Telecoms, Internet, Media - The news of week 20

Curated selection of the major news in Telecoms (mainly Europe), Media & Internet (global), as well as the main news from the Netherlands in telecoms and media.

Our main story this week was published on the Telecompaper website (in Dutch, an English translation may follow). It is a reflection on the state of broadband competition in the Netherlands, now that the market has been deregulated. There are two central themes:

1. KPN should stick to its original FTTP technology choice (point-to-point active ethernet), rather than switching to the somewhat cheaper PON-based variants next year. Sources tell us that T-Mobile filed an injunction against the change, but this fruitless in the deregulated market. The p2p technology allows for ODF access services, enabling wholesale customers to build their own nationwide active layer. Only this will guarantee equal competition between KPN Wholesale customers (lowering their opex considerably, but forced to make sizeable capex investments) and KPN Retail. At the same time, this would test challengers' true commitment to the market.
2. In exchange, KPN could allow co-investment by inviting T-Mobile's network investments partner(s) (currently Primevest) to buy into its network in exchange for a minority stake. This ties nicely into last night's Financial Times article, claiming that BT Openreach is looking for co-investors.

Telecoms - COVID-19 related - retail

• Telenet, Orange re-open shops, some staff return to office
• French telecom operators start re-opening retail stores
• Orange gradually reopens its stores in France
• UPC Poland re-opens shops
• Telia Estonia re-opens all its shops
• Vodafone to reopen offices and retail stores in New Zealand

Telecoms - COVID-10 related - traffic

• UK broadband networks are standing up to coronavirus pressures – Ofcom
• The lockdown live-streaming numbers are out, and they’re huge

Telecoms - COVID-19 related - metadata

• ETSI starts industry group on Covid-19 tracing app standards
• EU issues guidelines on interopeable tracing apps to support international travel

Telecoms - Q1 earnings reports

• Vodacom Group FY revenue rises 5%, subscriber base up by 6 mln
• Vodafone maintains div on underlying FY growth, sees lower EBITDA in new year
• QSC record small progress in revenues, EBITDA in Q1
• 1&1 Drillisch grows revenues in Q1, confirms outlook for 2020
• United Internet sees revenues grow, stable EBITDA in Q1
• Ceconomy posts Q2 loss as revenues hit by store closures
• Deutsche Telekom maintains FY growth outlook as Q1 sales grow 2%
• Magyar Telekom revenues stable at HUF 159 bln in Q1
• OTE grows revenues, EBITDA 4% in Q1
• Sunrise grows revenues in Q1 sees decline in EBITDA, net income
• Iliad posts 7% revenue growth in Q1 on slower equipment sales, service revenue up 10%
• Bouygues Telecom's EBITDA growth stalls in Q1, service revenues up 10%
• Inwit revenues up 8.5% to EUR 103 mln in Q1, EBITDA up 6%
• Retelit Q1 revenues double to EUR 34 mln following PA Group merger
• Eutelsat's underlying revenues down 1.6% in March quarter
• P4 lifts revenues 4% in Q1
• Cyfrowy Polsat Group revenues up in Q1 on wholesale expansion
• A3 says Q1 results show relative resilience to virus but businesses delay IT service projects
• Ice reaches positive adjusted EBITDA in Q1, foresees H2 EBITDA breakeven
• Masmovil adds 373,000 customers in Q1, confirms full-year guidance
• Turk Telekom revenues increase 17% to TRY 6.3 bln in Q1
• Telekom Slovenije Group improves margins on sales up 1% in Q1

Telecoms - capital markets

• Equinix starts USD 1.25 bln share offering to help pay for potential acquisition
• Equinix prices 2.25 mln shares offering at USD 665 per unit
• Siminn announces ISK 500 mln share buy-back
• Vodafone shows no interest in rival bid for Virgin Media
• Intelsat files for Chapter 11 protection to restructure debt
• WEL, Waipa sell Ultrafast Fibre stakes for NZD 854 million
• BT in talks to sell stake in Openreach - report
• BT denies reports of talks to sell multi-million pound stake in Openreach

Telecoms - 5G

• T-Mobile US 5G-600 network reaches 49 states (6k cities, 215m covered pops), to add Alaska May 2020
• Vodafone ES expands 5G-3500 to 6 cities, total 21
• RWTH Aachen Univ launches campus network, with Ericsson, for 5G research
• Sunrise 5G-3500 coverage reaches 535 cities; target 5G-700 coverage 90% 20Q3
• DNA (= Telenor) expands 5G to Rauma, Nummi, Paroalho etc (Satakunta), Pori (Hanhiluoto, Karjaranta, Kirjurinluoto etc); plans expansion to Lahti, Oulu, Jyväskylä, Kuopio, Vaasa, Hämeenlinna, Seinäjoki, Heinola, Pirkkala, Lempäälä
• NZ cancels 5G auction (3.5 GHz band) over corona virus; awards spectrum to Dense Air (40 MHz), Spark (60), 2degrees (60); NZD 250k per 10 MHz

Media - COVID-19 related - events

• U.K. Cinemas Won’t Reopen Sooner Than July 4, Government Confirms
• U.S. Theatrical Releasing Slowly Returning With 200 Locations Open
• Disney reopens its Shanghai theme park, with many restrictions
• Broadway Shutdown Extended Through Labor Day
• Hollywood Bowl Officially Cancels 2020 Summer Season
• Publicis Groupe Reveals Phased-In Office Reopening Strategy
• Omnicom's Three-Phase Return To Office Plan

Media & Internet - Q1 earnings

• Tencent Music Drops After-Hours on Disappointing Revenue
• Tencent lifts revenues in Q1 but profit growth slows amid pandemic
• Meredith Corp. Delays Release Of Earnings Report Amid 'Challenging' Environment
• Sony FY results down after weak Q4 due to Covid-19 disruptions
• Mediaset Q1 sales down 5% to EUR 682 mln, profit plunges 47%

