Week 8 in Telecoms, Internet, Media

Corporate

• TIM: 20Q4 & 2021-23 Plan Update Beyond Connectivity: 1. Unique commercial proposition, 2. Best technological infrastructure, 3. Further improve operational excellence, 4. Leaner organizational model; works with 5 factories: Noovle (cloud), Telsy (cyber security), Olivetti (integrated IoT), Sparkle (int wholesale), TIM Vision (content)
• Proximus: 20Q4; guidance 2021: additional expenses (opex EUR 50m) for fiber migrations, IT transformation, cloudification, Mwingz (shared mobile network with Orange BE) roll-out (reducing capex), targets EBITDA EUR 1.750-1.775m, capex close to EUR 1.2b, to double fiber roll-out from 2020, net debt/EBITDA <1.6x, domestic rev close to 2020 level (EUR 4.285m), div 2021 and 2022 EUR 1.20 (floor); confirms #inspire2022 ambitions; opex redux CAGR 2020-22 1-2%, expands cost savings to EUR 400m over 2020-2025 (o/w half in 2020-22), targets domestic EBITDA to grow from 2022
• Vodafone
• Vodafone CZ plans strategic coop wit utility CEZ (70% state-owned)
• Vantage Towers Intention to Float (ITF) in Frankfurt March 2021 of meaningful minority stake; rumored valuation: EUR 15b, to raise EUR 4b
• Virgin Media UK (Liberty Global): CMA publishes responses from Sky & Vodafone regarding O2 merger; concerns on wholesale market for MVNOs and backhaul - O2 UK claims concerns addressed
• Akamai: Investor Summit
• 3-5 year Security targets: Application Security CAGR 20-25%, Network Security CAGR 20-25%, Security Services CAGR 10-15%, overall CAGR goal >20% (rev to more than double in 5 yr to $2.5b, addressable market $29b)
• 3-5 year CDN targets: Edge Delivery CAGR 0-3%, Edge Applications >30%, Services CAGR 1-3%, overall CAGR goal 2-5% (addressable market $18b)
• Financial targets Security: cash gross margin high 80s (2021: 86-87%), EBITDA margin high 40s (2021: 45-46%), oper margin mid 30s (2021: 34-35%), network capex low single digit (2021: 1-3%), R&D capex high single digit (2021: 8-10%)
• Financial targets CDN: gross margin high 60s (2021: 68-69%), EBITDA margin mid 40s (2021: 42-43%), oper margin high 20s (2021: 26-27%), network capex low double digit (2021: 11-13%), R&D capex mid single digit (2021: 4-5%)
• Total targets 3-5 yr: rev CAGR 6-10%, gross margin high 70s (2021: 76-77%), EBITDA margin mid 40s (2021: 44%), oper margin 30-32% (2021: 30%), capex mid teens of rev (2021: 16%)
• Roblox: Plans IPO via direct listing 210310
• Thomson Reuters: To invest $500-600m in AI, ML in 2 yr; to cut opex by $600m from eliminating duplicate functions, modernizing & consolidating technology, attrition, shrinking real estate footprint
• Twitter: Analyst Day: Goals:
• 1. Double development velocity by end 2023 (ie doubling the number of features shipped per employee)
• 2. 315m mDAU (monetisable DAU; currently 85% from brand ads, 15% from performance ads; global digital brand + performance ads market $150b, Twitter market share 3%) 23Q4 (20Q4: 192m, implies CAGR 20%)
• 3. more than double annual rev to $7.5b (2020: $3.7b) 
• Snap: Investor Day: guidance: revenue CAGR 50%; Usage stats: 5b Snaps/day, Snap Map 250m MAU, advertising 90% self-serve, digital ad market US share 2% (reach <50% of smartphone uesrs), reach 13-24 year olds >90% (US, UK, Australia, FR, NL), reach 13-34 year olds >75% (US, UK, Australia, FR, NL)

