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Claire Enders
Enders Analysis provides a regular research service to subscribers on the media, entertainment, mobile and fixed telecommunications industries in Europe, with a special focus on the reaction to new technologies and media. We cover all sides of the market, from consumers and leading companies (e.g. Vodafone, ITV, BT, BSkyB, NTL and others), to regulation. A full list of our research can be found here.

Our research is independent, impartial and forward-looking. Our goal is to support investment decisions in our coverage sectors with rigorous analysis and intelligent and informed insight. We do not carry FSA registration so our research is not influenced by stock market considerations.

Subscribers to our research include major financial institutions across the world, government departments and regulators, as well as leading companies in our coverage areas.

We charge an annual subscription for our research; fund managers can use commission accounts at major brokerages. The subscription entitles clients to receive our research and access the archive. The subscriber receives emails and reports on a regular basis, and quick response to enquiries on our research.

Many of our clients supplement their subscriptions by receiving our presentations on key strategic issues of topical interest. We also carry out occasional ad hoc projects for our subscribers.

Details of the team at Enders Analysis and our associates can be found here.

All queries on our services should be addressed to Sophy Thorpe at sophy.thorpe@endersanalysis.com  

Recent Publications
All research is listed here immediately on release.
 
UK Internet Trends [2009-076]

Driven by growing broadband connectivity, the internet continues to gain share of media consumption and advertising at the expense of traditional media, hit by the double whammy of substitution to online and deepening recession. In the near-term, the recession will be the dominant factor across many business sectors. The enclosed presentation highlights key online trends in the UK and our current forecasts for internet advertising in 2009 and 2010.

More ...    02 Jul 2009
 
Ofcom pay-TV consultation: end of round three [2009-075e]

There is a reasonable chance that, by the middle of 2010, Ofcom will introduce regulations concerning the availability and pricing of wholesale premium movie and sports content, as outlined in its third pay-TV consultation released on 26th June 2009

The Ofcom wholesale remedy proposals are likely to provide rival retailers to Sky with modest benefits in new customer acquisition and customer retention in the first three years, whilst opening up the prospect of wider competition as the broadband infrastructure develops

The complexity of the wholesale pricing issues being addressed by Ofcom may yet stand in the way of achieving an effective “must offer” wholesale remedy

More ...    30 Jun 2009
 
OFT approach to local and regional newspaper mergers [2009-074e]

To coincide with the Digital Britain Report, the Office of Fair Trading (OFT) released its report on local media merger rules, confirming their application to newspaper consolidation although, perhaps significantly, it will ask Ofcom for “views... arising from its understanding of media markets”

Costs of compliance with the merger regime will remain a very significant barrier to consolidation of newspapers, especially for local newspaper titles serving small catchment areas, and we anticipate no appetite for engaging with the OFT

If local newspapers cannot consolidate further in the near future, the recession and ongoing structural shift to the internet will force title closures and job losses and also weaken local economies. The supply of local media to communities will be impaired to the detriment of democracy and plurality

More ...    19 Jun 2009
 
UK broadband and telephony market Q1 2009 [2009-072]

UK broadband market growth continues to slow, with net additions more than halving year-on-year to 284,300 and annualised market growth in single figures

Carphone Warehouse (TalkTalk Group) is in the final stages of acquiring Tiscali to become the UK’s largest residential ISP by subscriber volume

BSkyB is now selling more telephony and line rental than broadband

BT Retail is using aggressive retention offers to boost its share of market net adds, but at the expense of revenue growth. It has launched broadband based on ADSL2+ at existing price points

More ...    18 Jun 2009
 
Digital Britain Report: anti-piracy measures [2009-073e]

Digital Britain Report’s “Universal Service Commitment” will make high speed broadband ubiquitously available, thus potentially boosting the adoption of illegal file-sharing by UK internet users. However, the government’s goal is to achieve a 70-80% reduction of illegal file-sharing activity

In the continuing absence of voluntary cooperation between ISPs and rights holders, yet another consultation is being launched, but this time, the pressure on ISPs is being increased by the proposal to give Ofcom powers to reduce unlawful file-sharing, including “technical measures” (e.g. traffic shaping) if needed

With another lengthy consultation process ahead, and then a legislative phase, it is too early to judge the commercial implications on the ISPs or whether the creative industries will claw back sales from reduced unlawful file-sharing

More ...    18 Jun 2009
 
 
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Executive Summaries
Executive Summaries are made available for download six months after publication.
 
