Apollo Go Ramps Up Rides Threefold

Apollo Go, Baidu’s autonomous ride-hailing service, provided about 660,000 rides in the first quarter of 2023, up 236% year-on-year and 18% quarter-on-quarter. That implies Apollo Go is now providing more than 55,000 rides a week, compared with 10,000 for Waymo, which is owned by Alphabet.

On March 17th, Apollo Go received Beijing's first permits to operate ride-hailing services with no driver or safety operator in the vehicles.  Apollo Go is now allowed to provide fully driverless ride-hailing service in the Yizhuang region of Beijing.  As a result, Apollo Go is now providing  fully driverless services in three cities: Beijing, Wuhan, and Chongqing. 

In Wuhan, where Apollo Go first received the permits to provide such services on public roads in August 2022, it now has more than 135 driverless vehicles, and more than one-third of the paid rides Apollo Go provided were in fully driverless vehicles. 

Apollo Go said the release of the RT6 vehicle (scheduled for the second half of 2023) will help to reduce hardware costs. CNBC has reported that the RT6, which has a detachable steering wheel, costs 250,000 yuan (about 37,300 US dollars) to produce.  Source: Baidu earnings

Vodafone Loses Customers in Europe

 

Vodafone reported some significant customer losses for the year to March 31, 2023, as it shed mobile contract, broadband and TV contracts in Europe. However, IoT connections continued to ruse, as did usage of the M-Pesa financial services proposition in Africa. Source: Vodafone's results

Telefónica Talks Up Tech Expertise

Telefónica reported a 4.9% year-on-year increase in revenue for the first quarter of 2023 on an organic basis, as it fibre-to-the-home connections rose 16% to 14.8 million.

Telefónica said it now has a 5G standalone network in Brazil and plans to launch 5G standalone in UK, Germany and Spain during 2023. It  also plans  to  commercially launch static network slicing in 2023 for business customers in its main markets, while preparing to make network APIs commercially available in line with the GSMA's  Open Gateway Project.

In the first quarter, Telefónica's Tech division increased its revenues 27% on a like-for-like basis. The division, which now employs more than 6,000 professional IT staff, recorded revenue of 429 million euros for the quarter. It is piloting an AWS Wavelength Zone at the edge of its network in Madrid, which businesses can use to test applications that require low latency access to AWS compute and storage services. 

In Brazil, Telefónica's Vivo unit now has more than two million subscribers for its OTT video service. It also offers Vivo Money and Insurance, as well as health and e-learning services.  Source: Telefónica collateral

Deutsche Telekom Drives FTTH Uptake

Deutsche Telekom reported a 0.5% fall in group revenues on an organic basis for the first quarter of 2023, as equipment sales in the US declined 20% year-on-year.  Group service revenue was up 2.6% on an organic basis. 

DT ascribes its growth to "its network leadership". Its FTTH (fibre-to-the-home) network now passes almost 14 million European homes, up by 3.1 million households year-on-year.  In Germany, DT claims to cover 95% of the population with 5G, up from 92% a year earlier. 

As the group expands its FTTH footprint in Germany to cover 10 million homes, DT is still targeting an average capex cost of 1,000 euros per home passed, despite inflation.

However, only 769,000 of the 5.7 million homes passed by the FTTH network today in Germany are actually FTTH customers. That represents a penetration of about 13.5%.

Timotheus Hottges, CEO of DT, said that the group has to drive that penetration figure up to the "high 30s" in 2024 (presumably for new homes passed). "We have to find a way that we can shut down our copper network," he added. "We are working on this with the regulator. And the moment where we can migrate all our customers into the FTTH network, that would definitely help us from the utilisation amortisation big time as well from the energy costs and other things. This would be the game changer for us. But it's too early to speculate when that is taking place. But we are discussing and ran some pilots here in Germany how this migration can take place."

DT is also looking to increase its TV subscribers in Germany by about 50% to 6 million, having bought the European Championship rights for 2024 for Germany exclusively. Christian Illek, the CFO, described TV as a very profitable business. Source: DT collateral

MTN Reports Rises in Digital and Fintech Revenue

MTN said its instant messaging platform ayoba now has 25 million monthly active users, about four years after it was first launched. That is up from 20 million monthly active users in December 2022. MTN said ayoba's key territories are Nigeria, Cameroon, South Africa, Ghana, Côte d’Ivoire, Uganda and The Republic of Congo.

MTN reported a 15% increase in group service revenue (on a constant currency basis) for the first quarter of 2023 to 52.8 South African rand (2.9 billion US dollars). Data revenue rose 28% and fintech (mobile money,  insurance, airtime lending and e-commerce) revenue by 18%. MTN said active mobile money users climbed 5% to 61.7 million, while data traffic increased by 19.3% to 3,221 PB. Fintech transaction volumes increased by 39% to 4.1 billion, with transaction value up by 65% to 65.7 billion US dollars.

