At the UBS Global Media and Communications Conference in New York, industry leaders shared insights into the evolving landscape driven by new technologies and changing consumer trends. We spoke to several of the companies and UBS experts in attendance to recap the key themes to watch.
At the UBS Global Media and Communications Conference in New York, industry leaders shared insights into the evolving landscape driven by new technologies and changing consumer trends. We spoke to several of the companies and UBS experts in attendance to recap the key themes to watch.
Shifting focus: from subscriber growth to profitability
Streaming services are increasingly focused on profitability, with the need for revenue replacing the quest for rapid growth at all costs. Thus, many streaming services are refining their content strategy with this focus in mind. Fox Entertainment and Nexstar Media Group noted their focus on superior programming as a key differentiator. Streaming platforms have further exemplified how customer engagement translates to pricing power. This is especially true with news and sports content making it critically important to achieve profitability, programming must focus on high-quality revenue drivers.
Fiber build kicking into high gear
Fiber internet, using fiber-optic cables, can reach speeds of up to 10 Gigabits per second* sending data about 70% the speed of light. UBS Research believe the US is in the midst of a 5-year fiber-to-the-home (FTTH) land grab that will see record levels of deployment in 2025 and 2026, given renewed wireless carrier sponsorship and unprecedented federal funding. Fiber remains the main competitive threat to cable's broadband franchise, with the advantages of FTTH infrastructure potentially outweighing the incumbent cable stronghold.
We expect fiber to the home to grow from ~50% of U.S. households to ~80% by YE28.
Wireless remains resilient as 5G reshapes the consumer experience
One of the biggest topics of conversation at the UBS conference was on wireless connectivity. "The carriers presenting at the conference sounded bullish on wireless" observed Kelsey Perselay, TMT Sector Sales Specialist, UBS.
With continued market resiliancy, low upgrade rates, low churn and moderating CapEx all contributing to an increase in interest from investors, added Perselay.
Kelsey Perselay, Telecommunications and Media Sector Specialist, UBS
T-Mobile and other industry players highlighted the substantial growth driven by the 5G network. Jud Henry, Investor Relations of T-Mobile, says "we are already seeing the early dividends of 5G," more than just faster download speeds, 5G is actually "giving customers more choice in the broadband market."
While it is clear that 5G means faster networks, what's less clear is how these companies will fully monetize this transformative technology. Henry believes "there is still more to come" as the technology continues to evolve and that "opportunities within the enterprise and government space" are on the horizon.
Jud Henry, Investor Relations, T-Mobile
Telecommunications: a shift towards zero latency
The telecommunications space has seen an increased focus around connectivity and modern fiber but "that's just the start" says Chris Stansbury, CFO of Lumen Technologies. Stansbury continues, "Customers are looking to move massive quantities of data quickly with zero latency."
Lumen believes this can be achieved via their digital transformation program, which provides NaaS (network as a service) solutions. Stansbury says that this "allows customers access in a way that has never been available through telecom before.”
