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 27, 2022

Meta Maintains Long-Term Focus

Meta, owner of Facebook, reported a 2% rise in revenue (on a constant currency basis) to 27.7 billion US dollars for the third quarter. Meta flagged "weak advertising demand, which we believe continues to be impacted by the uncertain and volatile macroeconomic landscape."

CEO Mark Zuckerberg described messaging as a "major monetisation opportunity." He said one of Meta's fastest growing products is Click-to-Messaging ads, which let businesses run ads on Facebook and Instagram that start a thread on Messenger, WhatsApp or Instagram Direct so they can communicate with customers directly. The product generates a 9 billion dollar annual run rate. "This revenue is mostly on Click-to-Messenger today since we started there first, but Click-to-WhatsApp just passed a 1.5 billion dollar run rate, growing more than 80% year-over-year."

Zuckerberg pointed to paid messaging as another opportunity. "We're putting the foundation in place now to scale this with key partnerships like Salesforce, which lets all businesses on their platform use WhatsApp as the main messaging service to answer customer questions, send updates, and sell directly in chat," he added. "We also launched JioMart on WhatsApp in India and it's our first end-to-end shopping experience that shows the potential for chat-based commerce through messaging."

Mete has just started shipping its new Quest Pro VR headset, which is designed to deliver "high-resolution mixed reality so you can blend virtual objects into the physical environment around you." 

"There are 200 million people who get new PCs every year, mostly for work," Zuckerberg added. "Our goal for the Quest Pro line over the next several years is to enable more and more of these people to get their work done in virtual and mixed reality, eventually even better than they could on PCs....There's still a long road ahead to build the next computing platform, but we are clearly doing leading work here. This is a massive undertaking and it’s often going to take a few versions of each product before they become mainstream. But I think our work is going to be of historic importance and create  the foundation for an entirely new way that we will interact with each other and blend technology into our lives." Source: Meta statement

Tuesday, October 25, 2022

Alphabet Sees Serious Slowdown

Alphabet reported a 11% year-on-year increase (at constant currencies) in consolidated revenues for the third quarter to 69.1 billion US dollars. That's down from 39% a year earlier. 

With growth slowing, Alphabet has "started our work to drive efficiency, by realigning resources to invest in our biggest growth opportunities. Over the past quarter, we’ve made several shifts away from lower priority efforts to fuel higher growth priorities," said Sundar Pichai, CEO of Alphabet and Google. "Over a decade ago, focusing the company’s efforts on mobile helped us to build and grow our business for the shift to mobile computing. We’re at a similar point now with AI, another transformational technology. Our investments in AI and deep computer science mean that we can deliver a wide range of breakthroughs across our products and services, to help people, businesses, and communities."

In October, Alphabet's unit Waymo announced Los Angeles will be the next city to be served by its ride-hailing service, joining Phoenix and San Francisco. "We’ll begin driving autonomously in several central districts over the coming months as we prepare to serve Angelenos," the company said. "We’ll deploy a round-the-clock service that provides more accessible and dependable mobility options to all residents of LA." Waymo said Los Angeles represents a market opportunity of 2 billion dollars in 2022. 

"Waymo remains the only company operating a fully autonomous, commercial ride-hailing service for passengers round the clock in Phoenix’s East Valley – no NDAs, remote operators or pre-defined pick-ups." it added. "We’re the first and only company in the world providing autonomous ride-hail trips to and from an airport (Phoenix’s Sky Harbor), and we drive more fully autonomous miles in the U.S. than any other company." Source: Alphabet and Waymo statements.

Wednesday, October 19, 2022

Netflix Moves Beyond Membership

Netflix forecast year-on-year revenue growth of 9% (in constant currency terms) for the fourth quarter of 2022, as it anticipates that growth in paid memberships will fall to just 2.6% from about 9% a year ago.  

In the third quarter of 2022, Netflix's revenue rose 13% to 7.9 billion US dollars, excluding the impact of foreign exchange movements. 

Netflix said: "As discussed in previous letters, we are increasingly focused on revenue as our primary top line metric. This will become particularly important heading into 2023 as we develop new revenue streams like advertising and paid sharing, where membership is just one component of our revenue growth."

