BT announces Super App from EE

Main points

• Branding:
• EE flagship brand for B2C FMC & mobile
• BT for fixed-only & business
• Plusnet for no-frills B2C fixed
• Plans brand refresh 231020 (4 areas: areas: game, home, learn, work)To rebrand BT TV as EE TV service, with new STB (EE TV Box Pro) & EE TV app & remote control for Apple TV 4K
• Loyalty: extra savings for adding SIMs

• Super App:
• Launches everything app online marketplace (also for non-subs), app & website, based on EE ID (ID-as-a-Service)
• Products & Services:
• device sales (buy, trade-in; incl Consumer Electronics Shop (laptops, cameras smart TVs)
• gaming (with Microsoft)
• home security, insurance
• subscription services (with Apple, NOW, Sky, TNT)
• to add more partners, to add smart home (smart fridges, kettles, coffee machines) 2024
• Broadband:
• Launches home BB prioritisation for gaming or work, based on WiFi Enhancer from Netduma (exclusive), with EE Smart Hub Plus router
• Raises max FTTH speed to 1.6 Gb/s

Conclusions:

• Mirrors Super Apps from e&, Du, Proximus (Proximus+).
• The Super App mirrors the Super Aggregator in fixed (for access to SVOD and TVOD services). In fact, reselling energy can also be included and the concepts could be merged into a single platform, providing access to content, services and products for fixed & mobile. Looks like EE's way forward.
• Based in telco trustworthiness (EE ID) and billing machine, as well as one-stop shop and ease.
• Entering a 'saturated' market: people already take these services from elsewhere.

KPN Capital Markets Day, 7 November 2023: preview

KPN is organizing a Capital Markets Day on November 7. We expect the board to unveil plans for the period up to and including 2026 and to provide a glimpse into the years to come, possibly up to 2030. The fiber optic renovation is nearing completion, which will have a major positive impact on the financials. However, the network is never finished and further evolution is on its way. Partnerships will be central to this. In the meantime, competition is and remains the greatest risk.

Competition in mobile consists of the other two mobile operators and possibly entrants in Private Wireless. In fixed, fiber optic brings new players to the market. Consolidation is obvious, but there are different scenarios. In services, OTT still drives cord cutting, mostly or communications, but or TV/video as well.

Partnerships are likely to be central in areas where KPN is too small or lacks knowledge to develop solutions itself: ultra-rural coverage, cybersecurity, venture capital and developing a network-as-a-service platform. Where KPN lacks scale, such as in ICT customization (tailored solutions and serving verticals such as healthcare and transport), acquisitions are an obvious solution.

KPN's previous Capital Market Days focused on growth and simplification:

• May 2011: Strengthen - simplify – grow
• February 2014: Building on strong fundamentals
• March 2016: Raising the bar
• November 2018: Organic sustainable growth
• November 2020: Accelerate to grow
• November 2023: Building for the future???
  

General strategy

• Netwerk evolution:
  
• Fixed: FTTP and a partnership (e.g. Starlink) to cover the remaining ~30k ultra rural addresses.
  
• Mobile: 5G/3.5 GHz plans, following the 2024 auction, will mostly be about upgrading the 5G network's capacity. Ultra-low latency may form the basis for new services, e.g. in IoT.
• A jump on the AI bandwagon could look quite differently, if SKT is followed, or rather Iliad.
• New tech such as digital twins and virtualisation will serve network control and maintenance, help enable zero-touch and cloud-native networks.
  
• Network are increasingly seen as platforms-of-platforms (or: network-as-a-platform), for traditional (telephony, television) and new (IoT, etc.) services. Network API's are coming to market to allow developers and enterprises to take advantage of network and subscriber data, see e.g. TIM, DT/Ericsson, Nokia/Dish and BT/Google Cloud.
• Services:
• In fixed, most telcos have embraced the Super Aggregator status for access to and billing of media services (streaming video, music, other). In mobile, it's still early days. Proximus is trying to translate the Super Aggregator to a Super App strategy, for all 'daily services' (Proximus+).
• Some telcos are modestly in the business of developing apps themselves (Proximus, Orange, Verizon). The entry-barrier is low, but it remains a challenge to compete with Big Tech and specialised developers. Maintenance is complicated for a roster of apps (for a range of operating systems) that need to be updated regularly.
  
