About this weblog

What you need to know: This weblog captures key data points about the global telecoms industry. I use it as an electronic notebook to support my work for Pringle Media.

Tuesday, November 13, 2018

Vodafone Seeks Deeper Engagement

Vodafone reported a 0.5% rise in organic service revenue (excluding handset financing) for the quarter ending September 30th, as a "good commercial and financial performance in most markets [was] offset by increased competition in Italy and Spain."

Vodafone said it plans to "drive growth in the Europe Consumer segment by developing deeper customer relationships, with a strong focus on our existing base. We intend to both cross-sell additional products (e.g., broadband, family SIMs, TV) and up-sell new experiences (including higher speeds with 4G Evo / 5G, low latency mobile gaming services and a wide range of consumer IoT devices)... We intend to launch 5G services in-line with leading local competitors during calendar 2019 and 2020, with an initial focus on dense urban areas. 5G’s improved spectral and energy efficiency supports up to a 10x reduction in the cost per Gigabyte, which will allow the group to limit the future growth in network operating costs despite strong expected traffic growth."

In emerging markets, Vodafone said it sees "a significant opportunity to grow in digital and financial services. M-Pesa, our African payments platform, has moved beyond its origins as a money transfer service, and now provides enterprise payments, financial services and merchant payment services for mobile commerce. Over 10 billion US dollars of payments are processed over the platform every month, across the seven African markets where M-Pesa services are active. We now have 35 million M-Pesa customers, and in [the six months to September 30th] M-Pesa grew revenues by 19.4% to 400 million euros. M-Pesa represented 12% of Emerging Consumer service revenues." Source: Vodafone statement

Thursday, November 8, 2018

Tale of Two Markets for Deutsche Telekom

Deutsche Telekom reported a 0.9% year-on-year decline in its revenues in Germany to 5.44 billion euros in the third quarter, offset by a 8% rise in revenues at T-Mobile USA to 10.7 billion dollars. In the rest of Europe, revenues rose 2.2% on an organic basis to 3.05 billion euros. In Germany, mobile services revenues declined 9% (see above), while another large increase in postpaid mobile customers drove growth in the U.S. (see below). Source: Deutsche Telekom documents

Saturday, November 3, 2018

Apple Calls Sharp Slowdown

Apple forecast that sales in the quarter ending December 29th will reach between 89 billion and 93 billion US dollars, which would represent a year-on-year increase of between 1% and 5%. "This range reflects a number of factors," said Luca Maestri, Apple’s CFO. "First, ... the launch timing of our new iPhones this year versus last year. Second, we expect almost 2 billion dollars of foreign exchange headwinds. Third, we have an unprecedented number of products ramping, and while our ramps are going fairly well, we have uncertainty around supply and demand balance. And fourth, we also face some macroeconomic uncertainty, particularly in emerging markets."

Apple reported a 20% year-on-year increase in revenues for the quarter ending September 29th to 62.9 billion dollars, driven primarily by a 29% rise in iPhone revenues. However, iPhone unit shipments were flat year-on-year. Even so, Tim Cook, Apple's CEO, told analysts that Apple's installed base is growing at "double digit", driving growing demand for services, such as Apple Pay, Apple Music and the App Store.

Services revenue rose 27% on a like-for-like basis to almost 10 billion dollars in the quarter ending September 29th. “We concluded a record year with our best September quarter ever, growing double digits in every geographic segment," said Maestri.  "We set September quarter revenue records for iPhone and Wearables and all-time quarterly records for Services and Mac.” Source: Apple statement 

Tuesday, October 30, 2018

PlayStation Gives Sony A Boost

Sony reported a 6% year-on-year increase in sales for the quarter ending September 30th to 2.18 trillion Japanese yen (19.6 billion US dollars). The growth was driven by a 27% rise in revenues from games and network services (the PlayStation business) to 550 billion yen.

Sony increased its sales forecast for the year ending March 31 2019 to 8.7 trillion yen (77.1 billion dollars), which would represent an annual increase of just under 2% - see graphic below. Source: Sony presentation

Friday, October 26, 2018

International Operations Drag Down Amazon

Amazon reported a 30% year-on-year increase in net sales to 56.6 billion US dollars in the third quarter, on a constant currency basis. It forecast net sales will be between 66.5 billion and 72.5 billion dollars in the current quarter, representing an increase of between 10% and 20% compared with fourth quarter 2017. This guidance anticipates an unfavourable impact of approximately 80 basis points from foreign exchange rates.

In the third quarter of 2018, there was a marked slowdown in Amazon's international business, where sales grew just 13% compared with 29% a year ago. Sales at AWS were up 46%, compared with 42% a year ago, while sales growth in North America was 35% - the same as in the third quarter of 2017. 

Brian T. Olsavsky, CFO of Amazon.com, said: "We did the Souq acquisition last year in May. So the full pickup on that year-over-year was in 2017 and now we're lapping that. There's also material change in the Diwali calendar in India. About half of our Diwali sales last year were in Q3. This year they'll be fully in Q4. So those are a couple factors that hit the international growth area in particularly."

Explaining the cautious fourth quarter guidance,  Olsavsky added: "Whole Foods.. was purchased in August of last year and that has impacted every quarter since then, Q4 will be the first solid non-Whole Foods comp since before we bought them since Q2 of last year." Source: Amazon statements

Intense Competition Slows Orange Down

Orange reported an increase in revenues on an organic basis of just 0.6% year-on-year for the third quarter. It blamed particularly intense competition in its key markets. Source: Orange statements

Alphabet Anticipates Hardware Uplift

Alphabet reported a 22% year-on-year increase in revenues, on a constant currency basis, for the third quarter of 2017 to 33.7 billion US dollars.  That represents a slight slowdown on the 23% increase in the second quarter. Although the number of paid clicks on adverts on Google properties rose 62% in the third quarter year-on-year, the average selling price was down 28%.

Ruth Porat, CFO of Alphabet, said: "We continue to be pleased with the underlying momentum in our advertising businesses as we apply our strengths in machine learning to improve the experience for users and advertisers. As we noted, hardware was only a modest contributor in the third quarter as we launched a new Made by Google family of products for the fourth quarter holiday season."

Other Bets' revenues were 146 million dollars in the quarter, primarily generated by Fiber and Verily.  Verily is partnering with pharmaceutical companies "to move medicine from reactive to proactive." Alphabet's self-driving car developer, Waymo, has expanded its early rider programme to include more participants and is now beginning to test pricing models. Source: Alphabet statements

Thursday, October 25, 2018

AT&T Leans Heavily on Mobile

Stripping out the impact of an accounting change, AT&T reported a 17.5% increase in third quarter revenues to 46.6 billion US dollars. The increase was driven by the Time Warner acquisition. Revenue declines in domestic video, legacy wireline services and Vrio (its DirecTV business in Latin America) were offset by growth in wireless equipment and services, WarnerMedia and its advertising unit Xandr.

AT&T said wireless revenues were up 5.1%, propelled by equipment sales, as wireless service revenue was up just 2.3%. Warner Media revenues were up 7% thanks to higher subscription revenues and higher TV licensing earnings at Warner Bros. AT&T's video-on-demand service DIRECTV NOW added 49,000 subscribers taking its total subscriber base to nearly 1.9 million. AT&T WatchTV, its latest video product, also added subscribers in the quarter. Source: AT&T statements