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Technology, Media & Telecom

the-state-of-global-4g

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

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

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

SNL Banker


the-state-of-global-4g

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.

Feb. 01 2018 — The following post comes from Kagan, a research group within S&P Global Market Intelligence.

Of the 42 4G countries covered by Kagan, a research group within S&P Global Market Intelligence, Denmark boasts the world's highest 4G penetration rate at 83% of total mobile subs, followed by South Korea at 76%, and Australia at 65%.

Twelve of the 42 countries in our analysis registered 4G penetration greater than 50% of total subs, and while each is highly differentiated economically and politically, their respective governments share an interest in deepening 4G deployment. Asia-Pacific and Scandinavian countries dominate this club of greater than 50% 4G penetration, sharing relatively small geographic footprints, favorable economic conditions and populations concentrated in urban cities. These countries also lead the world in 5G development and testing, and are home to some of the world's largest mobile equipment manufacturers for TMT.

Elsewhere in the world, 4G deployment and adoption continues to expand but at vastly different rates. Economic growth is a key driver of mobile technology development and adoption worldwide, demonstrated in our analysis using GDP per capita as proxy for economic growth in each country. GDP per capita is an important, though imperfectly correlated, predictor variable associated with 4G penetration, and charting it against 4G penetration in each country yields an intuitive result.

Higher GDP per capita is roughly correlated with greater 4G penetration. This correlation is particularly tight at the bottom end of the income scale. This exercise surfaces some interesting departures from the expected trend line, highlighting why economics alone cannot explain 4G penetration. Notable countries include Switzerland, China, Turkey, Poland, UAE, and Israel.

    • Switzerland mobile profile - In spite of having the highest GDP per capita in our data set, estimated 4G penetration was just 34% at year-end 2016, as operators prioritized LTE-A network buildouts that were coming online in mid-2016. We expect 4G penetration to rise markedly in 2017.
    • Turkey mobile profile - Quick adoption of 4.5G (LTE-A) services in Turkey happened amid challenging economic conditions and in parallel with political disturbances, multiple terrorist attacks and a failed military coup d'etat. In August 2015, all three Turkish operators Turkcell, Turk Telekom (previously Avea) and Vodafone Group Plc's Vodafone Turkey participated in the LTE-A spectrum auction held by the country's regulator, Information and Communication Technologies Authority (BTK), in preparation for 4.5G service rollout by April 2016.
    • Poland mobile profile - Poland's 4G deployment was hampered by bumbled auctions, but recent success in spectrum allocation and infrastructure buildouts has catapulted Poland's 4G adoption rate beyond expectations set by the country's economic conditions.
    • China mobile profile - Mobile operators are moving to pool their telecommunications towers and assets after the Chinese government required them to form a tower-sharing joint venture. This is in line with the government's "Broadband China" plan, which aims to achieve 85% 3G/4G rural penetration by 2020.
    • United Arab Emirates mobile profile - Penetration of 4G is estimated to be fairly low with only 20% of total mobile subs, or 3.8 million mobile subs using 4G in 2016. At 10.5 million subs, 3G is estimated to be the most used means of mobile connectivity, with 55% of total mobile subs, down from 59% compared to year-end figures in 2015.
    • Israel mobile profile - Subs of 4G doubled in 2016 to 1.1 million, or 11% of the market, which indicates demand for data is increasing.
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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: 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).


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).


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