• Cybersecurity and quantum computing are very important areas and could involve partnering with other telcos. After all, it makes no sense for each telco to develop these solutions on their own.
• Branding could use a little more clarity, now that a single-brand strategy has been abandoned, with current brands KPN, Youfone (takeover pending), Solcon, Simyo, XS4ALL (no longer for new subscribers), Cam IT Solutions, Inspark.
• What is so hard devising a proper loyalty program?
• Financial targets:
  
• KPN's fiber renovation is finally nearing completion. Taking around 30 years in all, it must be regarded a once-in-a-century operation. Benefits will need to be updated, in terms of opex (maintenance, energy, support), revenues (ARPU, customer wins) and capex. When the fiber program was relaunched (Capital Markets Day 2018), KPN said it aimed for 80 percent coverage, which excluded the coverage at the time by third parties (mainly Delta Fiber and other cablecos). With KPN increasingly overbuilding competing fiber operators (such as in Oss), the 20% figure will drop to a lower level.
• The fiber impact will be positive for revenues, margins and free cash flow, exacerbated by sunsetting more legacy systems (copper, 2G, 3G, PSTN, ISDN, etc.). Capex will likely drop below EUR 1b per annum (currently EUR 1.26b), net free cash flow (after interest and tax) may rise above EUR 1b per annum (currently EUR 860m). Still, the impact of higher interest rates on the interest bill is not to be overlooked.

Threats and opportunities:

• New entrants
• Mobile: the 2024 3.5 GHz auction will set aside 100 MHz for Private Wireless. Citymesh is a likely candidate to enter the market.
• Fixed:
• Wholesale-only operators (neutral hosts) of the active layer in fiber networks have already entered (Fiber Crew/Jonaz, Fiber Operator, Weserve).
• Delta and ODF could team up to build the Third Digital Infrastucture. This would put pressure on occupancy rates, but with fierce competition price increases would be unlikely. Ultimately, a shake-out would follow.
• Alternatively, Delta and ODF could acquire Ziggo's HFC-network to construct a Second National Fiber Operator. In this scenario, VodafoneZiggo's retail operations would be combined with its mobile network, mirroring Odido (formerly TMNL).
• FWA is increasingly likely to compete with FTTH, especially in ultra rural areas and in places where KPN deploys PON technology (no physical unbundling and instead high wholesale tariffs). Odido would be very well positioned.
• Disintermediation:
• Communications (Meta, Microsoft) and content (Netflix, Amazon, Disney, WBD, etc.) have already largely gone OTT.
• Hyperscalers have claimed large sections of the cloud market.
• Smart TV manufacturers offer an alternative TV-platform.
• There's always the risk of NOT doing something. New opportunities that must not be missed may include the Super App (Proximus+), speed-based pricing in mobile or FWA.
• Outsourcing carries the risk of losing indepth network knowledge and capabilities. Perhaps KPN needs to clarify where it stands.
• Selling real estate, even if this is not core business, is not wise. It exposes the company to hefty annual price increase and gives it a fake sense of independence. Migrating to a different real estate owner may be possible in theory, but the lock-in is such that this is near impossible. Selling real estate only makes sense in case of an immediate need for cash.
• Structural separation is meant to create two businesses that can each improve their growth profiles. It can be implemented in two different ways: NetCo/wholesale versus ServCo/retail, or Fixed/wholesale versus Mobile/retail. The latter is becoming harder for KPN, now that it is integrating fixed and mobile at the core network level.
• APG could, from a value point of view, swap its 50% Glaspoort stake for roughly a 10% stake in the entire fixed-line network. Who knows, what could happen from there.
• Areas where KPN lacks scale or capabilities:
• ICT (Tailored Solutions).
• Verticals: health (KPN Health), possibly transportation.
• KPN Ventures: its portfolio is of limited size. Theoretically it would be better to participate in a larger and similar investment portfolio, such as DTCP.
• Cybersecurity is of the utmost importance and it doesn't seem to make sense for every telco to develop a cybersecurity unit on its own. Perhaps a partnership would be preferable.
• Takeover
• An LBO can be ruled out, theoretically resulting in a share price discount. It was tried by EQT and KKR, but it only led to KPN creating the option to issue preference shares with high voting power, combined with government oversight.
  
