After the pandemic
New technologies and new customer behaviors. And also: the Second Cold War and the future of telecom operators
New technologies will change the world after the pandemic
Digital tech will play a central role in our lives. Satya Nadella thinks “there is no going back”. In the same week when Microsoft suffered the effects of a global cyberattack, Satya Nadella talked to the Financial Times about his and his company’s vision of the future. He highlights the essential role that cloud computing has played in our response to the pandemic, and concludes that digital technologies will be central in our lives and our economies from now on. Because of that, he claims we need to build more trust in these technologies. This will require work in themes like cybersecurity (as shown by this same company this week), AI ethics or privacy, which will include both legislative initiatives and engineering projects to implement protections “by default” in our systems. If we do all this correctly, Nadella thinks that progress will accelerate, and in 10 years the conversation about Big Tech having too much power will not make sense anymore (FT)
Cloud technologies will transform education. One of the fields where the cloud has been key, and where it may continue to be a driver for innovation, is education. E-learning enabled by cloud systems has helped humanity cope with the challenges from the pandemic. However, the last few months have also revealed the gaps remaining. The experts quoted in this FT analysis discuss how educational institutions will be able to cover these gaps through a more active adoption of cloud technologies, that will help them change the design of the online learning experiences (FT)
“Holoportation” and Augmented Reality could reinvent communications. Silicon Valley companies are working to reinvent the video communications experience. Zoom and its competitors have been a great help to maintain professional activity from home, but their limitations have also appeared, leading to what many people these days call “Zoom fatigue”. These problems are linked to a relatively rudimentary, or not realistic, “tele presence” experience, so technology would be part of the solution. Apple could be building a “3D FaceTime” app, making use of new depth-sensing cameras. Also, Microsoft has released a prototype of an “holo-portation” app that aims to “beam a lifelike image of a person into a virtual scene” (wow) (FT)
Autonomous cars could reduce fatal accidents. Waymo, the self-driving cars subsidiary of Alphabet (Google) claims that the AI driving its vehicles has been able to mitigate crashes in most of a number of virtually recreated fatal accidents. This is a ray of hope for these technologies, as a way to increase transport safety. However, there are still open questions, like uncertainties on how humans will react when facing potential crash situations with autonomous vehicles (Bloomberg)
And Apple will play a part in that. New rumors confirm that Apple is working on a car, and that it will be a “smartphone on wheels”, built in the same way as the iPhones are built today. Apparently the company is favoring a more “iPhone-like” model, in which they would work with “white brand” manufacturers like Foxconn (a key iPhone builder today) and Magna (a contractor specialized in cars, currently hired by other car brands). Apple would have discarded a partnership with a more established car company (like Hyundai / Kia or Nissan, as previous rumors suggested) (Bloomberg)
Money is flowing to Quantum Computing startups Close to 200 startups would be working to build commercial quantum systems. Some experts (including Scott Aaronson or Ignacio Cirac) are skeptical about this. But in the current SPAC-driven “gold rush”, claims are increasingly bullish, and big money is starting to flow. We have two examples this week:
IonQ: a quantum-computing machine in 2023? IonQ, a startup focused on commercializing quantum computing hardware and software, is planning to go public through a SPAC merger that would value the company at $2bn. The company sees a commercial reality for quantum computers by 2023, aligned with claims by Gartner (who always knows a lot) that 20% of global organizations, including governments and companies, will allocate budget to quantum computing by that year. IonQ plans to use the new money to fund the construction of a machine with the size of an Xbox console that will be able to work at room temperature, and that would be expected to be available by 2023 (WSJ)
PsiQuantum: a commercial quantum computer by 2025? Another startup, PsiQuantum, founded by four UK university physicists, has been working in stealth mode up to now, but is preparing to make an open announcement about the technology they’ve been building in the last 5 years, with the $215m they received from VC funds. The idea is probably to ride the current wave of optimism and get more money. As IonQ, PsiQuantum is quite bullish on the commercial perspectives of quantum computers, and would be expecting to build a machine with 1m qubits (mostly dedicated to error correction) by 2025. In this case, it would be a big computer, quite like the mainframes of the 70s, which would occupy a whole room and would be accessible through the internet. PsiQuantum is supposed to be already working on potential use cases with companies from several industries, including pharmaceutical, clean energy, aerospace, transportation, finance, and high-tech (FT)
Technology could help us address the climate crisis:
New, “green” processes to produce hydrogen could be great, but there is still too much uncertainty. Hydrogen has a great potential to contribute to solve the climate crisis, as it doesn’t produce any carbon dioxide when it burns. The challenge up to now has been that the most efficient process to produce hydrogen was using fossil fuels, so the net effect was not too positive. A company called ITM Power has built a £22m plant to produce “green hydrogen” from water, a promising technology that governments have recently started to see with sympathy. As a consequence of this, ITM’s valuation has ballooned since 2019 (+2,000% to £2.6bn). However, there are still technical challenges to scale what ITM does, and only 1% of the current hydrogen production comes from “green” processes, so the company’s future is uncertain (FT)
