back to article Virtual monopoly on UK cell towers and TV masts up for sale

UK cellular tower and TV mast radio specialist Arqiva has been put up for sale with an optimistic price of between £5bn and £6bn, but its two core areas of business both have questionmarks hovering over them. Any mobile tower company taking a long hard look at 5G has to decide if it can get heavily into a new class of platform …

  1. Anonymous Coward
    Anonymous Coward

    "The truth is that the strong British Pound..."

    Did I miss something? I thought it had recently dropped a bit...

    1. David Roberts

      Re: "The truth is that the strong British Pound..."

      The UKP couldn't tear the skin off a rice pudding at the moment.

      Anything priced in UKP is a bargain buy at the moment.

      1. phuzz Silver badge
        Windows

        Re: "The truth is that the strong British Pound..."

        I'm not sure why David is getting all the downvotes for stating a fact.

        The pound is doing rubbish against the US dollar, it's not doing quite as rubbish against the Euro, but it's still pretty bad. In fact, I can't find a currency that the pound is doing better against than it was a year ago.

        However, if you prefer your alt-facts, then the pound is doing just great and brexit is going to be the best thing ever, ok?

        1. Anonymous Coward
          Boffin

          Re: "The truth is that the strong British Pound..."

          The pound is doing rubbish against the US dollar,.....

          That depends on your definition of "rubbish". As we are a country with a massive trade and balance of payments deficit, the devaluation of sterling should be welcomed. Obviously that makes imports more expensive, but equally it makes our exports more competitive, and gives domestic industry a relative advantage in the home market. We'll all see the effect of this in price inflation over the next year, but that's a sad necessity of our prior enthusiasm for buying foreign goods on tick, and exporting jobs en masse through offshoring.

          In fact, everybody's responsible for a piece of the action that necessitated the devaluation - government for spending more than it taxed, and borrowing the rest from furreigners; the commercial sector for exporting jobs, reckless borrowing and lending; And individuals, happily running up debt to buy foreign trinkets.

          if you prefer your alt-facts, then the pound is doing just great

          It most certainly is. I don't mind that Audi buyers are having to pay 20% more, or holidaymakers to Disneyland Florida having to forego a few rides and a couple of excursions - sterling never merited the previous exchange rate whilst the behaviours described above were going on. The adjustment isn't comfortable, but it is a good thing.

        2. Chris Evans

          Re: "The truth is that the strong British Pound..."

          Yes buying something NOW in GBP is cheap. But the problem for the current owners is that they bought years ago. Any income sent out of the UK will now be lower when converted Canadian Dollars etc.

          Whenever there is currency movement there are just as many losers as winners!

  2. Anonymous Coward
    Anonymous Coward

    Well...

    This will no doubt work out well for the workforce. Yet more UK tech company layoffs on the horizon.

    1. Anonymous Coward
      Anonymous Coward

      Re: Well...

      Exactly right. Lay offs announced this week. Arqiva trying desperately to keep it quiet.

  3. Mike Shepherd
    Meh

    Linear TV?? . . . OTT??

    Is this an article for some specialised group?

    1. Anonymous Coward
      Anonymous Coward

      Re: Linear TV?? . . . OTT??

      OTT is probably for the liberal sprinkling of jargon: Over The Top.

      Indeed, the author of this article needs to relearn how you write articles. In the era of the Internet you can indeed get away with not expanding an acronym on first use, but only if you use that novel* invention, the hotlink. Readers need to have a way to translate TLAs into something meaningful in the context - especially if you take into account that TLAs can have different meanings depending on industry and sometimes even branches of the same industry.

      * "Novel" in that it's only been invented more than 25 years ago...

      1. John Brown (no body) Silver badge
        Coat

        Re: Linear TV?? . . . OTT??

        "OTT is probably for the liberal sprinkling of jargon: Over The Top."

        Isn't that the TV show Chris Tarent used to host? I'd have described that as chaotic rather than linear.

        Coat, in case I get gunged or pied!

    2. Jon 37

      Re: Linear TV?? . . . OTT??