• Only a friendly takeover will be realistic.

A scenario for the Dutch boadband market, leading up to the inevitable end-game of two fiber networks

There's a fascinating development unfolding in the Dutch broadband market, characterized by a surplus of fiber infrastructure in the access networks. This situation envisions a strategic collaboration between fiber operators Delta Fiber and Open Dutch Fiber, alongside the HFC-network of VodafoneZiggo.

This proposed scenario serves multiple purposes:

1. It presents an exit opportunity for current investors, contingent upon the interest of potential new investors in this venture.
2. It aligns with the economic dynamics of the market by consolidating the number of high-speed broadband networks to just two.
3. A potential split-up of VodafoneZiggo could offer a means to alleviate its debt burden.
4. With reduced competition, the new owner(s) would be well-positioned to gradually upgrade the Ziggo HFC network to a full-fiber infrastructure over the next few years. During this transition period, VodafoneZiggo Retail (the ServCo, including the mobile network) could offer services not only over the Ziggo HFC network but also through the fiber networks of Delta and ODF.

There are potentially four networks in the Netherlands, one from VodafoneZiggo (HFC/Docsis) and the other fiber-based from KPN (4.2m lines, aiming for 6.5m), Delta Fiber (EQT/Stonepeak, 1.5m lines, aiming for 2m) and Open Dutch Fiber (KKR/DTCP, 900k lines, aiming for 2m).

Underlying dynamics:

• VodafoneZiggo is overleveraged, plans a Docsis 4.0 upgrade in due course.
• KPN will ultimately be nationwide, although rural areas remain uncertain because overbuidl is less likely. The latest overbuild plan is for Oss, where E-Fiber (Open Dutch Fiber) already finished.
• Delta Fiber's view is a hybrid market structure with reciprocal wholesale access deals (network sharing). It avoids overbuilding KPN or Open Dutch Fiber. Castricum was cancelled, since E-Fiber (Open Dutch Fiber) had a network already. It started off in white and grey areas (no Ziggo), but increasingly ventures into Ziggo-territory, where also a KPN overbuild is looming.
• Open Dutch Fiber started off in the largest cities but now does any project with sufficient scale (the latest containing just 4k premises). It avoids overbuilding KPN or Delta.

Concluding:

• Geographic fits still exist between KPN and ODF and between Ziggo and Delta.
• With each new overbuild by KPN, the value for KPN of Delta Fiber or Open Dutch Fiber decreases. If KKR/DTCP want to sell ODF to KPN, they better be quick, because KPN will not be willing to pay for any network doubling (such as Oss). This puts the negotiation powers clearly in the hands of KPN.
• If overbuild goes out of control and a sale to KPN is unsuccessful, then Delta Fiber and Open Dutch Fiber may want to hook up to create a Third Digital Infrastructure. Three national networks, however, is a challenge: low occupancy and low returns, with any of two outcomes: price increases (unlikely, if clearly necessary, in a competitive market) or a shake-out (consolidation).
• Delta/ODF could make an offer for the VodafoneZiggo cable network. This would reduce competition to basically two infrastrcutures, but being open networks. Delta has ample experience in upgrading HFC to FTTP. At the same time, a VodafoneZiggo carve-up may be the only scenario for its parents (Liberty Global, Vodafone Group) to somehow make the debt load more manageable.
• VodafoneZiggo would be split according to examples in the UK (Openrach vs. BT Retail/EE), Italy (NetCo vs. ServCo/mobile) and New Zealand (Chorus vs. Spark), where a split is made between fixed (inlc. wholesale) and mobile (incl. retail and mobile wholesale), rather than between networks and services, as is the case in Denmark (TDC NET vs. Nuuday).
• Finally: in a market that is de facto deregulated, ACM's main powers are in competition law. That may stand in the way of any deal. However, one has to acknowledge that, with a dual legacy of copper and coax, a single network (natural monopoly) is not an option for the Dutch market. Having two full fiber networks would be a luxury.