MTN said it suffered 90 days of load-shedding (power cuts) during the first quarter in South Africa, compared to 14 in the same quarter of 2022, which heavily disrupted network availability. In this context, MTN SA "achieved relatively resilient service revenue growth of 1.3%, with voice (down 16%) being the key drag on overall performance." In response, MTN SA teams upgraded additional cell sites with batteries and started piloting solar solutions on a limited number of sites, as well as deploying additional security solutions where there is high risk of theft or vandalism. 

In Nigeria, digital revenue grew by 43%, as the active user base rose by 58% to 11.7 million, led by  ayoba, which added over 1.5 million users and ended the quarter with approximately 6.7 million active users. 

MTN said the Iran Internet Group, of which it owns 29.5%, continued its strong performance in 2023, with ride-hailing app Snapp ranking among the top ride-hailing apps globally and reaching 4.3 million daily rides. Last-mile delivery service Snappbox generated almost 350,000 daily orders, while food delivery app Snappfood grew revenue by 77%. Within Middle East Internet Holding (MTN owns 50%), ride-hailing service Jeeny continued its strong growth with almost 10,000 daily rides, MTN added. Source: MTN report

Demand for TV Drives Growth for SK Telecom

SK Telecom reported a 2.2% year-on-year rise in revenue to 4.4 trillion Korean won (3.4 billion US dollars) for the first quarter of 2023. It attributed the rise to 5G and pay TV subscriber growth and revenue growth in its B2B businesses, particularly its data centre business.

SK Broadband claimed to have achieved the highest net additions of IPTV and broadband subscribers in the market. At the end of the first quarter, SK Broadband’s pay TV subscribers and broadband subscribers stood at 9.4 million and 6.76 million, respectively, up from 9.1 million and 6.61 million a year earlier. Source: SK Telecom statement  

Waymo Providing 10,000 Trips Per Week

Waymo, the self-driving ride-hailing company owned by Alphabet, said it is now providing more than 10,000 trips per week to public riders, not including employees. Announcing a major expansion to its service areas in Phoenix and San Francisco, Waymo said it intends "for those numbers to accelerate rapidly to 10 times that scale by next summer."  That would imply 100,000 trips a week, suggesting Waymo could begin to start generating significant revenue in 2024.

Waymo says more than 150 million people use ride-hail services in the U.S. However, the company has yet to receive a permit to charge for its services in San Francisco.

Waymo is also now allowing up to four passengers in its vehicles, while looking to expand its operations in Los Angeles. Source: Waymo blog post

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Uber Points to the Power of the Platform

Uber expects its gross bookings to rise between 18% and 22% in the second quarter of 2023 to between 33 billion and 34 billion US dollars, excluding freight and on a constant-currency basis. Including freight, it expects gross bookings to rise 15% to 19% on a constant-currency basis.

In the first quarter, Uber saw constant-currency gross bookings up 22% year-on-year, with revenue rising 33% on a constant currency basis to 8.8 billion US dollars, fuelled by a change in the business model for its UK mobility business. 

Dara Khosrowshahi, CEO of Uber, talked up the economies of scope between the delivery business and the mobility business. He said: "The audience that we have on the mobility business is the largest audience in the world in terms of any of our mobility competitors....And we're the only ... scale players who are upselling from mobility to delivery, and then vice versa. 

"We have a source of low-cost traffic, significantly low-cost traffic. Our mobility business sends us more customers than we get from Facebook and Google and Snap and all of these different platforms combined. And that's just a structural advantage that we have against the overall market, certainly, against the competitors.

"Advertisers are up 70% year on year using our platform. And you get some pretty powerful economic drivers that's allowing us to deliver the kinds of bottom line that you saw on our delivery business, which is well ahead of estimates, while getting category position in nine of our top 10 markets on a global basis."

In its delivery business, Uber has entered into new partnerships to support a shift to electric modes of transport, including working with Gachaco to provide rapid battery replacement for three-wheelers in Japan; Lumala to improve e-cycle availability for Uber Eats couriers in Sri Lanka; and HumanForest to give Uber Eats couriers full access to its e-bike and e-moped fleet in London. 

It has also entered into a multi-market commercial partnership with Tembici, a leader in micromobility across Latin America, to make bikes and electric bikes available directly in the Uber app. Source: Uber earnings collateral

Verizon Cites Strong Demand for FWA

Verizon Communications added 393,000 fixed wireless connections in the first quarter of 2023, up from 379,000 in the prior quarter.

