capex for connection) for FTTH for >50% of homes)
• fully financed (incl towers proceeds EUR 745m), leverage target 5.0x (ie net debt EUR 2.4b)
• both to contribute current HFC & fiber assets, Telenet to contribute 170 employees (to hire 50 more), Fluvius to contribute lease to Telenet until 2046 (covers 1/3 of Flanders), to end on closing of JV early 2023
• to be fully consolidated
• open for additional investors, to provide non-discriminatory open access wholesale
• to launch with near 60% occupancy
• net debt Telenet to be reduced by EUR 500m (0.4x) on ending Fluvius lease, to maintain leverage at 4.0x
• lowers div pay-out floor to 1.00 EUR/yr for 2023-29 (payable in May after AGM) from currently 2.75 EUR/yr
• capex to drop strongly after 2029
• plans CMD end Sep 2022
• current data usage on fixed average 239 GB/mo

Amazon Prime Video and exclusive live sports - updated

Amazon Prime Video and the NFL:

• Content deal with NFL: $13b over 11 yr for Thursday Night Football (TNF) games, starts 220915
• Offers deals & discounts on NFL gear & clothing to Prime members
• Partners with Draft Kings for sports betting
• Links to X-Ray (real-time stats) via Alexa
• Signs 5 sponsors to TNF: Little Caesars, DraftKings, Carnival Cruise Line, Audible, Mercedes-Benz
• Viewing beat internal expectations, resulted in a record number of sign-ups to Prime subscription
• Nielsen: 13.0m viewers watched 220915 (incl 1.16m from OTA broadcast) [average previous season on Fox & NFL Network: 12.8m]

Conclusions:

• The deal ranks as the #2 acquisition in Amazon's history.
• The US market is ready for streaming-only of live sports.
• There are lots of synergistic effects: Prime sign-ups, the use of Alexa, Audible sponsorship, partnership for betting, etc.
• Exclusive live sports is a major content category.
• Amazon is willing to invest heavily in Prime Video because it drives the Prime membership.
• Amazon may export the strategy to other countries where scale is sufficient and where the market is ripe for streaming-only (or streaming-first).

Telenor Capital Markets Day 2022 - highlight: potential sale of 30% stake in Norway FTTP network

A CMD with apparently remarkably little noteworthy:

General:

• New structure: Telenor Nordics & Telenor Asia
• To become leader in Nordics in telecom & infra (to establish infra as separate business), security, IoT
• To partner in Asia (or IPOs) to build scale and become #1 in several markets
• To focus on 4 business areas: 1. Leading Nordic telco, 2. Strong Asian entity, 3. Leading Nordic infra co, 4. Adjacent business (current portfolio net asset value NOK 10-15b)

Outlook 2023-25:

• Nordic SR growth LSD-MSD (incl DD growth for new services)
• Nordic EBITDA growth MSD (annual opex redux 1-3%)
• Growing dividend
• Net debt/EBITDA 1.8-2.3x
• Cumulative FCF from Telenor Asia NOK 12b
• NPV synergies Asia NOK 20-25b
• FCF to cover dividend in 2025

Other:

• Norway copper-switch-off 2023, saves NOK 0.7b
• Infrastructure business:
• fiber (600k HP in NO; potential sale of 30% stake, proceeds partially for SBB)
• datacenters
• towers (26400 sites o/w 21700 fully owned; plans structural transaction)

VodafoneZiggo: is an IPO doable?

 KPN:

• Market cap: EUR 13.14b
• Net debt at 22Q2 (incl. leases): EUR 6.21b
• EV: EUR 19.35b
• Adj. EBITDA AL TTM: EUR 2.38b
• Multiple: 8.13x

VodafoneZiggo:

• Assumed multiple: 8.13x
• Adj. EBITDA TTM: EUR 1.91b
• EV: EUR 15.53b
• Net debt at 22Q2 (incl. leases): EUR 13.28b
• Market cap: EUR 2.25b

VodafoneZiggo:

• Assumed market cap: EUR 0
• Net debt at 22Q2 (incl. leases): EUR 13.28b
• EV: EUR 13.28b
• Adj. EBITDA TTM: EUR 1.91b
• Multiple: 6.95x

VodafoneZiggo requires a multiple of (way) over 7x for an IPO. Otherwise, looming for Liberty Global and Vodafone Group is a sale of VodafoneZiggo for EUR 1 (and the buyer taking over the unit's debt), similar to:

• T-Mobile sells Sprint fiber assets to Cogent for $1.
• ProSiebenSat.1 buys Warner Bros. Discovery out of Joyn for €1.