      "Linear TV" == normal TV that is a TV channel you can tune in and watch live. Typically received through a TV aerial or satellite dish, although BBC IPlayer's "Watch live" feature is also "Linear TV".

      "OTT" == "Over The Top" == TV delivered through the Internet. E.g. BBC IPlayer, Netflix, Amazon Prime Video, etc.

      The author's point is that we're watching so much TV through the Internet, so there are less viewers of broadcast TV, so: (A) the adverts on broadcast TV bring in less money, so the ad-funded TV channels have less money to spend on renewing broadcast TV transmission contracts, and (B) the ad-funded TV channels are more likely to cancel their broadcast TV transmission contracts and go Internet-only, and (C) the ad-funded TV channels are more able to threaten to go Internet-only to get a better deal on their broadcast TV transmission contract. So for all those reasons, the masts that transmit broadcast TV are less valuable.

      1. Anonymous Coward
        Anonymous Coward

        Re: Linear TV?? . . . OTT??

        (C) except the BBC that probably need this more than most, along with the remaining Radio Broadcasters (although this revenue stream is probably much lower).

      2. AndrueC Silver badge
        Happy

        Re: Linear TV?? . . . OTT??

        I think OTT is a bit more than just the broadcast medium being the internet. It's also about the viewer having control over what and when they watch. They don't have to wait until the broadcaster makes the next episode available and don't have to set aside a specific time to watch it. Instead the entire 'box set' is available from day one and episodes can be watched as/when the viewer chooses.

        It's the next logical step up from DVRs. DVRs allow you to easily time shift everything so you're no longer tied to the broadcast schedule but you do still have to wait until the broadcaster choose to show each episode.

        It'll be interesting to see how this pans out. I've long been a fan of Sky+ and haven't watched live TV for many years now. But I've never really caught on to box sets because after a couple of episodes in a row I start to feel burnt out and fancy a change. Given how relatively poor most programming is I'm nearly always happy to wait for the next one to turn up. But then I'm fifty in two weeks. Apparently the young whipper-snappers hate having to wait for anything and perhaps their pathetic attention span means they have to watch back to back or risk forgetting what happened a week ago.

        Whatever. Apparently the future of 'TV' is going to more akin to visiting a video library. Aside from truly live events like news and sports everything is 'just there' to be watched. Oh brave new world!

  4. paulf
    WTF?

    I seem to have missed something

    As mentioned in other comments above, this passage, "The truth is that the strong British Pound...", seems to have missed the whole GBP dropped from $1.45 to $1.24 ish post 23 June 2016. It's also dropped against the Euro by a similar degree. Perhaps it would be useful if the article explained what currency it considers the GBP to be strong in comparison to?

    "Arqiva, so much a dominant force in the UK, that it might be considered a monopoly,". I thought it was a monopoly in that it owns the former BBC and IBA transmitter networks meaning there is little significant other competition for renting space on masts (and mast building being capital intensive means a high barrier to entry for new competitors).

    "Macquarie bought the broadcast business of what is today Virgin Media in 2004, paying £1.27bn; in 2005 it acquired BBC Broadcast for £166m and then in 2007 bought Crown Castle’s tower and broadcast properties as National Grid Wireless for £2.5bn"

    The NTL Broadcast stuff (Virgin Media) was the former IBA transmitter network. Crown Castle (CTXI) owned the former BBC Transmission business which was privatised in 1997-ish. The reference to BBC Broadcast is odd though - this was sold by the BBC 2005-ish to become Red Bee Media (play out, channel management, subtitles and the like) and is now owned by Ericsson. It doesn't seem to have been owned by Arqiva.

    1. Anonymous Coward
      Anonymous Coward

      Re: I seem to have missed something

      RedBee was Macquarie http://www.campaignlive.co.uk/article/524558/bbc-broadcast-renamed-red-bee-media-macquarie-acquisition

      1. paulf
        Headmaster

        Re: I seem to have missed something

        @AC "RedBee was Macquarie"

        Fair point - Arqiva and Red Bee both had the same parent in Macquarie but (and here's the pedant point) that's not the same as Red Bee being part of Arqiva and thus a justifiable part of the Arqiva valuation in the article. This isn't justified as it appears it wasn't the case - the two companies were never merged into a single organisation by Macquarie they just shared the same parent company.