Netflix is also trying to expand its year-old games proposition: "We now have 35 games on service (all included in every Netflix subscription without in-game ads or in-app purchases) and we’re seeing some encouraging signs of gameplay leading to higher retention. With 55 more games in development, including more games based on Netflix IP, we’re focused in the next few years on creating hit games that will take our game initiative to the next level. More generally, we see a big opportunity around content that crosses between TV or film and games." Source: Netflix statement

Friday, August 12, 2022

Deutsche Telekom Cranks up High-Speed Connectivity

Deutsche Telekom reported a 4.3% organic rise in service revenues for the group year-on-year in the second quarter of 2022. 

DT said it now passes more than 11 million European homes with FTTH (fibre-to-the-home) networks, while its "ultra capacity" 5G network passes 235 million U.S. homes and is on track of 260 million by year-end.  Source: Deutsche Telekom collateral

Tuesday, August 9, 2022

Autonomous Taxis Go Commercial in China

Internet company Baidu said it has secured the first permits in China to offer commercial fully driverless robotaxi services to the public on open roads. Its Apollo Go ride-hailing service has been authorised to collect fares for robotaxi rides - without human drivers in the car - in specific districts in Chongqing and Wuhan. 

The regulatory decision marks "a key turning point for the future of mobility in China, leading to an eventual expansion of driverless ride-hailing services to paying users across the country," Baidu said.

Having received the permits, Baidu plans to provide fully driverless robotaxi services in the designated areas in Wuhan from 9 am to 5 pm, and Chongqing from 9:30 am to 4:30 pm, with five Apollo robotaxis operating in each city. The areas of service cover 13 square kilometers in the Wuhan Economic & Technological Development Zone, and 30 square kilometers in Chongqing's Yongchuan District.

Baidu said its autonomous driving system is supplemented by monitoring redundancy and remote driving capability (enabled by a 5G cellular connection) and a robust safety operation system.

Baidu said Apollo Go is the world's largest robotaxi service provider, recently reaching the milestone of more than one million orders. Source: Baidu statement

Friday, July 29, 2022

Orange Bank Sees Modest Growth

Orange said its mobile financial services activities continued to grow in the first half of 2022.  At June 30, 2022, Orange Bank had nearly 1.9 million customers in France and Spain, up from 1.6 million nine months earlier. In Africa, where it has launched a new microcredit service, Orange Bank Africa had 845,000 customers at the end of June, up from 600,000 at the end of September.

Orange Bank reported deposits of 1.06 billion euros in special savings accounts and 718 million euros in current accounts.  That was set against overdrafts of 844 million euros and housing loans of 994 million euros.  Source: Orange statements

Amazon Expects Stronger Sales Growth


Amazon said its net sales increased 10% to 121 billion US dollars in the second quarter, excluding the negative impact of year-over-year changes in foreign exchange rates.

It expects net sales to grow between 13% and 17% in the current quarter, compared with third quarter 2021. This guidance anticipates an unfavourable impact of approximately 390 basis points from foreign exchange rates.

In central London, Amazon has launched its first "micromobility" hub, which will coordinate local deliveries by e-cargo bikes (see pics) and walkers.

Amazon also said it has filed legal action against the administrators of more than 10,000 Facebook groups that attempt to orchestrate fake reviews on Amazon in exchange for money or free products. "These groups are set up to recruit individuals willing to post incentivised and misleading reviews on Amazon’s stores in the U.S., the UK, Germany, France, Italy, Spain, and Japan," the company said. "Amazon will use information discovered from this legal action to identify bad actors and remove fake reviews commissioned by these fraudsters that haven’t already been detected by Amazon’s advanced technology, expert investigators, and continuous monitoring." Source: Amazon statement

Telefónica Ups Guidance Slightly

Despite the uncertain macro economic environment, Telefónica said it now expects revenues in 2022 to be at the high-end of its guidance for low single digit growth in 2022.  That guidance relates to organic growth and includes 50% of its joint venture with Virgin Media in the UK. 

In the second quarter of 2022, Telefónica's revenues rose 5.2% in organic terms, up from less than 4% in the previous quarter, with growth across all the group's markets. It said that service revenue and handset sales grew by 3.9% and 17.4% respectively. Group revenue in the second quarter was 10.04 billion euros.