Amazon Fall Devices Event 2023: Alexa, Echo, eero, Fire TV, Blink, Ring

• All devices contain Alexa, carry Climate Pledge Friendly badge;
• Expands Alexa capabilities
• with conversational GAI (LLM)
• adds Amazon Alexa Emergency Assist (6 $/mo or 60 $/yr)
• adds Alexa Eye Gaze (for control)
• to add Character.ai (chat with famous people)
• plans to add Smart lighting to Echo smart speakers
• expands Fire TV with GAI for voice search
• launches Map View: digital map home floor plan with connected devices pinned to it
• Launches Echo devices
• new Echo Show 8 (smart speaker; $150; incl Echo Show 8 Photos Edition, $160, with PhotosPlus subscription (2 $/mo); with stand, $35)
• Echo Hub (control panel for smart home, 8-inch, wall-mountable, $180; decorative frame $20, counter stand $30)
• new Echo Frames (smart glasses with audio, 7 styles, $270; incl Carrera Smart Glasses, $390)
• Launches eero Max 7 (router, WiFi 7 mesh system, supports 2.4, 5 and 6 GHz bands; wired max 9.4 Gb/s, wireless max 4.3 Gb/s; $600 for 1-pack, $1150 for 2-pack, $1700 for 3-pack)
  
• Launches new Fire TV devices
• Fire TV Stick 4K Max (with Fire TV Ambient Experience (transforms TV into always-smart display, $60), WiFi 6E, 16 GB storage)
• new (gen 2) Fire TV Stick 4K ($50)
• Fire TV Soundbar ($120);
• Launches Blink devices & features
• Blink Outdoor 4 Floodlight Camera (LED floodlight camera, $160)
• Blink Sync Module Pro (extends range)
• Blink Outdoor 4 Battery Extension Pack (extends battery llfe);
• Launches Ring Stick Up Cam Pro (indoor/outdoor camera that offers an aerial view, with radar);
• Launches kids devices
• Echo Pop Kids (smart speaker)
• Fire HD 10 Kids (tablet for 3-7 year-olds, $190)
• Fire HD Kids Pro (tablet for 6-12 year-olds, $190)

A perfect storm is building for VodafoneZiggo - can management steer the company into calmer waters?

VodafoneZiggo is feeling the impact of high inflation and rising interest rates. It is safe to say that the company is over-leveraged, but does this mean that the company is at risk? Too much debt led to rescue operations in many previous occasions, including at KPN (twice!). When a perfect storm happens, even bankruptcy cannot be ruled out, as we have witnessed some 20 year+ years ago at UPC. Since Liberty Global and the Vodafone Group each hold 50% of the shares, it seems a far-fetched scenario for VodafoneZiggo (unless some financial engineering is developed and tax reasons come into play). For now however, the company will depend on autonomous growth to ease the pressure of its balance sheet.

Let's first look at what is happening under the hood:

• The dividend will be roughly halved to around EUR 250 million over 2023E, as opex, tax and interest are rising dramatically. More potential costs are on the horizon and could wipe out the remainder of the dividend: sports rights (Eredivisie, UEFA), mobile (3.5 GHz band auction, network densification) and fixed (a very expensive Docsis 4.0 upgrade). At the same time, competitor KPN is looking to raise its pay-out to over EUR 1 billion annually (TBA at the Capital Market Days towards the end of the year).
• Leverage is up and the cash position is at a historic low of just EUR 21 million (!) at 23Q1 - while no dividend was paid in the quarter. Interest cover is just 0.33. Operating free cash flow on a trailing twelve month basis is coming down from a peak of EUR 1.13 billion in 21Q1 to EUR 890 milllion in 23Q1. Net free cash flow (after interest and tax) is currently just EUR 140 million over twelve months, from a peak of EUR 650 million in 19Q1. There goes the source for paying out a dividend!
• Liberty Global's CFO Charlie Bracken openly admits that VodafoneZiggo is over-leveraged. Net debt over trailing EBITDA currently stands at around 6.8x. He also recently halved his stock holdings in Liberty Global. This could be part of pre-existing plans but the timing is awkward, to say the least.