Networks

• Broadband Choices: report Internet Accessibility Index 2021 (based on speed & cost), ranking 169 countries: Denmark #1, Liechtenstein #2, US #3, NL #15
• FTTH
• Telefonica
• Telefonica Chile sells 60% stake in fiber network to KKR (Global Infrastructure Investors III Fund), $1b, to close 21Q2; to establish OA wholesale company; to expand pops coverage from 2m to 3.5m by 2023 (FTTH, 40k FTTO lines, FTTS); reduces debt by EUR 400m
• Telefonica Brazil plans fiber network spin-off to establish OA wholesale company FiBrasil, with investor (TBA 21Q1); Bloomberg: talks with Caisse de Depot et Placement du Quebec (CDPQ)
• T-Mobile NL to add 1m HP by 2025 with #2 investment partner (not Primevest), TBA 21H1, to start in 10-15 areas
• Mobile, 5G
• Ericsson Mobility Report 20Q4 update: global mobile subscriptions (8b, penetration 102%, unique active subs 6b; net adds 19m), mobile BB subs 6.5b (net adds 100m), 5G subs 220m at 130 providers (net adds 70m), 4G subs 4.5b (net adds 90m); total global mobile data traffic 60 EB/mo (+51% yoy, +9% qoq)
• EIB report Accelerating the 5G transition in Europe
• Umlaut: T-Mobile NL best network worldwide (962 points), KPN (954) and VodafoneZiggo (945) also in Top 10    
• Polsat Group sells 99.99% stake (2,069,656 shares) in Polkomtel Infrastruktura to Cellnex
• Malaysia plans government-owned wholesale 5G network via special purpose vehicle ($4b in 10 yr; also: FTTH), to adminster spectrum for all MNOs (part of digital  transformation by 2030); Microsoft, Google, Amazon, Telekom Malaysia to build & manage hyper-scale data centres & cloud services
• Google partners with Intel on cloud-native 5G; 3 main areas: 1. accelerating the ability of CSPs to deploy vRAN & ORAN solutions by providing next-gen infrastructure & hardware, 2. launching new lab environments to help CSPs innovate on cloud-native 5G, 3. making it easier for them to deliver business applications to the network edge; to develop reference architectures & integrated solutions for CSPs' for core network functions & edge network solutions
• 6G
• NGMN Alliance to focus on disaggregation, sustainability, 6G; plans to publish 6G Vision & Drivers White Paper report (version 1) March/April 2021
• EC proposes Smart Networks and Services project (incl 6G) as successor to 5G-PPP, EUR 900m
• LEO
• Starlink plans customer support center in Europe - To double speeds to 300 Mb/s & reduce latency to 20 ms later in 2021, targets global coverage by 2022; focus on low to medium population density areas

Services

• Video
• ViacomCBS: Streaming Event: Paramount+ to launch 210304
• Walt Disney
• Launches Star tab (75 series, 280 movies at launch) in Disney+ in Europe, ANZ, Canada, Singapore; content from content from ABC, Hulu, FX, Freeform, Disney Television Studios, FX, 20th Century Studios, 20th Television, more
• Disney+ price increases from 7 to 9 EUR/mo, 6 to 8 GBP/mo
• Release dates
• Rumor: Disney+ subs 40% in N America (40m), 30% in India, 30% in Europe & Latam
• Netflix: 10 Golden Globes (on 42 nominations)
• Music
• Spotify: Investor Discussion Spotify Stream On
• Facebook launches BARS app (first for iPhone, developed by NPE Team) for creating & sharing raps [a la TikTok]
• Smart city
• Las Vegas ordered smart city solutions from Siemens Advanta & Bluetech Park Properties, $7.5b in 6 yr (net-zero carbon footprint buildings within its own insular mini-city, automated multi-functional designs, renewable energy sources, photovoltaic super trees, various other interconnected innovations)
• Egypt (Administrative Capital for Urban Development) orders smart city ICT (datacenter, cloud services, to be operated by Orange Egypt) from Orange Business Services for new administrative capital (45km east of Cairo on a greenfield site, 700 km^2); 5 pillars: safety, connectivity, integration, digitalisation, replicability; to launch 21Q2
• Toyota starts smart city Woven City construction near Mount Fuji, 175 hectares, hydrogen-based, solar, robotics, AI, smart homes; appointed Bjarke Ingels Group as architects
• Stockholm ordered Univrses app to scan & map city streets from any car, transmitting & processing data in real-time to help create a more detailed picture of the state of the city’s streets, measuring everything from road damage to congestion, the location of streetlights to the state of road signage