The Madrid-based group continues to look for opportunities in adjacent markets. In June, for example, Repsol and Telefonica España launched Solar360, a new joint venture to "develop the solar self-consumption business."  Solar360 plans to serve private customers, communities of neighbours and companies, SMEs, and large companies. Telefonica said it brings distribution channels, technological capacity and "IoT capabilities to provide the installations with a differential connectivity in the market." Source: Telefónica statement

Apple Sees More Growth Ahead

Apple reported year-on-year revenue growth of 2% in the quarter ending June 25th to 83 billion US dollars. Services revenue was up 12% to 19.6 billion dollars. 

"Our supply constraints were less than we anticipated at the beginning of the quarter, coming in slightly below the range we discussed during our last call," Tim Cook, Apple CEO, said.

"Overall, we believe our year-over-year revenue growth will accelerate during the September quarter compared to the June quarter despite approximately 600 basis points of negative year-over-year impact from foreign exchange,"added Luca Maestri, Apple’s CFO. "On the product side, we expect supply constraints to be lower than what we experienced during the June quarter. Specifically related to services, we expect revenue to grow but decelerate from the June quarter due to macroeconomic factors and foreign exchange." Source: Apple collateral

Thursday, July 28, 2022

Alphabet Maintains Some Momentum

Alphabet reported a 16% rise in revenues in the second quarter to 69.7 billion US dollars at constant currencies. It also gave some new data points:

  • People are using Google Lens to do visual searches more than eight billion times per month. 
  • People are shopping across Google more than one billion times each day
  • There are more than three billion monthly active devices running Android worldwide. Last year, consumers activated one billion Android phones.
  • YouTube Shorts are watched by over 1.5 billion signed-in users every month, with more than 30 billion daily views. 
  • YouTube TV has surpassed five million subscribers, including trialists.

Alphabet also reported that Waymo expanded rider-only testing with employees to include downtown Phoenix, and started testing at Phoenix’s Sky Harbor airport. It also began charging "Trusted Tester" riders in San Francisco, a step closer to launching a commercial service with fully autonomous trips.  Source: Alphabet collateral 

Saturday, July 23, 2022

Verizon Lowers Revenue Forecast

Verizon said it now expects wireless service revenue to grow between 8.5% and 9.5% in 2022, down from the prior 9% to 10% range. In the second quarter, wireless service revenue growth was 9.1%, primarily driven by the acquisition of TracFone, together with "further progress on our Premium Unlimited strategy and strong business volumes," Verizon said. 

Fixed "wireless momentum accelerated as we added 256,000 subscribers in the quarter, up from 194,000 in the first quarter," it added. "Fixed wireless net adds have increased every month throughout 2022, and we expect to continue that trend in the third quarter." 

The telco reported "relatively flat" total revenue year-over-year, as wireless service revenue growth and higher wireless equipment revenue were offset by wireline declines and the sale of Verizon Media in 2021. Total revenue was 33.8 billion dollars in the second quarter. 

Capital spending for the first half of the year totalled 10.5 billion dollars, an increase of 1.8 billion dollars compared to last year, driven by a spend of 2.8 billion dollars deploying 5G in the so-called C-Band (3.7 GHz to 4.2 GHz). Source: Verizon collateral

Friday, July 22, 2022

AT&T Anticipates Milder Recession than in 2008

AT&T reported a 2.2% rise in "comparative revenues" for the second quarter to 29.6 billion US dollars. It said the rise was largely driven by wireless revenue growth and, to a lesser extent, higher Mexico and consumer wireline revenues, partially offset by declines in business wireline.

AT&T described the macro-economic environment as "dynamic". CEO John Stankey added: "Our most recent experience in looking at kind of a challenged cycle is probably coming out of the 2008 recession and the dynamic around it...  that was a pretty stressed time... my guess is it probably won't be quite as shocking as that cycle is, what's occurred in a worst-case scenario." Source: AT&T collateral

Thursday, July 21, 2022

Tesla Moves Self-Driving Forward

Tesla said it has now deployed its "FSD (full self driving) Beta with City Streets driving capability" to more than 100,000 owners of its vehicles. "We've now driven over 35 million miles with FSD Beta. That's more autonomous miles than any company we're aware of... and that mileage is growing exponentially," Elon Musk, Tesla CEO, added. "FSD Beta is on track to be released for all of North American customers before the end of this year. And hopefully, if we get regulatory approval, we'll also be releasing it hopefully in Europe and some other parts of the world."