Here are some options and strengths the company has, but none of them is a walk in the park:

• VodafoneZiggo rolled out gigabit broadband across its footprint and leads the broadband and fixed-line markets, but T-Mobile and Delta Fiber are starting to make inroads.
• Price increases are taking effect, lastly 8.5% in fixed as of July 1st. However, it remains to be seen if this can drive overall revenue growth above 2%.
• Shareholder pay-outs since incorporation (2017) total EUR 7 billion (this includes dividends and joint venture fees, but not interest on parent loans which totals around EUR 100 million per year). As stated above, the dividend pay-out is being reduced dramatically.
• KPN could acquire Open Dutch Fiber, to ease the tension on the broadband market. VodafoneZiggo would welcome this but the regulator will open an antitrust investigation and may block such a move.
• There is really just one big asset available for sale: the mobile tower sites. This could reduce debt by possibly up to EUR 1.5 billion. However, it will raise the opex and lower the EBITDA margin.

Furthermore, interest rates, inflation and other problems have led credit ratings institutes to lower the ratings and/or outlook for Sunrise, Tele Columbus, Altice France and others.

All this limits VodafoneZiggo's room to maneuver and make investments. Sure, the current dividend provides a buffer that can be eaten up, but:

• Additional investments (content, mobile, fixed) are increasingly difficult to finance.
• An IPO looks very difficult. The current enterprise value (equity value + net debt) equals the (adjusted) net debt, at most - based on a multiples comparison with KPN.
• Acquiring Delta Fiber (which could carry an enterprise value of EUR 3 billion, according to a back-of-the-envelop calculation) seems hard. A transaction in stock seems out of the question, assuming the equity carries no value (see bullet above).

All in all, VodafoneZiggo is still a very cash-generative company, with strong positions in broadband and postpaid mobile. The problem is the cash-out, due to rising opex, tax and interest costs. Charlie Bracken stated that the group is "laying the foundations for future growth" for VodafoneZiggo. Given the above, this is hard to see happening in the current competitive and low-growth market, but it cannot be ruled out and may steer the company into calmer waters. Maximising sales while minimising costs is the simple recipe. Elements in this strategy that are missing so far are entering the fixed-line wholesale market (allowing the hollandsnieuwe brand to enter the fixed-line market would test the waters) and launching a cost reduction program.

Netflix 23Q1

Netflix 23Q1 results:

• current AVOD tier ARM (subscr + ads) > Standard tier ARM, to expand features of AVOD tier (currently in 12 countries): 1080p, 2 streams (first in Canada, Spain)
• to expand paid-sharing to US etc 23Q2 (delayed from late Q1), to block devices attempting access without properly paying (already in Chile, Costa Rica, Peru and Canada, New Zealand, Portugal, Spain)
• to close DVD-by-Mail 230929 (last day of shipping)
• forecast 23Q2: paid net adds simialr to 23Q1, slight increase for forex-neutral ARM, rev $8.242b (+3.4%), oper inc $1.565b (margin 19.0%), net inc $1.283b (EPS $2.84)
• targets 2023: rev growth to accelerate in H2, oper margin 18-20%, FCF $3.5b (raised from 3.0b on lower content spend), cash content to content amortization ratio closer to 1.0x, SBB to accelerate
• target 2024: content spend $17b
• long-term financial objectives unchanged: sustain double digit revenue growth, expand operating margin, deliver growing positive free cash flow, gross debt range $10-15b, maintain minimum cash equivalent to roughly 2 months of revenue