Hans Vestberg, CEO of Verizon, told investors that broadband is a major growth area for the company across the consumer and business segments. "We achieved the highest net adds in over 10 years, adding 437,000 total net adds within the quarter, including 67,000 net adds from Fios (fibre-to-the-building). We are very pleased with the Fios performance with net adds up 12% year-over-year. For fixed wireless access (FWA), we're seeing growth quarter after quarter after quarter with 1.9 million subscribers at the end of the first quarter, fixed wireless continues to scale and contribute increasingly to our revenue performance.

"Our business customers are increasingly turning to fixed wireless access as their primary source of broadband connectivity. Won over by the reliability and the overall value of the product. In addition to taking share from our competitors, we're also seeing new use cases across all of our customer groups leveraging the flexibility of the product to expand beyond what traditional wired broadband can do." Source: Verizon earnings transcript

Google's Advertising Business Feels the Heat

Alphabet, Google's parent company, said its revenues rose 6% year-on-year on a constant currency basis in the first quarter of 2023 to 69.8 billion US dollars. Strong growth in its cloud business offset declines in Google Network advertising and YouTube ad revenues. The Google Network, which includes revenues generated on Google Network properties participating in AdMob, AdSense, and Google Ad Manager, had a particularly weak quarter with revenues declining more than 8% source: Alphabet statement

China Mobile's ARPU Under Pressure

China Mobile reported a 10% year-on-year rise in revenue for the first quarter of 2023 to 250.7 billion yuan (35 billion US dollars), but mobile ARPU rose only slightly and wireline ARPU fell. Source: China Mobile results

Signs of Slowdown for Tesla

Tesla reported that it produced 440,000 vehicles and delivered 422,000 vehicles in the first quarter of 2023.  In the fourth quarter of 2022, it produced 439,000 vehicles and delivered 405,000 vehicles. That represents a marked slowdown from 2022, when vehicle deliveries grew 40% to 1.31 million.

In 2022, total revenue grew 51% year-on-year to 81.5 billion US dollars.  Tesla said in January that it had released its Full Self Driving beta software to the 400,000 customers who had bought it.  Tesla is hopeful that the successful deployment of self-driving systems will dramatically increase the value of its vehicles to buyers.

There are also signs that the energy storage business is beginning to come of age - deployments increased by 152% year-on-year, for a total deployment of 6.5 GWh in 2022. Tesla said demand for its storage products remains in excess of its ability to supply. It is ramping up production at its dedicated 40 GWh Megapack factory in Lathrop, California.

The solar panel capacity installed by Tesla in 2022 increased by just 1% to 348 MW. 

Sources: Tesla collateral

Waymo Passes One Million Milestone

Waymo, Alphabet's self-driving car unit, said it has exceeded one million miles on public roads with no human behind the wheel.  Waymo said these miles were driven across multiple U.S. cities, including the densest parts of San Francisco and Phoenix, where it is now serving riders around the clock. 

During these first one million miles, Waymo said there were no reported injuries, and only two collisions that met the criteria for inclusion in NHTSA’s database for car crashes, called Crash Investigation Sampling System.  In the more severe of the two collisions, a Waymo vehicle was hit from behind by another car whose driver was looking at their cell phone while approaching a red light.

Waymo said none of the collisions or contact events happened at intersections, where most injury-causing and fatal collisions usually take place, nor involved vulnerable road users such as pedestrians and cyclists.

"The results we’ve shared today, in combination with our previously reported data, fatal crash reconstruction, and collision avoidance testing studies, underscore the Waymo Driver’s ability to reduce injuries and fatalities on the road," Waymo said.  Source: Waymo statement

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Telefónica Sees Steady Growth Ahead

Telefónica forecast it will achieve low single digit revenue organic growth in 2023, after reporting organic revenue growth of 4% for 2022. Its total revenue, including its 50% share in the Virgin Media O2 joint venture, in 2022 was almost 46 billion euros. Source: Telefónica collateral

Deutsche Telekom Shrugs Off Unsteady Conditions

 

Deutsche Telekom reported a 3.7% organic increase in service revenue for 2022 despite "unsteady conditions". Its total revenue climbed 6.1% to 114.4 billion euros, as it continued to add customers on both sides of the Atlantic. Source: Deutsche Telekom statement

Vodafone Tripped Up By Europe

Vodafone reported organic service revenue growth of 1.8% in the quarter ending December 31, compared with 2.5% in the previous quarter. It blamed declines in Germany, Italy and Spain, as well as lower roaming growth and "phasing of business revenue" in the previous fiscal year. Source: Vodafone collateral