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.

Thursday, October 18, 2018

Ericsson's Sales Inch Up

Ericsson said its revenues rose 1% in the third quarter of 2018, adjusted for comparable units and currency changes, to 53.8 Swedish krona (almost 6 billion US dollars).  The telecoms equipment maker was boosted by strong demand in North America, where telcos are preparing for the rollout of 5G. source: Ericsson presentation

Wednesday, October 17, 2018

Netflix Beats its Own Forecasts

Netflix forecast that revenues in the fourth quarter of 2018 will rise almost 28% to 4.2 billion US dollars, following an increase of 34% in the third quarter. The company said it added seven million subscribers in the third quarter (two million more than it forecast) "driven by greater-than-expected acquisition globally, with strong growth broadly across all our markets including Asia." The average selling price of subscriptions was also up 8% year-on-year. Source: Netflix statement

Tuesday, July 31, 2018

Handset and Digital Sales Help Telefónica


Telefónica reported a 2% year-on-year rise in revenues on an organic basis to 12.1 billion euros in the second quarter, fuelled by a 20% increase in handset sales and a 0.7% increase in service revenues. In particular, digital services revenues rose 28.5% to 1.7 billion euros in the quarter, boosted by enterprise demand for cloud and security services. The Madrid-based operator reiterated its guidance that revenues will grow 1% in 2018 on an organic basis. Capital spending was up 5.5% on an organic basis in the first half of 2018 to 3.9 billion euros.

José María Álvarez-Pallete, Executive Chairman, said: "We continue investing and expanding our ultra broadband networks. As of June, we have 47.3 million premises passed with proprietary FTTx/cable network, (+15% year-on-year), LTE coverage grew by 6 percentage points to an average 73% in all our footprint. Lastly, we remain convinced that the key levers to a sustainable digital future lie with our capacity to radically transform our networks, create a customer-centric digital ecosystem, establish digitalisation as the cornerstone for generating efficiencies and remain at the vanguard of cognitive intelligence." source: Telefónica statement


Thursday, July 26, 2018

Facebook Sees Sharp Slowdown in Growth

Facebook reported its revenue in the second quarter rose 38% year-on-year to 13.2 billion US dollars, on a constant currency basis. Noting that total revenue growth rate decelerated approximately seven percentage points in the second quarter compared with the first quarter, CFO David Wehner forecast that revenue growth rates will decline quarter-on-quarter by high single digit percentages in both the third and fourth quarters.

"There are several factors contributing to that deceleration," he said. "For example, we expect currency to be a slight headwind in the second half versus the tailwinds we have experienced over the last several quarters. We plan to grow and promote certain engaging experiences like Stories that currently have lower levels of monetisation. We are also giving people who use our services more choices around data privacy which may have an impact on our revenue growth."

However, Facebook did say that 2.5 billion people worldwide used one of its applications in June. "This is our best estimate of our de-duplicated audience across Facebook, Instagram, Messenger, and WhatsApp," added Wehner. "We believe this number better reflects the size of our community and the fact that many people are using more than one of these services." Source: Facebook earnings call transcript

Tuesday, July 24, 2018

Google More than Doubles Capex

Alphabet, owner of Google, reported a 23% year-on-year rise in revenues for the second quarter to 32.7 billion US dollars on a constant currency basis. Although the average fee advertisers on Google Properties paid per click fell 22% year-on-year, the number of clicks rose 58%. "In terms of dollar growth, results were led again by mobile search with strong contributions from both YouTube and desktop search," said Ruth Porat, CFO of Alphabet.

Capex leapt by 139% to 12.78 billion dollars in the first six months of 2018, as Alphabet invests in YouTube, cloud computing capacity and machine learning. Sundar Pichai, CEO of Alphabet, outlined the impact of machine learning on Google's apps, such as Google Maps: "Through our improvements in machine learning, we have seen a 25x increase in our ability to build maps algorithmically, and we have added 110 million algorithmically drawn buildings to Maps, since the beginning of this year. And with over 1 billion users, we’re continuing to see tremendous growth in maps with especially strong growth in countries like Indonesia, India and Nigeria, each of which are growing over 50% year-on-year." Source: Google statement and earnings call transcript


Thursday, July 19, 2018

Ericsson Sees Radio Access Market Contract

Ericsson forecast the radio access network (RAN) equipment market will decline by 2% for full-year 2018, but will achieve a 2% compound annual growth rate for the period between 2017 and 2022. "In 2018, the Chinese market is expected to decline due to reduced LTE investments, while there is positive momentum in North America," Ericsson added.