Warner Bros Discovery announces Max, merged HBO Max / discovery+ SVOD service

Plans to launch Max SVOD service:

• merged HBO Max & discovery+: HBO Originals, Warner Bros films, Max Originals, DC universe, Wizarding World of Harry Potter, kids content, factual (food, home, reality, lifestyle, docus from HGTV, Food Network, Discovery Channel, TLC, ID etc)
• "unmatched in the breadth, reach, and excellence", "one seamless user experience that invites every member of the family"
• 230523 in US, autumn 2023 in Latam, early 2024 in Europe, mid 2024 in APAC, new markets autumn 2024
• 3 tiers:
• Max Ad-Lite (10 $/mo or 100 $/yr; 2 streams, no downloads, 1080p, 5.1 sound)
• Max Ad Free (16 $/mo or 150 $/yr; same but max 30 downloads, no more 4K UHD)
• Max Ultimate Ad Free (20 $/mo or 200 $/yr; 4 streams, max 100 downloads, 4K UHD, Dolby Atmos)
• current HBO Max subs keep same price, profiles automatically transferred, features (e.g. 4K, number of streams) to continue for 6 months after launch
• discovery+ remains available stand-alone (incl some exclusive content), price unchanged (5 or 7 $/mo)
• improved features: Premium Video Playback (cinematic), Personalization, More Prominent Kids Experience, Simplified Navigation
• 4 key objectives: to drive more engagement, to enhance subscriber retention & reduce churn, to improve performance; to optimized monetization
• content:
• to add >40 new titles/seasons per month
• orders series The Conjuring (movie spin-off), orders series A Knight of the Seven Kingdoms: The Hedge Knight (prequel to Game of Thrones), orders new spin-off series to Big Bang Theory; orders Harry Potter series (remake, decade-long)
• launches campaign (tagline “The One to Watch”)
• currently 50% of churn is involuntary (e.g. credit card expiration)
• currently 7% of D2C subs have both HBO Max & discovery+

Comments:

• Main points already leaked (name, pricing, content strategy); start-up losses will continue for some time; 2023 was to be the year of 'relaunching and building'
• Aims to match Netflix, Disney+, Prime Video in terms of breadth; focuses on families; something for everyone at any time, any mood; leaves competitors (Paramount+, Peacock, Lionsgate, MGM) ever more behind
• Dropping the iconic HBO brand is dubious (esp. in the US); also: focus on remakes, prequels, sequels and spin-offs foregos creativity and may not attract new subs (but it is good for the brand, carries low risk and allows additional monetisation through experiences at theme parks, such as new Harry Potter park in Abu Dhabi); adding discovery+ content is nice but may not attract new subs; the movie library grows at a slow pace (no direct-to-streaming titles), just 12 theatrical releases in 2023
• Maintains pricing of HBO Max tiers but adds a superior tier at the high end; positive for ARPU; 4K no longer available for 16 USD/mo tier
• Other:
• FAST service yet to come; to keep live sports mainly on linear (in US), on Eurosport (Europe), Olympics deal with EBU
• no more day & date, 12 theatrical releases in 2023
• multiple new Lord of the Rings films
• may sell RSNs, music rights (soundtracks) but no bidders
• Moody's maintains Baa3 (lowest investment grade) on expected leverage decline to 4.25x YE 2024 (currently 5.0x)

Dutch 3.5 GHz band auction - main specs

The ministry launched its draft auction plan and consultation (until 11 May). Licenses valid from Dec. 1, so the auction is planned sometime between these dates.