Setanta: sink, float or swim? [2009-062e]

Against current annual losses in the order of £100 million, Setanta has the whole of June in which to attract the necessary investment that will allow it to continue. The alternative is closure

As complementary supplier of premium sports channels to Sky, Setanta has been more vulnerable to recessionary pressures, but it is not in the interest of any of its existing competitors/business associates for it to cease operations

There is a chance of survival, but it requires swapping the current retail/wholesale model for a wholesale only model as a start, with the possibility of further reductions in the costs of its sports rights

More ...    29 May 2009
 
OFT recommendations and CRR - little comfort for ITV [2009-063e]

The OFT has delivered its verdict on ITV’s request for a review and modification of the CRR remedy that the Competition Commission imposed as a condition of the Carlton/Granada merger in 2003

In delivering its verdict, the OFT has chosen to sit on the fence. After recognising both the merits of the ITV case and the continuing concerns of the advertising community it reiterated earlier recommendations for minor changes in keeping with the times, but otherwise left it to the CC to decide what changes to make

The complexity of the CRR remedy and the polarised views of parties involved, as well as the burden of decision-making transferred to the CC, merely confirm the view that any significant modification to CRR will be a long time in coming, and almost certainly long after the start of the 2010 trading season, as previously suggested by ITV

More ...    29 May 2009
 
Will consumers pay for online news? [2009-061e]

Newspaper publishers are about to enter a series of ‘online payment’ trials to help bolster disappointing online advertising performance that alone will be unable to support full scale newsrooms

Publishers are on the back foot, however: they have been giving away their content for free for almost a decade, and their core content does not have the unequivocal unique attributes of a football match, a movie or a pop song

While there are a variety of options for management to explore, in aggregate they will never match the print model, and so news is destined to shrink as a commercial enterprise for newspaper publishers

More ...    27 May 2009
 
Cable & Wireless full year results to March 2009: strong cost control [2009-060e]

The UK and international businesses (now ‘Worldwide’ and ‘CWI’) are both continuing to perform well, despite weak revenue growth, thanks to strong cost control. Worldwide is now generating cash organically for the first time in memory

Performance at the newly-acquired Thus has been slightly below expectations, mostly due to increased customer churn. The sale of the ‘mid-market’ part of the business is a possibility

The market was disappointed by guidance for the new financial year. In our view it is both acceptable and achievable

More ...    22 May 2009
 
Vodafone 2008/09 full year results: economy and competition start to hurt [2009-059e]

Vodafone’s European revenue growth dipped sharply in the March 2009 quarter to -3.3% from -1.4% in the previous quarter, due to a combination of recessionary impact and continuing underperformance of the market

EBITDA margins also declined by 2ppts, with falling handset subsidies more than compensated for by a sharp rise in general operating expenses, despite cost cutting efforts

Implied guidance for Vodafone Europe in 2009/10 of an organic 4-5% drop in revenue and 2ppt dip in EBITDA margin is bleak but realistic, with even these figures at risk if either the economy does not start to recover or the company cannot keep general operating expenses flat

More ...    21 May 2009
 
 
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News
 
The Financial Times

Breaking news of a radical reform of its business model (Setanta considers wholesale switch), the Financial Times suggested that the sports broadcaster would consider ditching its retail customers in order to reduce annual losses of £100m.

It would instead become a wholesale supplier of programmes, including Premier League football, to broadcasters such as British Sky Broadcasting and BT Vision, reported the FT.

Quoting from a note on Setanta’s cash crisis written by Claire Enders and Toby Syfret, the FT endorsed their view that the participation of BSkyB would be a key to the success of a scheme, “the one escape route from Setanta’s predicament”.

Allowing BSkyB to sell to customers on Setanta’s behalf would bring the benefit of Sky’s broader subscriber base and more than halve its current annual operating expenses to about £55m. As the FT pointed out: "Setanta, with 1.2m subscribers, is still far from reaching a break-even point that Ms Enders estimates at 1.9m."

Summarising their views on Setanta, Claire Enders and Toby Syfret added:  “The sum total of £125m in annual cost savings by 2011 comfortably exceeds the current estimated annual operating loss of £90m in Setanta’s UK operation. On balance, we believe that the switch to a wholesale-only model leaves Setanta with a fighting chance, and it is vital it happens quickly.”

02 Jun 2009
 
Variety

Following implementation in January of the French government's ban on prime time advertising (TV ad ban creates no windfall for webs), Variety suggested that analysts had originally predicted that the dominant commercial channels, TF1 and M6, would receive a windfall: "Sarkozy's critics argued the real aim of the scheme was to benefit his private sector friends. But things turned out differently."

Variety reported that TF1 recorded a 27% drop in first quarter advertising revenue compared to the same period last year, to $442 million. With audience levels "satisfactory," the company blamed the plunge on the deteriorating advertising market, strong downward pressure on prices, and the compensation tax. M6 reported an 11% fall in advertising revenue to $202 million in the first quarter, blaming the drop on low volumes.

François Godard was asked for his view. He said: "We're in some sort of negative feedback loop... There's less inventory on sale, and the prices are collapsing, whereas you would expect lower inventory to sustain prices." He added: "Indications are that (DTT) net revenues have increased, but we don't know for sure the exact balance of the market... There is still some fog around exactly what has happened."

22 May 2009
 
Mobile Power
Singling out James Barford's contribution as a Mobile Telecoms Analyst (50 Most Influential People in the UK Mobile Industry), Mobile Power comments:

Operators are bombarded with reports and briefings, but the Enders Analysis reports are regarded most seriously by UK senior bosses. Barford heads up Enders' commentaries on the operators and manufacturers. "His assessments on the direction of the sector are very astute and taken seriously", says one senior executive. He manages to keep a deep insight in both the manufacturers and operators to take a broader view of the industry.

 

21 May 2009
 
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