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Segment

Mobile World Congress Vodafone CEO Calls For Tougher Regulation Of Tech Giants

5-Year Virtual Multichannel Revenue Forecast Underscores Segment's Opportunities

Financial Consumer Watchdog's Powerful Investigative Tool Faces Overhaul - Episode 26

Wake Up Savers, Watch Out Banks - CDs Back In Vogue - Episode 25

SNL Banker

Technology, Media & Telecom
Mobile World Congress Vodafone CEO Calls For Tougher Regulation Of Tech Giants

Highlights

The following post comes from Kagan, a research group within S&P Global Market Intelligence. To learn more about our TMT (Technology, Media & Telecommunications) products and/or research, please request a demo.

The CEO of British mobile giant Vodafone Group Plc urged telecom regulators to level the playing field between mobile operators and global tech companies such as Facebook Inc., Alphabet Inc., Amazon.com Inc., Microsoft Corp., and Apple Inc.

More lightly regulated internet platforms such as Facebook and Instagram are "the biggest telcos in the world" due to their reach, Vodafone CEO Vittorio Colao said during a February 26 keynote at the annual Mobile World Congress.

However, tech companies have far fewer obligations, particularly around customer data, Colao said in Barcelona.

European telecom players, including cable giant Liberty Global plc and France's Orange SA, have long complained about levels of regulation within the sector. With tech groups increasingly launching rival communications services, such as free messaging, voice and social media services, on the back of telecoms groups' infrastructure, telco industry leaders are becoming more vocal.

"We cannot be asked to invest if we have different rules from the others," Colao said.

Digital disruptors have cost European operators as much as €100 million in profit every day for the past decade, according to a 2017 report by Accenture Strategy on behalf of the European Telecommunications Network Operators' Association.

Without more regulatory controls, Colao added there is a risk of tech companies becoming too "big and powerful."

Technology was the largest sector in terms of market cap in 2017, according to PricewaterhouseCoopers research. Of the top 100 companies globally, tech accounted for $3.582 trillion, compared with $859 billion for telecommunications.

While competing with internet companies has thus far been vital for telcos to stay relevant, regulatory and pricing pressure has forced them to look to adjacent areas such as OTT, mobile video, and smart home applications for new sources of revenue and better margins.

With European telcos already stretching their investment capacity, however, this has delivered mixed results. Investing in content is proving costly for operators in a market dominated by Netflix Inc. and Amazon, while obstacles to network investment risk slowing down developments in the internet of things.

Colao said: "The returns of the industry are not good enough today ... we need a level playing that allows both investment and competition at the same time."



5-Year Virtual Multichannel Revenue Forecast Underscores Segment's Opportunities

Highlights

The following post comes from Kagan, a research group within S&P Global Market Intelligence.

To learn more about our TMT (Technology, Media & Telecommunications) products and/or research, please request a demo.

Jul. 18 2018 — Driven by subscriber gains from AT&T Inc.'s DIRECTV NOW and DISH Network Corp.'s Sling TV and assisted by a batch of new arrivals in 2017 that includes Hulu LLC's Hulu with Live TV and Alphabet Inc.'s YouTube TV, Kagan estimates virtual multichannel services will reach nearly $2.82 billion in overall revenue in 2018, rising to more than $7.77 billion by 2022.

The large gains we project reflect the relative fledgling status of a market that is positioned to take advantage of widespread internet access by presenting new, alternative choices to traditional multichannel operators.

While the growth of virtual services is expected to dampen the projected decline in customers with some form of live linear channel package, we project the shift to have significant revenue implications for the market due to markedly lower average revenue per user rates associated with the new services.

Future developments could impair the segment over the five-year outlook. For instance, legacy distributors could revisit skinny bundles at competitive price points and leverage their existing customer relationships to undercut virtual providers.

Of note, traditional multichannel operators also providing wireline broadband have additional leverage with broadband bundles. For this category of ISPs, broadband could also be leveraged through the creation of prioritization lanes given the FCC's net neutrality reversal.

Recent M&A activity also clouds the future, led by the pursuit of key 21st Century Fox Inc. assets by Walt Disney Co. and Comcast Corp.

Disney has been quite transparent about the rationale behind the move. The media juggernaut plans to launch direct-to-consumer services leveraging its vast content libraries, including some of the world's most valuable franchises such as Marvel and Star Wars.

Although Comcast is playing its strategy cards closer to the vest, its pursuit of Sky PLC and 21st Century Fox, combined with the company's foray into wireless telecommunications, intimate wide-scale video-streaming plans.

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Listen: Financial Consumer Watchdog's Powerful Investigative Tool Faces Overhaul - Episode 26

Jul. 17 2018 — Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau, has changed the way the agency operates and reduced enforcement actions against banks. Now, Mulvaney is turning his attention to a powerful tool used by the agency called the civil investigative demand. S&P Global Market Intelligence colleague Brian Cheung discusses how the CFPB uses the tool and what changes could mean for banks and consumers.

No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P).


Listen: Wake Up Savers, Watch Out Banks - CDs Back In Vogue - Episode 25

Jul. 17 2018 — CD specials are back. More banks are offering the promotional rates on CDs, or certificates of deposits, to attract new customers. While that is good news for savers, it means funding costs likely will rise even more for banks. The episode shines a light on recent CD rates offered by banks and features commentary on smart deposit strategies from Bruce Hinkle of StoneCastle Cash Management and KeyCorp CFO Donald Kimble.

No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P).


Watch: SNL Banker

Jul. 10 2018 — Transform internal data into vital insight with SNL Banker from S&P Global Market Intelligence. Our solution integrates seamlessly with internal systems to give U.S. community banks and credit unions greater visibility into finances and operations