  5. EnviableOne

    Anyone else think merger with a BT free Openreach to Make UK Comms Grid?

    1. Doctor Syntax Silver badge

      "Anyone else think merger with a BT free Openreach to Make UK Comms Grid?"

      Here's an alternative thought. BT float off Retail and the various odd non-comms bits that they're crap at under some vacuous names such as P2, O3 (Ozone?) etc so that the BT is now just the old OpenReach business. Then they buy Arqiva.

      1. Peter Curnow-Ford

        what would you suggest they do with EE in that scenario?

  6. Uberseehandel

    Cost £4 Billion, to which add £ 3 Billion of debt = £7 Billion to get out. Not a chance.

    Shrinking market - the only reason for anybody to pay more than change for this financial equivalent of a black hole is if the purchaser has an alternative use for the existing towers, such as automotive connectivity, or emergency networks.

  7. Red Bren

    Fire sale of fully sweated asset?

    Arquiva's mistake was to try and squeeze as many channels as it could onto its multiplexes, sacrificing broadcast quality in the process.

    The advertising budget of UK PLC is not infinite, there's only so many eyeballs in the UK and they're only going to be watching one channel. Doubling the number of available channels doesn't double your income; quite the opposite if you end up just broadcasting phone-in talent shows in low definition. Offer high quality content in high definition over a simple delivery system and viewing figures will increase.

    1. Anonymous Coward
      Anonymous Coward

      Re: Fire sale of fully sweated asset?

      Each of those channels is paying Arquiva £10m/year.

      1. Red Bren

        Re: Fire sale of fully sweated asset?

        "Each of those channels is paying Arquiva £10m/year."

        At the moment they are, but will they keep paying if there's an alternative delivery method at a similar quality level and a lower price?

        1. John Brown (no body) Silver badge

          Re: Fire sale of fully sweated asset?

          "At the moment they are, but will they keep paying if there's an alternative delivery method at a similar quality level and a lower price?"

          As yet, there isn't. And not likely to be in the near to medium future unless you think BT and VM are chomping at the bit to roll out fibre to the home and increase their backbones significantly.

          Can you imagine the average daily number of viewer for Eastenders all streaming that as HD at the same time and the effect that will have on everyone elses use of t'internet? That's just the type of show that can't be released as a "boxset", gets huge audience numbers and people will normally watch at about the same of day.

          Same applies to the X Factor. Whether you or I like those or not, lots of people do.

          There's been a market for multicast for some years now, but still no one seems interested in actually doing it.

          1. D@v3

            Re: Fibre

            "unless you think BT and VM are chomping at the bit to roll out fibre to the home"

            Funny you should mention that, just yesterday I got a letter from Virgin wanting to dig up my road so they can lay some fibre....

    2. Anonymous Blowhard

      Re: Fire sale of fully sweated asset?

      "Arquiva's mistake was to try and squeeze as many channels as it could onto its multiplexes, sacrificing broadcast quality in the process."

      I think you've missed the point of the article; the availability of an alternate distribution channel, that has a lot of advantages over broadcast, mean that the broadcast network is intrinsically devalued forever; people are more attracted to the convenience of on-demand content than they are to "broadcast quality" and the content providers can control how the adverts are targeted (even to post-code level) as well as being able to prevent (most) punters from skipping them.

      A bit like being the owner of an enterprise that breeds and supplies dray horses at a time when your customers are starting to buy tractors and lorries.

      1. Commswonk

        Re: Fire sale of fully sweated asset?

        ...the availability of an alternate distribution channel, that has a lot of advantages over broadcast, mean that the broadcast network is intrinsically devalued forever; people are more attracted to the convenience of on-demand content than they are to "broadcast quality" and the content providers can control how the adverts are targeted...