Musk also said Tesla "will increase the price of FSD sometime later this year. ..The value of FSD is, I think, extremely high and not well understood by most people. It is basically currently ridiculously cheap, assuming FSD materialises." Source: Earnings call transcript

Monday, May 23, 2022

Vodafone Talks Up Opportunities in Europe and Africa


Vodafone reported a 2.6% rise in service revenues in the year to March 31st on an organic basis to 38.2 billion euros. However, in the final quarter of the financial year, the growth dropped to 2%. Nick Read, CEO of Vodafone said: "We are not immune to the macro economic challenges in Europe and Africa. But we are very well structured to deal with it." Source: Vodafone presentation.

Monday, May 2, 2022

Apple Expects Covid-Related Hit

Apple said its year-over-year revenue performance during the June quarter will be impacted by "supply constraints caused by Covid-related disruptions and industry-wide silicon shortages". It expects these constraints "to be in the range of 4 billion to 8 billion US dollars which is substantially larger than what we experienced during the March quarter."

"The Covid-related disruptions are also having some impact on customer demand in China," Apple added. "With respect to foreign exchange, we expect it to be a nearly 300 basis point headwind to our year-over-year growth rate. Additionally, we paused, all sales in Russia during the March quarter. This will impact our year-over-year growth rate by approximately 150 basis points."

In the March quarter, Apple's sales rose 9% year-on-year to 97.3 billion dollars, with product revenue up 7% and services revenue up 17%. The company said it now has more than 825 million paid subscriptions across the services on its platform, which is up more than 165 million from a year earlier. Source: Apple earnings call transcript

Friday, April 29, 2022

Amazon Leans Heavily On AWS

Amazon forecast that its revenue in the second quarter will be between 116 billion and 121 billion US dollars - growth of between 3% and 7% compared with second quarter 2021. This guidance anticipates an unfavourable impact of approximately 200 basis points from foreign exchange rates.

In the first quarter of 2021, Amazon's sales rose 9% (in constant currencies) to 116.4 billion dollars. The cloud services business AWS was the main growth engine - its sales leapt 37% year-on-year. 

Amazon's push into the gaming sector is gaining momentum. It reported that Lost Ark, the free-to-play multiplayer online game, exceeded 20 million global users and became the second-highest played title of all time by peak concurrent players on the distribution platform Steam. Published by Amazon Games in Australia, Europe, Latin America, New Zealand, and North America, the game was developed by Smilegate RPG, which is based in South Korea.

Amazon has also made its Amazon Luna cloud gaming service widely available. It includes the Prime Gaming Channel, where Prime members can access a rotating selection of games on Luna for free. Source: Amazon statements

Thursday, April 28, 2022

YouTube Sees Slowdown

Alphabet reported revenue growth of 26% year-on-year for the first quarter, at constant currencies, to just over 68 billion US dollars. The top line was held back by a relatively weak performance by YouTube, which saw advertising revenues rise by just 14% on a reported basis, after growing 25% in the previous quarter. The company said that direct response advertising on YouTube saw only "modest" growth.

Amid concerns about competition from Tik Tok, Sundar Pichai, CEO of Alphabet and Google, said: "YouTube Shorts is now averaging over 30 billion daily views -- that’s four times as much as a year ago. ... On average, viewers are watching over seven hundred million hours of YouTube content on televisions every day. And in the year ahead, we’ll give YouTube’s Connected TV viewers new smartphone-controlled navigation and interactivity features, allowing people to comment and share content they’re watching on television directly from their devices." Sources: Alphabet statements

Verizon Flags 5G Momentum

Verizon forecast that its reported wireless service revenue growth will now be at the lower end of the previously guided range of 9% to 10% for 2022. The telco is planning capital spending of between 21.5 billion and 23.5 billion US dollars in 2022, as it invests between 5 billion and 6 billion dollars in its C-Band 5G network.