The answer could be… innovation in nuclear reactors. In what many could see as a paradox, it turns out that nuclear reactors, which have traditionally been the nemesis of ecologist organizations, could be their strong allies in the fight against global warming. Nuclear energy doesn’t have carbon emissions, and innovative reactor designs, like SMRs (“Small Modular Reactors”), that fit into a truck and can be transported wherever they’re needed, are revolutionizing this option’s economics (Bloomberg)
An emerging problem is how to make humans and digital technologies coexist in a productive way
Human talent is still key in our tech-centric world. Look at the microchip supply chain: The pandemic may have been an unexpected event, but maybe that shouldn’t be an excuse to justify our lack of preparation to deal with its effects. This seems to be largely a question of human talent, as algorithms are not so good yet to deal with unexpected disruptions. In particular, the breakdown of many global supply chains, including semiconductors, is highlighting the need of people with the right skills to manage the problem (FT)
Just “adding technology” doesn’t necessarily increase productivity. This opinion piece at the FT gives a note of “techno-pessimism” amid the currently dominant technology exuberance. Digital technologies have turned us into more “generalist / do-it-all” workers, providing us with multi-purpose tools like PCs and smartphones. However, a look at economic history shows that specialization, rather than multi-tasking, has traditionally been the key driver for growth and productivity gains. So this could explain why digitalization doesn’t seem to have the positive effects on the economy that everyone expected. The author proposes to rethink knowledge work and introduce a higher level of specialization. This could have a negative impact as well (no one wants to go back to the factories of the early 20th Century), so the challenge would be to find a sweet spot between focus and multitasking (FT)
New consumer behaviors are reshaping businesses across all industries
Shifts in consumer behavior are driving innovation activity (and funding)
New customer behaviors, and the companies that have exploited them in the pandemic, may be here to stay. Since the pandemic started we’ve been looking here at the potential winners. Now, with (something like) the end in sight, many of these companies are being subject to analysis, and investors wonder if they will be able to keep the advantage gained in the last few months. In many cases the conclusion should be positive. The pandemic has changed work and consumption patterns, and there is little evidence of a retreat of consumers from online life. So the initial reaction that we have started to see in the markets, against tech companies and in favor or traditional stocks, would be largely unjustified. Even internet traffic still seems to be growing (e.g. more than +12% compared to the peak when the crisis started last year) (NYTimes)
The acceleration in the adoption of digital technologies is driving an explosion of Venture Capital activity. Aligned with the vision that the changes we’ve been seeing are structural, activity in Venture Capital is intensifying, with investors looking for startups providing the services that the new consumers and workers demand. These include business software and e-commerce solutions. The overall mood is optimistic, and the volume of investment is currently +40% vs. a previous peak in 2018. However, some voices are also warning that valuations could be starting to be too high (with SPACs as a vehicle for some “irrational exuberance” to enter the markets) (FT)
Home deliveries of restaurant food: going mainstream
Deliveroo prepares its IPO, and investors are excited (despite some uncertainties) Deliveroo is planning its IPO at a $10bn valuation. The company submitted the IPO documents to the financial authorities this week, and they show a very healthy revenue growth rate (+54% in 2020) but also a net loss in the bottom line (albeit narrower than previous year’s). Deliveroo claims that they have a strong position, with more than 6m people having ordered food through the app each month. Still, some investors are cautious because they would have expected the company to become profitable during the lockdowns, leveraging the demand explosion. The plans are now to expand into “cloud kitchens” (catering only on-demand customers) and into groceries, in partnership with some high-street supermarkets (FT)(FT2)
Deliveroo’s opportunity grows as restaurant deliveries expand to new segments. An obvious reference for Deliveroo is the recent IPO of DoorDash (their American equivalent) which was a massive success in December. In this article, a comparison between the two apps reveals a new opportunity for Deliveroo in the suburban segment. Up to now, Deliveroo has been focused on urban centers, e.g. to send food to professionals working at the office, in pre-pandemic times. But the case of DoorDash in the US shows that suburban families place larger orders that lead to better margins. Also, the shift to remote working, that is expected to (at least partially) remain, could increase the addressable market in these areas (FT)
The explosion of online groceries reveals the importance of real estate (with a different role)
In the UK, online supermarkets’ fulfillment centers move closer to where customers live. Online groceries have become the norm in the UK, during lockdown times. Almost 20% of total grocery shopping in the country is already online. But stores are still important, even if they’re starting to play a different role. Sainsbury’s, a leading British supermarket chain, has plans to close its London online fulfillment center and redeploy most of the 650 employees to local supermarkets. Also, Ocado, the leading online grocery provider, is opening “mini” and “micro” fulfillment centers. When combined with automated processes, these capillary networks are claimed to reduce delivery costs for online operations (FT)