In Belgium, all listed majors (Proximus, Telenet, Orange Belgium) are currently valued at around 4x. A higher multiple in the Netherlands is plausible (no newcomers, fibre upgrades are carried out, regulation is not a worry) vs. Belgium (uncertainty over Orange/VOO deal, two newcomers in mobile, questions over how Telenet will go nationwide). VodafoneZiggo's multiple would likely be somewhere betwen KPN (8x) and 'Belgium' (4x).

Not selling the unit carries the risk of underinvesting and undermining the longer term value. Alternatively, heavy investments could pay off. Or possibly any hidden value in assets, such as the HFC network (assuming that Ziggo will lease it back) and the mobile base stations, could be monetised.

All in all, any sale is currentky unlikely. Cash flow generation is sufficient to pay all the bills, including dividends. The longer term risks are:

• falling revenues, from dropping market shares (esp. from Delta and ODF overbuilding) and/or
• rising costs, from interest (or even promotions)

Calendar: events before Q3 reporting - Updated

• 7 Sep: Apple Far Out
• 8 Sep: Disney+ Day
• 8 Sep: Microsoft concessions to CMA (UK) due for Activision Blizzard deal
• 9 Sep: Walt Disney D23 (through Sep 11)
• 9 Sep: IBC (through Sep 12)
• 13 Sep: Hearing US Senate of Peiter Zatko (Twitter whistleblower)
• 14 Sep: Amazon Accelerate for sellers (through Sep 15)
• 14 Sep: Universal+ launches in Africa
• 20 Sep: Telenor analyst day
• 20 Sep: SkyShowtime launches in Nordics (NO, SE, DK, FI)
• 24 Sep: Netflix TUDUM
• 26 Sep: Telenet analyst day
• 26 Sep: Sinclair launches Bally Sports+
• 28 Sep: Vodafone Social Contract investor briefing
• 28 Sep: Google Search On (Maps, Shopping)
• 28 Sep: Amazon Devices & Services 2022
• 29 Sep: Telefonica Metaverse Day
• 6 Oct: Google Pixel hardware event #MadeByGoogle
• 11 Oct: Meta Connect (metaverse, AR, VR)
• 12 Oct: Microsoft Fall 2022 Event (Surface)
• 15 Oct: Razer Con
• 17 Oct: Twitter vs. Musk trial
• 25 Oct: SkyShowtime launches in NL, PT
• 27 Oct: consultation Spain ends for 26 GHz auction

SkyShowtime coming - what we know so far

 SkyShowtime:

• 50/50 JV of Comcast (NBCU, Peacock, Sky) and Paramount (formerly Viacom CBS)
• Focus on 22 European countries:
• Iberia
• Nordics
• Netherlands
• Poland
• CEE: Albania, Bosnia & Herzegovina, Bulgaria, Croatia, CZ, HU, Kosovo, Montenegro, North Macedonia, RO, Serbia, Slovakia, Slovenia
• Other European countries: 
• Sky footprint (UK, Ireland, Germany, Austria, Switzerland, Italy), offers Peacock
• Paramount+ footprint (current obligations, such as France, Belgium, Greece, Baltics)
• 220920 Nodics
• 221025 NL, PT

News:

210818	Plans SVOD launch 2022 in 22 Europe countries: ES, PT, Andorra, Nordics (DK, FI, NO, SE), NL, PL, CEE (Albania, Bosnia & Herzegovina, Bulgaria, Croatia, CZ, HU, Kosovo, Montenegro, North Macedonia, RO, Serbia, Slovakia, Slovenia), 90k HH, to offer premium & original content from Sky Studios, NBCU, Universal Pictures, Peacock, Paramunt+, Showtime, Paramount Pictures, Nickelodeon; to include scripted dramas, kids & family, key franchises, premiere movies, local programming, documentaries/factual content, total >10k hr; complement to recently announced Paramount+ partnership with Sky in UK/IE, IT, DE/CH/AT
220111	Appoints Monty Sarhan (Comcast, Epix (MGM), ViacomCBS) CEO
220202	Received all regulatory approvals
220310	Appoints Francesca Pierce CFO, Jen McAleer CBO (Brand), Richard Howard CMO (Marketing), Josh Snow CPO (Product), Henriette Petersen RGM N Europe, Gabor Harsanyi RGM C&E Europe; plans launch 2022 with 10k hr of content from Paramount & Universal (new & library), Showtime (scripted series), Paramount+, Sky Studios, Peacock, local originals, Nickelodeon & DreamWoks & Illumination (kids & family programming); ultimately for Albania, Andorra, Bosnia & Herzegovina, Bulgaria, Croatia, CZ, DK, FI, HU, Kosovo, Montenegro, NL, N Macedonia, NO, PL, PT, RO, Serbia, Slovakia, Slovenia, ES, SE
220613	Appoints Jon Farrar (formerly BBC) Head of Programming
220614	Plans launch autumn (mid Aug) 2022
220814	Plans launch 2022 (Sep in NL)
220904	Plans launch 220920 in DK (DKK 69), FI (EUR 7), NO (NOK 79), SE (SEK 79), next (22Q4) in NL, then (22Q4-23Q1) in ES, PT, Andorra, CEE (Albania, Bosnia &Herzegovina, BG, Croatia, CZ, HU, Kosovo, Montenegro, North Macedonia, PL, RO, Serbia, Slovakia, Slovenia)

Netflix's AVOD tier - what we know so far - UPDATED

• 220419 (22Q2): plans cheaper AVOD tier in 1-2 yr; 2 acquisitions (Scanline, Boss Fight Entertainment) cash cost $125m;
• 220510 (NY Times) plans to launch cheaper AVOD tier 22Q4
• 220608 (rumour) considers offer for Roku
• 220614 (rumour) talks with Roku, Comcast on handling ad sales for ad-supported tier
• 220621 (rumour) talks with Google, Comcast (incl FreeWheel for tech, NBCU), Roku, DoubleVerify to develop ad-supported tier
• 220630 (NY Times) talks with rights holders over ad placement (WSJ): renegotiates content deals with Warner Bros, Universal, Sony Pictures Television
• 220713 (statement) Partners with Microsoft for ad sales on AVOD tier [see 220419] (WSJ) based on Microsoft's Xandr unit; plans AVOD service in >10 countires (incl Canada, UK) end 2022
• 220719 (22Q2) plans AVOD tier early 2023 (may lack some content that was not renegotiated for ads)
• 220803 (WSJ) to charge advertisers $80 per 1000 views (SMI) may charge $25-45 CPM
• 220827 (Bloomberg) AVOD tier to cost 7-9 $/mo, ad load 4 min/hr (not in kids programming or in original movies), to launch 22Q4
• 220831 (WSJ) seeks $65 CPM from advertisers [see 220803], AVOD tier to launch 221101, to cap spending to 20m $/brand/yr, to sell 15 & 30 sec ads before & during programs
• 220901 (Variety) to launch AVOD tier 221101 (before Disney+ AVOD 221208) in US, Canada, UK, DE, FR, advertisers commitment minimum 10m $/annum, targets 500k subs YE 2022, will not serve ads based on geography (except by country), age, gender, viewing behavior, time of day; frequency cap for individual ads 1 view/hr & 3 views/day, $65 CPM is soft (negotiable)
• 220914 (WSJ): plans to launch AVOD Dec 2022 in US, Canada, Brazil, Mexico, Japan, S Korea, Australia, UK, FR, DE, ES, IT; expects 40m AVOD subs end 2023 (o/w 13.3m in US), 4.4m YE 2022 (o/w 1.1m in US)