Media & Internet - other

• Could Amazon be about to take over your local cinema? With Odeon's owner in trouble, deal could help tech giant shoot ahead in movie wars
• Telstra announces AUD 300 million Foxtel impairment following News Corp write down
• KKR buys 5.21% stake in ProSiebenSat.1
• Studiocanal Buys 100% of Tandem Productions, Rola Bauer Steps Down
• Facebook to buy Giphy for $400 million
• Justice Department, State Attorneys General Likely to Bring Antitrust Lawsuits Against Google
• Walt Disney Co. Plans Another Large Debt Sale To Further Boost Financial Position Amidst COVID-19
• Walt Disney Raises $11 Billion From Bond Sale to Bolster Finances

Internet - platforms

• Waymo raises $750m from T Rowe Price, Perry Creek Capital, Fidelity Management & Research etc
• AWS: order from TC Energy
• Launches Fire HD 8 tablet series (Fire HD 8, Fire HD 8 Plus, Fire HD 8 Kids Edition)
• Facebook settles over PTSD suffering for 11,250 moderators, to pay total $52m
• Facebook helped establish political advocacy group American Edge (non-profit)
• Facebook  Community Standards Enforcement Report
• Facebook ends Instagram Lite app
• Facebook's Libra Ass attracts new backers: Temasek (Singapore), Paradigm, Slow Ventures
• Twitter to label fake news tweets, first with corona virus misinformation
• Twitter acquires CrossInstall (interactive mobile ads, 70 employees)

Netherlands - telecoms & media

• Omzet Eurofiber groeit naar EUR 166 miljoen in 2019
• FOX over Ziggo-onderhandelingen: ACM wil zelfde voorwaarden voor alle providers
• T-Mobile claimt opnieuw status beste mobiele netwerk van Nederland
• T-Mobile Q1: 67.000 postpaid- en 14.000 breedbandklanten erbij, 3,3 procent omzetgroei
• Ziggo to raise prices 200701, average 3.4% (o/w 2.6% for inflation); basic cable rises to 19.95 EUR/mo (from 18.70)
• Online (= M7 = Canal+ = Vivendi) to raise prices 200701 (BB EUR 2; BB+TV EUR 2.50; 3P EUR 5) on inflation, data & content costs

2009 Nobel Prize in Physics celebrates fiber optics

The fiber community can be happy. From Nobel Foundation's press release, on this year's Nobel Prize in Physics:

This year's Nobel Prize in Physics is awarded for two scientific achievements that have helped to shape the foundations of today’s networked societies. They have created many practical innovations for everyday life and provided new tools for scientific exploration. In 1966, Charles K. Kao made a discovery that led to a breakthrough in fiber optics. He carefully calculated how to transmit light over long distances via optical glass fibers. With a fiber of purest glass it would be possible to transmit light signals over 100 kilometers, compared to only 20 meters for the fibers available in the 1960s. Kao's enthusiasm inspired other researchers to share his vision of the future potential of fiber optics. The first ultrapure fiber was successfully fabricated just four years later, in 1970.

Today optical fibers make up the circulatory system that nourishes our communication society. These low-loss glass fibers facilitate global broadband communication such as the Internet. Light flows in thin threads of glass, and it carries almost all of the telephony and data traffic in each and every direction. Text, music, images and video can be transferred around the globe in a split second.

If we were to unravel all of the glass fibers that wind around the globe, we would get a single thread over one billion kilometers long – which is enough to encircle the globe more than 25 000 times – and is increasing by thousands of kilometers every hour.

Optimum Lightpath launches HD Voice

Coffee is a typical commodity, and many people don't mind drinking it just like that (left). Came along Nescafe and Douwe Egberts/Philips, to give the world Nespresso (right) and Senseo. These products are outrageously overpriced, but equally popular.

Imagine what marketing like that could do to plain old voice service.

Optimum Lightpath (the business arm of Cablevision) may be leading the way. It is launching HD voice (over its fiber-to-the-business network; quickly after its interactive patient care service).

REGULATION://Extending fiber deeper into the network challenges LLU

Deutsche Telekom is switching back to ADSL2+, apparently to have wider coverage for IPTV (T-Home). VDSL roll-out is haulted and stays at 10 cities (original target: 50).

Big changes are ahead in the European telecom sector. DT cites regulatory uncertainty for haulting the VDSL deployments.

Upgrades to ADSL2+ left the competitive landscape, based on LLU, unchanged, but VDSL and FTTH have created different environments. I believe Europe will support the survival of 'inter-copper' competition, but now it has to come up with an alternative to LLU. This is a hot topic in Germany, but even more so in the Netherlands, where OPTA has to come up with a fully-fledged alternative to LLU. Watch out for this to happen in Q2. OPTA will host an analyst meeting in The Hague next Friday (Jan 19).

So now operators have a choice:

• ADSL2+, with fiber not extending beyond the exchange. This is the case at BT, which sees no business case for FTTN/FTTC, let alone FTTH. This makes the UK an attractive market for LLU-based competition.
• FTTN + VDSL: KPN, Belgacom, DT (now haulted), TI. This renders LLU-based competition quite uncertain at the moment. Will regulaors find a fully-fledged alternative, and/or will altnets be prepared to step up their investment program to keep track with the incumbent?
• FTTH: FT (at least partly, further decisions in 2008). FT is responding to both Iliad and neuf cegetel (and Verizon), by making the network future-proof.
• A mixture of all: Most notably at Swisscom and Telefonica, but I suppose in many other countries too. FTTH is probably pretty common now for new builds.