        Unfortunately I suspect that you may be right. At the same time I would argue that broadcast by big transmitters on big masts has a lot of advantages over the internet, no contention being a big one. How well would the internet work if everyone was using it to watch television?

        There is a case that because "some people are more attracted to the convenience of on-demand content" their views are being seen as hip and trendy while the others can go and screw themselves for the simple reason that they aren't. And I refuse to be classified as some sort off oddball simply because "broadcast quality" is something I happen to care about.

        And I wonder how many of those consuming television by internet are actually licence payers...

      2. AndrueC Silver badge
        Stop

        Re: Fire sale of fully sweated asset?

        and the content providers can control how the adverts are targeted (even to post-code level) as well as being able to prevent (most) punters from skipping them.

        I really hope you're wrong there. The thought of returning to the days where adverts couldn't be jumped over fills me with dread.

  8. John Smith 19 Gold badge
    Unhappy

    Actual broadcast has a lot of advantages.

    Like GPS it has an unlimited number of viewers / receivers.

    Decent data rates mean your PVR will have no trouble. recording it.

    Between better image quality and a viable PVR will most readers want to waste bandwidth like that or use it for downloading stuff they can't see on a channel?

    1. AndrueC Silver badge
      Thumb Up

      Re: Actual broadcast has a lot of advantages.

      I don't think bandwidth will be much of a problem - at least not at the network level. Most connections in the UK are now physically cable of supporting four or five reasonably compressed HD streams. UHD makes it a bit harder but I'm not yet convinced that UHD is going to take off that quickly to be a problem.

      With today's codecs 10Mb/s is ample for all but 'on the fly' HD compression. And yes, I know, we don't all have a decent connection but most properties can get 40Mb/s by now. The last mile might be an issue here and there but the overall network is not going to struggle. CDNs and multicasting (openreach's offerings support that already) will do a lot to help smooth things out.

      It's a bit of an ask but I believe it's well within our abilities. IPTV could take over from broadcast TV without much of a struggle.

      1. Commswonk

        Re: Actual broadcast has a lot of advantages.

        It's a bit of an ask but I believe it's well within our abilities. IPTV could take over from broadcast TV without much of a struggle.

        Which abilities, precisely? And struggle for whom?

        In our road there are 19 homes; at a rough guess three are probably 5 or 6 that are unliklely to have any internet connection because the residents are elderly. I accept that over a long enough time the proportion of homes without internet will diminish as those who adopted it in their youth or middle age grow ever older and the current elderly move over to, er, cloud storage. Any homes that still decide they don't want the internet, or not at a great speed anyway will find themselves unable to watch television in the postulated Brave New World.

        And what about all the homes with indifferent speeds available, with no obvious means of getting anything faster? Or those where the current speed is enough for current needs but insufficient for television watching?

        I am not an internet speed freak but surely planning television over the internet with no "conventional transmission" available is a bad attack of trying to run before we've even fully mastered walking.

        At the moment big transmitters on big masts get into parts of the country that the internet does not, at least with sufficient bandwidth so "without much of a struggle" sounds wildly optimistic. And of course it could also mean that watching television actually becomes more expensive; my data limit is currently far in excess of my actual usage, and I suspect the same will be true of many others. But if we had to watch television by internet that might no longer be true, with additional costs ratcheting up while we watch...

        1. AndrueC Silver badge
          Go

          Re: Actual broadcast has a lot of advantages.

          As I said in the first sentence: at least at the network level. By that I mean that the 'UK data network' has (or will have) plenty of capacity.

          Individual properties or even groups of properties still struggle but there's relatively few of them left. Less than 5% of properties now. By 2020 it'll be a very small number. Sadly they will be the most difficult and expensive to supply but by then the national roll-out will be smaller and hopefully more funds can be allocated per property to get them finished off.

          Let's not panic about this. What we're talking about here (pensioning off broadcast TV) is not likely to happen for several years yet. I can't see it even being seriously mooted until the 2030s and by that time it'll be an unusual property that can't have at least 50Mb/s. Most will probably have 100Mb/s available, maybe even faster if a true FTTP roll-out starts.

