BT is buying TalkTalk as a buyer of last resort, given the chaos that would ensue with a disorderly shut down, and will face a regulatory clearance process that reflects this.

The acquisition will cost BT c.£400 million this financial year, and will be hard to
manage given the ongoing subscriber decline, with limited longer-term upside.
Damage limitation appears to be the main driver.

There is a limited impact on the rest of the market, with some opportunity to pick up
business, limited risk for CityFibre despite it supplying TalkTalk, but less choice for
some types of smaller broadband competitors.

The CMA has provisionally blocked the VMO2/nexfibre-Netomnia transaction, primarily because of the network overlap, and it is hard to see a path to approval from here.

CityFibre is back in the driving seat to consolidate the altnets, with the pressure now on the retail altnets to secure deals earlier rather than later.

There are substantial silver linings for VMO2/nexfibre in the deal being refused, it is positive for Sky/VodafoneThree/TalkTalk in our view, and more neutral for BT/Openreach given the pluses and minuses.

Meta Connect showcased the company’s determination and ambition to compete simultaneously across multiple fiercely contested technology spaces, with Apple’s wearable products and services a primary target.

In attempting to both capture developer mindshare and change consumer perceptions of AI and wearables, Meta buried new and interesting AI developer frameworks and agentic experiences behind cartoon AI agents and a Tamagotchi-like device.

Smart glasses category expansion, and a radical VR glasses reveal, were tightly bound to AI as the missing component to assist app and service development, driving improved experiences for consumers. Meta’s hardware strategy remains US-centric with very slow international rollout for flagship devices.

The government is considering an update to the definition of public service media, to ensure its provision across a converging, over-populated online media ecosystem.

This opens up difficult questions about how we should define and incentivise quality content, and content that serves the public good—as well as defining success in carrying out public service obligations.

These definitional challenges bleed into the practical challenge of designing a prominence system for online platforms. There must be realism about the commercial upside to such a system for PSBs, and any potential to disadvantage other types of content creators. 

As the growth of streaming viewing slows, the narrative is being reshaped around the types of engagement these platforms can command.

With a common set of metrics across UK streaming platforms, we have categorised and quantified different types of engagement.

While focus inevitably is being directed to intensive, high-value engagement, this is the minority: most viewing is probably fungible, with a large proportion to older, non-exclusive content.
 

Video-sharing platforms give brands unprecedented freedom to commission and distribute entertainment, but building an audience is different from buying one.

The opportunity depends on brands turning fleeting attention into lasting affinity and, ultimately, commercial value.

As brands take greater control, money and responsibilities are shifting across the value chain, creating new opportunities and risks for broadcasters, producers and creators.

The UK national news industry is smaller, leaner and more profitable than it was a decade ago. Aggregate revenue is broadly flat on 2017, but adjusted operating profit has risen from £214m to £336m as publishers have shifted towards higher-value digital and reader revenues.

Subscriptions are maturing from a volume game into one of yield, retention and segmentation. Tabloids are selectively paywalling their content; the focus is increasingly lifetime value rather than subscriber count alone.

The next phase is portfolio economics, using the same journalism, expertise, personalities and IP across newsletters, specialist products, events, communities, flexible access and machine licensing—extracting more value from the same underlying assets.

A media fightback is emerging, as the creative industries respond to two years of AI disruption, and leading labs issue dire warnings against a laissez-faire approach.

A renewed push against tech’s “capture” of the value chain is visible across sectors from music to publishing.

Big tech earnings continue to blow past expectations. Those with credible gatekeeper roles and diversified revenues are benefitting this quarter.

Ofcom is curtailing Openreach’s price discounting for now, effectively setting a price floor based on theoretical altnet economics as opposed to Openreach’s own (much lower) fibre costs.

This restriction is however likely to prove time-limited, with VMO2-only areas and those with high altnet market share likely to be de-regulated first, and within the current regulatory cycle.

VMO2 and the altnets need to be prepared to compete on a more even footing, and would be wise not to hasten deregulation through their own actions, such as focusing on market share grabs as opposed to building a sustainable business model.

Service revenue reversed its slight improvement last quarter, worsening 0.2ppts to -0.9%, as all markets except Spain were flat or in decline.

Incumbents in Europe are increasingly trending towards outperforming peers on net adds, despite higher (and more stable) ARPUs.

EE and Vodafone’s recent launches of premium tiers using 5G slicing are the boldest moves in this direction we have seen in Europe, and present challenges and opportunities going forward.