with the collapse of French Consolidation, UK appears to be a good opportunity to invest in telcos, the Hutch/O2 deal still look at risk but can create some opportunities, we can even see some French players look at the market....have a look to this Barcap Note.
- Iliad’s Niel Met With EU’s Vestager on U.K. Market: L’Express (31/03)
- Hutchison Deal Remedies May Leave U.K. Door Open for New Entrant (07/04)
- CK Hutchison Said to Offer New Concessions on O2 Deal in U.K. (07/04)
- Liberty Global's O2 Deal in U.K. Would Shift BT, Vodafone Status (19/04)
(BarCap) UK Telecom Services : Positive on the Future of UK pricing
We see the UK Telco market continuing to offer sector-leading growth in the coming years, potentially a somewhat contentious view given Ofcom/Government desire to make the structure of UK pricing more transparent, and the likely failure of the 3UK/O2 deal (per press reports). We argue that although pricing changes could somewhat reduce the opportunity for price increases, they could actually reduce competitive pressure and churn, as could the move towards convergence – boosting profitability. We see BT best placed, with Fibre continuing to drive material upside.
Future of UK post Hutch/O2 deal. In our recent note, Looking at life beyond O2/3UK, we argued that Hutchison faces an increasing battle to get the UK deal approved. With a standalone Hutchison running out of spectrum, O2 historically underinvested and Vodafone currently appearing to lack a convergence presence, we would see BT as very well placed to execute on a converged Fixed-Mobile-TV strategy. For TalkTalk and Sky, both already have routes to entering mobile via their O2 wholesale contracts, and as such have routes to offering converged services (albeit on “old” MVNO economics).
See Full note attached