          1. Commswonk

            Re: Actual broadcast has a lot of advantages.

            I think I concur with most of your post, but...

            Most will probably have 100Mb/s available, maybe even faster if a true FTTP roll-out starts.

            But at what cost? Will people on pensions be able to afford it? There always concerns being expressed that people are not setting aside enough for their retirement, and more or less having to find multiple 10s of ££ per month might be seen as a backward step. At least having bought a television and a licence watching is currently is free apart from the cost of the electricity.

            1. AndrueC Silver badge
              Meh

              Re: Actual broadcast has a lot of advantages.

              But at what cost? Will people on pensions be able to afford it?

              A good question. Maybe the answer is that by 2030 no-one is not going to have a broadband connection and we all just accept it as another utility bill. All part of life in the UK.

              Mind you if we're going to do that we need to tighten up the 'SLA'. If it becomes ubiquitous faults need to be treated more seriously as they are with water, electricity etc.

              But first-off the install cost could be pretty horrible. The cost per property rises quite rapidly when you're talking about the last few communities. So let's say that it's technically feasible sometime in the next two decades but questions remain about both unfront and ongoing costs :)

              1. John Brown (no body) Silver badge

                Re: Actual broadcast has a lot of advantages.

                "But first-off the install cost could be pretty horrible."

                Don't worry, we'll all be on 10Gb/s 7G mobile data plans by then. All the "not spots" will be gone because the entirety of the accessible broadcast spectrum will be owned by the mobile telcos who will be broadcasting across multiple channels to get into and around all obstacles and it'll all be powered by green renewable unicorn farts.

        2. Doctor Syntax Silver badge

          Re: Actual broadcast has a lot of advantages.

          "probably 5 or 6 that are unliklely to have any internet connection because the residents are elderly."

          IME you'd have to count rather more than 5 or 6 elderly households to find a single one that doesn't have an internet connection.

      2. John Brown (no body) Silver badge

        Re: Actual broadcast has a lot of advantages.

        "CDNs and multicasting (openreach's offerings support that already)"

        I can see how CDNs might help if there are big serves/cache dumps at strategic locations on the network, buut how does multcasting actually work in a useful way if it's all going OTT (or as we old fogies used to call it, VoD (Video on Demand). Isn't the point of multicasting to "broadcast" something at a fixed time for everyone to "tune in" to at the same time? Real question, BTW, I don't understand how it works in this respect.

        1. AndrueC Silver badge
          Facepalm

          Re: Actual broadcast has a lot of advantages.

          You're right, it probably won't help with OTT.

          I suppose it could be useful in seeding multiple CDN dumps but I'm not even sure that UK CDNs have bothered with multiple dumps.

  9. David Roberts

    Banwidth is not the only fruit

    I am lucky enough to have 150 Mbps courtesy of Virgin Media cable.

    I still get buffering from iPlayer and software updates take forever depending on the source.

    So having the bandwidth to the premises in nothing. The whole route from the server to the client must support the required bandwidth for all connected clients.

    1. TheVogon

      Re: Banwidth is not the only fruit

      That's probably largely due to this issue:

      http://www.ispreview.co.uk/index.php/2016/12/intel-working-fix-virgin-media-superhub-3-router-latency-bug.html

      [mod note – that site links to our article on the issue here]

      1. AndrueC Silver badge

        Re: Banwidth is not the only fruit

        It could be that or it could just be that VM like to run their network hot..

        -43.7% difference at peak times, -30% off peak.

        Only Plusnet comes close to that but those tests will include a time during which their was an acknowledged fault on their network. VM seems to be good in most parts but some areas can be heavily oversubscribed.

  10. EnviableOne

    with HEVC the streams will shrink considerably, IRO 50% less bandwidth for the same stream, so multicast shouldn't be as much of an issue, and they are working on the successor with the aim to half this again.

    Multicast saves core traffic as the stream is replicated at the edge nodes rather than from the source and with the viewing habits of most in consideration, the amount of core streams reduces as at least some people will be watching it at the same time.

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