For the first quarter of 2022, Verizon reported an increase in operating revenues of 2.1% year-on-year to 33.6 billion dollars.  Wireless service revenue grew 9.5%, reflecting the first full quarter of TracFone ownership. Verizon also reported strong demand for fixed wireless broadband. Source: Verizon statement

Sunday, April 24, 2022

Tesla Shrugs Off Supply Issues

Tesla reported a 81% year-on-year increase in revenues for the first quarter to 18.8 billion US dollars. It achieved this growth despite "global supply chain, transportation, labor and other manufacturing challenges, limiting our ability to run our factories at full capacity."

Tesla said energy storage deployments increased by 90% to 846 MWh, in the first quarter mainly driven by strong Powerwall deployments. "We are in the process of ramping production at a dedicated Megapack factory to address the growing demand," it added. However, solar deployments decreased by 48% to 48 MW. "This reduction was caused by import delays beyond our control on certain solar components. Solar roof deployments continued to grow, " Tesla said.

The carmaker is aiming to release FSD (full self driving) Beta software to all U.S. FSD customers before the end of this year. Initial release of FSD Beta to some customers in Canada started in March 2022. Source: Tesla collateral

Thursday, February 3, 2022

Meta Hits Competitive Headwinds

After announcing revenue growth of 21% (at constant currencies) for the fourth quarter of 2021, Meta forecast revenue growth of just 3% to 11% for the current quarter. That would equate to first quarter 2022 total revenue to be between 27 billion and 29 billion US dollars.

Meta (owner of Facebook) expects year-over-year growth in the first quarter to be impacted by headwinds to both [ad] impression and price growth.  "On the impressions side, we expect continued headwinds from both increased competition for people’s time and a shift of engagement within our apps towards video surfaces like Reels, which monetise at lower rates than Feed and Stories," explained Dave Wehner, CFO. "On the pricing side, we expect growth to be negatively impacted by ... Apple’s iOS changes ... and regulatory changes....and we’re hearing from advertisers that macroeconomic challenges like cost inflation and supply chain disruptions are impacting advertiser budgets." Source: Meta collateral

Qualcomm Lifted by 5G and IoT

Chip supplier Qualcomm reported a 30% year-on-year rise in revenues for the quarter ending December 26th to 10.7 billion US dollars. QCT revenues (from sales of chips, rather than licensing) rose 35%. Qualcomm anticipates revenues of between 10.2 billion and 11 billion dollars in the current quarter, which would represent an increase of between 29% and 39%.

Qualcomm estimated that shipments of 3G, 4G and 5G handsets grew 7% in calendar 2021, including approximately 535 million 5G handsets. For calendar 2022, the chip designer anticipates sales of more than 750 million 5G handsets.

Qualcomm reported IoT revenue growth of 41% year-over-year in the quarter ending December 26th across consumer, edge networking and industrial. "In consumer IoT, our early investments, collaboration with Microsoft and the recent acquisition of NUVIA uniquely positions us to drive the PC industry transition to ARM-based computing for next-generation connected laptops," Qualcomm said. "We're also seeing strong growth in premium and high-tier Android tablets, further highlighting the convergence of mobile and PC."

The company also reported that its "Wi-Fi 6 immersive home platforms" are seeing significant growth in China, one of the fastest-growing markets for Wi-Fi 6 for both retail and carrier deployments. It also said that "5G as wireless fiber" continues to gain scale and expand globally, while combined smart utility meter, tracking robotics and retail revenues more than doubled over the past year. Source: Qualcomm collateral

Wednesday, February 2, 2022

Vodafone Pleased with Performance


Vodafone reported organic revenue growth of 3.7% year-on-year for the quarter ending December 31st to 11.69 billion euros.  It said that service revenues grew 0.5% in Europe and 4.4% in Africa. Source: Vodafone collateral.

Alphabet on Cloud Nine

For the fourth quarter of 2021, Alphabet reported a 33% increase in consolidated revenues to 75.3 billion US dollars in constant currency. In the fourth quarter, Google Cloud revenue grew 45% year-over-year to 5.5 billion dollars, while YouTube advertising revenue grew 25% to 8.6 billion dollars.

Alphabet said YouTube has just hit 5 trillion all-time views and now generates 15 billion views each day globally.  The group also said its "Other Bets" division, which includes self-driving car start-up Waymo, made an operating loss of 5.3 billion dollars in 2021, compared with 4.5 billion in 2020. Source: Alphabet collateral