Akamai new State of the Internet report

Akamai put out its 09Q1 State of the Internet report today.

Is usage growth outstripping available bandwidth?

Akamai just released its first quarterly 'State of the Internet' report (free registration). It focuses on security and connectivity issues, but also has some data on penetration and broadband.

Looking at the number of connections at high broadband speeds (> 5 Mb/s, page 13), the usual suspects top the list: South Korea (64%), Japan (48%), Hong Kong (35%), Sweden (29%). Two things stand out:

• Romania and Nepal in the top 10. I am not sure about the state of the internet in those countries, but perhaps it is a matter of 'double or nothing': you are either very well connected (probably a limited number of people), or not at all.
• There is a quarter-on-quarter drop in that number for several countries, including South Korea (-4.7%), Hong Kong (-9.8%) and Sweden (-9.0%). Perhaps this is a result of more people coming on line, and usage rising, whereas the network isn't upgraded at the same pace. Remember that no matter what the architecture or protocol is, fundamentally all networks (not just coax) use shared bandwidth.

Peer-to-peer round-up

We have recently seen growing interest in peer-to-peer technology - for several reasons: efficiency ('the Internet was not designed for TV'), attacking illegal file-sharing, starting new businesses.
BitTorrent's Bram Cohen invented the protocol of the same name in 2001. It uses 'swarming': files are broken into small pieces and stored on the PCs of network participants.
Keep in mind that there is a difference between downloading (the old illegal p2p file-sharing services) and streaming (e.g. Joost's legal service).

Recent news:

• BitTorrent launched the BitTorrent Entertainment Network.
• Veoh launched. Azureus' Zudeo is to follow shortly.
• Joost launched its closed beta - an open beta to follow this summer. As an early user (but not much of a couch potatoe) I have to say it looks great. At this stage I think it makes no sense complaining about hiccups or limited content.
• Babelgum too. An open beta is scheduled this month.
• The BBC plans the iPlayer May or June for distributing BBC content.
• ROO Group (News Corp bought 10%) acquired Wurld Media, operator of Peer Impact, for its p2p technology.
• UUSee, over in China, raised American dollars.
• Robert Cringely speculated about Apple TV as the foundation of Apple's own p2p network, allowing the company to cancel its Akamai contract and save on network costs.

Comments:

• Bandwidth has its price. In general, it always makes sense to be efficient about it (compare such diverse things as MPEG4, AJAX and spectral efficiency of WiMAX - all aimed at being prudent about your use of bandwidth).
• Alexander Cameron points to the fact that p2p networks require 'a critical mass of users watching the same content' and that 'it will bring the ISP's war directly to the content owning communities door'. I might add to the first quote: this spells doom for unpopular content. P2P will not serve the long tail very well.
• In the end, efficiency (p2p) is fine, but we still need to throw a lot more bandwidth at the capacity crunch problem. Robert Cringely had an interesting introduction to yet another solution (besides CDNs such as Akamai): NuMetra. By the way, he apparently agrees with Cameron: 'p2p cost savings isn't a true savings but is rather a hidden cost borne by the Internet Service Provider running the last mile connection'.
• DRM comes into play; the new BitTorrent is cumbersome because of it. For a round-up of DRM issues, go here and click on the links in the first paragraph.
• Who knows illegal file-sharing can be migrated to any of the above legal networks - especially when the services are free + ads (Joost, Babelgum). Skyrider serves ads in video files on p2p networks.