Ericsson reported a 1% year-on-year fall in sales for the second quarter on an organic basis to 49.8 billion Swedish krona (5.6 billion US dollars). "We have good market traction in networks, with a sales growth of 2%, particularly in North America where all major operators are preparing for 5G," Ericsson said. Source: Ericsson statement 

Wednesday, July 18, 2018

Netflix Reports 130 Million Members

Netflix forecast that revenues will increase by 34% year-on-year in the current quarter, following a rise of 40% in the second quarter to 3.9 billion US dollars. The company reported that streaming revenue rose 43%, driven by a 26% increase in average paid memberships and a 14% rise in average selling prices.

Netflix said: "We had a strong, but not stellar, Q2, ending with 130 million memberships. Membership growth was 5.2 million, the same as Q2 last year, but lower than our 6.2 million forecast. .. we are starting to lead artistically in some categories, with our creators earning enough Emmy nominations this year to collectively break HBO’s amazing 17-year run." source: Netflix statement

Friday, May 11, 2018

Global Services Drags Down BT

BT Group reported a 1% fall in underlying revenue for the year to March 31st to 23.7 billion pounds (26.9 billion euros) and forecast a 2% fall for the year to March 31st, 2019.

The London-based company said the 3% growth in its consumer businesses was more than offset by decline in its enterprise divisions. "The main contributor to enterprise revenue decline was Global Services whose reported revenue declined 9% due to ongoing challenging market conditions and a reduction in IP Exchange volumes and equipment sales in line with our strategy to reduce low margin business."

Yet BT plans to increase capital expenditure from 3.5 billion British pounds in the past financial year to 3.7 billion pounds in this year. source: BT statement


Wednesday, May 2, 2018

iPhone X Lifts Apple Revenue

Apple forecast its revenue in the current quarter will reach between 51.5 billion and 53.5 billion US dollars, which would represent a year-on-year increase of between 12% and 18%.

For the quarter ending March 31, revenue rose 16% to 61.1 billion dollars, fuelled primarily by a 14% rise in iPhone revenues, even though shipments rose just 3%. Some of the difference is due to the high price of the latest model, the iPhone X, and Apple may also have benefitted from exchange rate movements.

Tim Cook, Apple’s CEO, said. “Customers chose iPhone X more than any other iPhone each week in the March quarter, just as they did following its launch in the December quarter. We also grew revenue in all of our geographic segments, with over 20% growth in Greater China and Japan.” Service revenue, which includes revenue from digital content and services, AppleCare, Apple Pay and licensing, rose 31% to 9.2 billion dollars. source: Apple statement


Tuesday, May 1, 2018

Amazon Prime Accelerates

Amazon forecast net sales will grow between 34% and 42% year-on-year in the current quarter to between 51 billion and 54 billion US dollars, boosted by a favourable impact of approximately 1.2 billion dollars or 320 basis points from foreign exchange rates.

In the first quarter of 2018, Amazon increased sales 39% year-on-year on an constant currency basis to 51 billion dollars in the first quarter. Amazon Web Services (AWS), the cloud computing business, generated a 49% increase in sales on a reported basis.

In a letter to shareholders, CEO Jeff Bezos revealed Amazon Prime now has more than 100 million paid members globally, 13 years after it was first launched. "In 2017 Amazon shipped more than five billion items with Prime worldwide, and more new members joined Prime than in any previous year – both worldwide and in the U.S.," he added. "Tens of thousands of customers are also using a broad range of AWS machine learning services, with active users increasing more than 250% in the last year, spurred by the broad adoption of Amazon SageMaker."

Bezos also said there are now more than 30,000 skills for Alexa (Amazon's voice controlled personal assistant) from outside developers, which can control more than 4,000 smart home devices from 1,200 brands. He added that Amazon has improved Alexa’s spoken language understanding by more than 25% over the past 12 months through "enhancements in Alexa’s machine learning components and the use of semi-supervised learning techniques. (These semi-supervised learning techniques reduced the amount of labeled data needed to achieve the same accuracy improvement by 40 times)."