The main specs:

• Two phases, phase 1a (60 MHz licenses) simple multiple-round clock-auction with exit bids, phase 1b (10 Mhz licenses) same, phase 2 assignment (combinatory second price closed bid single round
• Total reserve price EUR 176.1-257.1m (depending on number of 10 MHz licenses) + dues for assignment round; 3 licenses for 60 MHz each (reserve price EUR 40.7m), 12 (max 30) licenses for 10 MHz each (reserve price EUR 4.5m)
• Valid until 401231 (17 yr + 1 mo from start at 231201)
• Coverage obligations (from date of Inmarsat's vacation), 60 MHz licenses: 324 km^2 after 2 yr, 3216 km^2 after 5 yr, 10 MHz licenses: 54 km^2 after 2 yr, 536 km^2 after 5 yr
• Caps: 40% ot total spectrum in all bands; 120 Mhz in 3.5 GHz band (50 MHz for bidders in round 1b only).

Orange: new strategic plan 'Lead the future' for 2023-2025

Orange results 2022 & new strategic plan.

• 22Q4:
• Scale Up cost savings plan reaches EUR 700m cumulative indirect cost savings since 2019 (excl inflation EUR 1b)
• Guidance 2023: EBITDA AL slight growth, ecapex strong decrease (15% of rev from 18% in 2022), organic CF (telecom) >= EUR 3.5b, leverage AL mid-term ~2x, dividend 72c
• Launches new strategic plan Lead the Future:
• 4 Pillars
1. Generate value from core (FTTH, Data, AI, 5G, 4G Home, satellite in FR (with Eutelsat), merger Spain with MasMovil [Belgium with VOO]; to raise ARPO)
2. Capitalise on infra (to add 5m fiber lines in Europe, 2m in MEA; RAN sharing; raise 3rd-party operator hosting rate from 1.37 to 1.5 by 2026 for TOTEM pylons; to decommission copper in FR and 2G/3G in Europe by 2030; to expand 4G & 5G in Africa; increase use of Data & AI; Network Integration Factories for automation & virtualisation)
3. Transform OBS (accelerate growth in Enterprise, stgrengthen position in cybersecurity, OBS to rename as Orange Business, to be leader in next-gen connectivity solutions, plans far-reaching program of cost optimization to return to EBITDA AL growth by 2025 at the latest, Orange Cyberdefence rev 2025 EUR 1.3b)
4. Growth in MEA (2020-2025 rev CAGR 7%, increased profitability; Orange Money (2022: 29m active users, EUR 100b in transactions) to expand beyond transfers & payments, also to non-subs)
• 3 Guiding principles: performance, excellence, trust
• ESG:
• CO2 emissions -30% (scope 1, 2) by 2025 from 2015, -45% (scope 1, 2, 3) by 2030 from 2020, net zero carbon by 2040
• Recycling to 30% by 2025 (currently 23.1%)
• Business model transformation: simpler, faster, more efficient, agility, simplification of processes
• Extends Scale Up cost savings program by additional EUR 600m by 2025 (on base of EUR 11.8b)
• Targets 2025: EBITDA AL CAGR LSD, increased capex discipline, organic CF EUR 4b in 2025, leverage AL mid-term 2x, ROCE 2025 up from 2022 (to grow by 100-150 bp by 2025), dividend 75c over 2024

EC proposals on broadband development under SIngle Market

EC speech (230206, Helsinki)

• 6G: Launches R&D project Smart Networks and Services Joint Undertaking (to lead the conception & standardisation of 6G)
• Broadband:
• Access regulation:
• plans Broadband Cost Reduction Directive Feb 2023
• plans Gigabit Recommendation (guidance for NRAs on how to use tools at their disposal to incentivise faster network deployment)
• Operating models: proposes morphing telcos from connectivity providers to infrastructure-as-a-service providers
• Fair share contribution (Internet Traffic Tax): plans consultation on "the future of connectivity and infrastructure": what is the infrastructure that Europe needs and how to timely mobilise investments? "raises the question of who pays for the next generation of connectivity infrastructure" (European Declaration on Digital Rights and Principles for the Digital Decade already established that all market players benefiting from the digital transformation should make a fair & proportionate contribution to public goods, services & infrastructure)
• Harmonisation, consolidation: how we can build a true Single Market for telecoms (curently based on business models based on national markets & high costs for national spectrum licenses), requires reflection on encouraging cross-border consolidation