The letter to shareholders also noted that Amazon Music now has tens of millions of paying customers. "Amazon Music Unlimited, our on-demand, ad-free offering, expanded to more than 30 new countries in 2017, and membership has more than doubled over the past six months," Bezos wrote.
Sources: Bezos letter to shareholders and Amazon statement

Fixed Line Growth for China Mobile

China Mobile recorded a 1% year-on-year increase in revenues for the first quarter of 2018, fuelled by a 3.6% increase in service revenues to 166.7 billion Chinese yuan (26.3 billion US dollars). The number of wireline broadband customers leapt 45% year-on-year to 124 million, while 4G connections climbed 18% to 672 million. source: China Mobile operating data

Tuesday, April 17, 2018

Netflix's Price Rises Succeed

Netflix reported 43% year-on-year growth in revenue to 3.7 billion US dollars for the first quarter, due to a 25% increase in subscribers and a 14% rise in its average selling price.  The video streaming company said that global net adds totalled 7.41 million, up 50% year-over-year and ahead of its 6.35 million forecast. "The variance relative to our guidance was driven by continued strong acquisition trends across the globe which we attribute to the growing breadth of our content and the worldwide adoption of internet entertainment," the company said.

For the current quarter, Netflix forecast revenue of 3.9 billion dollars, which would represent a 41% year-on-year increase. It anticipates 6.2 million net additions globally, including 5 million outside the US. "We’ll have 7.5 billion to 8 billion dollars of content expense (on a P&L basis) in 2018 across a wide variety of formats (series, films, unscripted, docs, comedy specials, non-English language) to serve the diverse tastes of our growing global membership base," it added. Source: Netflix statement

My report for STL Partners exploring the future of Netflix and Spotify is available here.

Thursday, April 12, 2018

XBox Music Leads Artist Payouts

Infographic: Music-Streaming: Who Pays Best? | Statista Source: Statista

EU Fibre-to-the-Home Bill To Top 500 Billion Euros

The European Commission has estimated that about 500 billion euros of capital expenditure will be required to expand fibre to the home (FTTH) services across the EU by 2025. Speaking at the Gigabit Access event in Brussels on Tuesday, Anthony Whelan, director of DG Connect Directorate B at the European commission, said: "We estimate the sort of investment required, if you follow the normal capex structures of the industry, will be somewhere in the region of 500 billion euros, and we see an investment cycle that would see us hitting around 335 billion investment by 2025. So you are looking at a shortfall in excess of 150 billion euros and various strategies need to be devised to address that gap." source: Total Telecom article

Friday, March 30, 2018

Enterprise Sales Lift Huawei

Huawei reported a 16% year-on-year increase in revenue for 2017 to 603.6 billion Chinese yuan (92.5 billion US dollars based on year-end exchange rates). The growth was driven primarily by a 35% increase in Huawei's enterprise revenues to 54.9 billion yuan.  In 2017, Huawei spent 89.7 billion yuan on R&D, up 17% compared with 2016. source: Huawei statement

Friday, March 23, 2018

Tencent Enjoys Bumper 2017


Tencent reported a 56% increase in revenues in 2017 to 237.8 billion Chinese yuan (36.4 billion US dollars), driven by a 65% rise in advertising revenues and a 52% rise in value added services revenues generated by its social networks, which include QQ and WeChat.

Tencent said that its Tencent Video service achieved rapid growth in traffic and paying users, driven by the popularity of its exclusive drama series, movies and self-commissioned content. "We became the leading video streaming platform in China with over 137 million mobile daily active users during the fourth quarter and 56 million subscriptions as of the end of 2017," it added. source: Tencent statement

Thursday, March 22, 2018

China Mobile Sounds Bullish Note

Boosted by its wireless data growth, China Mobile recorded operating revenue of 740.5 billion Chinese yuan (117 billion US dollars) for 2017, up 4.5% from 2016. It said revenue growth in telecommunications services achieved a six-year high of 7.2%, outpacing the industry average. Revenue from wireless data traffic, on a full-year basis, accounted for more than half of the total telecommunications services revenue for the first time.

China Mobile said the total number of connections reached 1.229 billion, of which 887 million were mobile connections, 113 million were wireline broadband connections and 229 million were Internet of Things connections. IoT revenue rose 44% to 5.5 billion yuan

In 2018, the operator is aiming to take its total number of connections above 1.4 billion, partly by adding another 120 million IoT connections. source: China Mobile statement

Wednesday, February 7, 2018

Amazon Accelerates Through Fourth Quarter

Stripping out the impact of currency movements, Amazon reported a 36% year-on-year increase in net sales for the fourth quarter to 60.5 billion US dollars. That compares with a 31% increase across the whole of 2017. Amazon forecast that net sales will grow between 34% and 42% year-on-year in the current quarter to between 47.75 billion and 50.75 billion dollars.

Amazon Web Services' revenues jumped 45% in the fourth quarter to 5.1 billion dollars. Amazon said more than five billion items shipped with Prime worldwide in 2017, as more new members joined last year than in any previous year, both worldwide and in the U.S. source: Amazon statement

Monday, February 5, 2018

Apple Cranks Up Double-Digit Growth

Apple reported a 13% year-on-year increase in revenue for the quarter ending December 30th to 88.3 billion US dollars, fuelled by a 13% increase in iPhone revenues. Apple forecast its revenue will be between 60 billion and 62 billion dollars in the current quarter, which would represent a year-on-year increase of between 13% and 17%.

Tim Cook, Apple’s CEO, said. “We’ve also achieved a significant milestone with our active installed base of devices reaching 1.3 billion in January. That’s an increase of 30% in just two years, which is a testament to the popularity of our products and the loyalty and satisfaction of our customers.” source: Apple statement

Thursday, February 1, 2018

Facebook Flags Up New Strategy

Facebook reported a 47% year-on-year rise in revenue for the fourth quarter of 2017 to 12.97 billion US dollars, as the number of daily active users rose 14% to 1.4 billion.

However, Mark Zuckerberg, Facebook founder and CEO, warned that the social network is now looking to reduce the time people spend passively consuming entertainment: "In 2018, we're focused on making sure Facebook isn't just fun to use, but also good for people's well-being and for society. We're doing this by encouraging meaningful connections between people rather than passive consumption of content. Already last quarter, we made changes to show fewer viral videos to make sure people's time is well spent. In total, we made changes that reduced time spent on Facebook by roughly 50 million hours every day. By focusing on meaningful connections, our community and business will be stronger over the long term."

"The biggest impact on the focus on meaningful interactions, as Mark mentioned, will be in areas like passive video where from a business perspective, we monetize less on the time spent basis. So if you think about it in terms of things like posts, views in News Feed which drives impression growth, we think this will have a less of an impact," said Facebook's CFO David Wehner. "[Still] we have good opportunities to grow the business across both Facebook and Instagram in 2018. We continue to improve the effectiveness of our ads which helps drive ROI for advertisers and demand for our ad products. On the supply side, we expect we will be able to continue to grow ad impressions at a modest pace.... In 2018 we expect constant currency ad revenue growth rates to decelerate consistent with the trends we have seen over the past year." source: Facebook statements




Tuesday, January 23, 2018

Verizon Sees Slow Growth Ahead

Verizon reported a 0.6% year-on-year increase in revenue for the fourth quarter, excluding divestitures and acquisitions, to 34 billion US dollars.  However, wireless service revenue was down 2.9% to 15.9 billion dollars.

The New York-based company forecast that full-year revenues will grow at low-single-digit percentage rates on a GAAP basis in 2018. Excluding the impact from the new revenue recognition standard, Verizon said it is on track to achieve year-over-year wireless service revenue growth by the middle part of 2018. On a GAAP basis, Verizon expects service revenue growth to turn positive around the end of 2018 or early 2019.

Verizon said its media business serves approximately one billion "monthly unique users", generating revenue of 2.2 billion US dollars in the fourth quarter (Verizon completed the acquisition of Yahoo! in June 2017). It has content distribution partnerships with the NFL and the NBA. Verizon also reported a 8% year-on-year organic increase in telematics and Internet of Things revenue in the fourth quarter, claiming it has the world’s largest fleet management platform.  source: Verizon statement

Netflix Forecasts Even Faster Growth

Netflix reported a 33% year-on-year increase in revenue for the fourth quarter to 3.29 billion US dollars, as the number of paid streaming memberships rose 25% and its average selling price rose 9% from the same period in 2016. Netflix said: "Q4 capped an amazing year for Netflix original content with returning seasons of The Crown and Black Mirror as well as Stranger Things, which cemented its place as a global phenomenon."

The Los Gatos, California company forecast a 40% leap in revenues for the first quarter of 2018 to 3.7 billion dollars.  In 2017, Netflix added 24 million new memberships compared with 19 million in 2016. source: Netflix statement


Tuesday, January 2, 2018

Huawei Reports Slowing Growth

Huawei estimates its group revenue increased 15% in 2017 to 600 billion Chinese yuan (91.2 billion US dollars), which would mean last year saw the company’s slowest growth since 2013. It reported a 10% increase in mobile phone shipments in 2017 to 153 million units.

In a statement, Huawei rotating CEO Ken Hu, said: “As a global player, we need to be patient and persistent, demonstrating our value and contribution one quiet step at a time. We need to earn trust, continue to improve, and cultivate a receptive business environment that can support business development on a whole new level: not just 100 billion dollars, but revenues of hundreds of billions of dollars and beyond.” Source: Mobile World Live article.
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