Even Amazon believes that local supermarkets can complement online groceries. Another very significant example of the same trend is what Amazon is doing. They are expanding their network of “Amazon Fresh” local grocery stores in the US, with the eleventh shop just opened this week, and with plans to deploy at least 28 more across the country. With these “proximity” physical stores, Amazon would be looking to attack segments that are more reluctant to go online, including lower-income shoppers that frequent discounters such as Walmart. Also, some wealthier customers seem to favor picking up their groceries at a local facility or alternate online with physical experiences (Bloomberg)
We will keep buying all kinds of things online
All businesses are moving online, and Amazon is no longer the only option for this. Shopify is a well known example among the winners of the pandemic. They have grown fast with their solutions for traditional stores to start selling online, including cloud-based applications supporting all kinds of e-commerce needs, like payments and order fulfillment. Amazon has been offering its own platform to third party sellers since a long time ago, with great success, but newcomers like Shopify and others like BigCommerce or Magento offer merchants more control of their branding and customer relationships. In this way, these newcomers are becoming real competitors to Amazon (WSJ)
A global phenomenon: Coupang as the Korean Amazon… or not. We had already talked about them. South Korea’s Coupang, a leading local e-commerce company supported by the SoftBank Vision Fund, finally went public this week, and the result was consistent with the bullish market for tech stocks that we’re living these days. The share price rose +70% in one day, taking the valuation beyond $95bn. Coupang has become something like a global exception, leading the local e-commerce market in detriment of Amazon or Alibaba. So everyone’s pretty excited about them. However, if you look more carefully, you see that after more than 10 years of operation they’re still cash flow negative, unlike Amazon, which reached breakeven (and self-sustainability) much earlier. Also, Coupang’s market share in Korea (25%) is much lower than Amazon’s in many markets, including the US (47%). The fact that the current valuation implies a multiple of 5x sales (much higher than Amazon’s ) looks like a cause for concern, or at least cautiousness (WSJ)(FT)
A global phenomenon: several Indian startups move to deliver anything, to anyone, at any time. Dunzo, an Indian startup, has just raised $120m from investors including Google, to expand its business based on delivering anything, to anyone at any time (maximum flexibility). Their current average order value is less than $6, and the actual number is much lower for many deliveries, so profitability remains a challenge. However, this can also be seen as an opportunity to gain presence in people’s home screens (and people’s attention) in a relatively short period, to then potentially consider to pivot and start offering other services (FT)
Digital payments could be next. India is an early adopter, and Big Tech companies are looking. The explosion of digital sales is accompanied by the need to have an infrastructure to settle payments online. In India for example, digital transactions have doubled in the last 2 years, faster than any country outside China, and could reach $2trn in 2023. Settlements are made through the National Payments Corporation, an “umbrella organization” backed by more than 50 local banks. But now the Reserve Bank of India, concerned by potential risks from concentrating all transactions on a single platform, is proposing to create a second one. Several groups have shown interest to invest, including an international consortium where both Amazon and Visa are present, and another one with M Ambani (Reliance Jio), Google and Facebook (Bloomberg)
The future of public transport could be “an app for that”
The “Southeast Asian Uber” is going public though a massive SPAC acquisition. Grab, a South Asian replica of Uber, is going public through… you guessed it: a SPAC. The deal has an implied valuation of $40bn, so not bad at all… Grab has the SoftBank Vision Fund among its shareholders, and is now in the process to expand beyond transport, into groceries and other items (WSJ)
Massive growth rates and valuations for digital entertainment companies
Disney+ just reached more than 100m subscribers. Last Tuesday, Disney announced they had surpassed 100m subscribers to their digital streaming service, Disney+. The streaming app has become a core priority for Disney, given the change of habits with the pandemic. Open questions remain, including how much Disney will push for this model, even at the expense of traditional theaters. As an alternative reference, AT&T’s Warner Bros has already opted to prioritize online even if that could mean hurting theatrical revenues (WSJ)
Roblox goes public and reaches a sky-high valuation. Roblox has finally gone public through a direct listing. And it has been quite a success, with the stock going up in the first day of trading, to reach a $38bn market cap. The company offers a platform for members to play online games developed by other users, and makes money by selling digital currency that players can use to purchase in-game accessories for avatars. Developers receive 70% of the money generated by their works. Roblox has been one more winner in the pandemic, as students kept at home due to lockdowns have embraced it as a cool form of entertainment. The company’s revenue has grown +82% in 2020, and expectations look high… For reference, in a funding round one year ago, the valuation was around $4bn, so we’re talking of a 10x value creation in just one year (well done, Andreessen Horowitz…), and a revenue multiple approximately 4 times higher than those of competitors like Activision Blizzard, Electronic Arts or Zynga. To sustain this valuation, Roblox will probably have to expand beyond its current core “gaming use case” and its current audience (two thirds of users are less than 14 years old)(Bloomberg)(WSJ)(WSJ2)(FT)
Interestingly, question marks emerge for digital advertising
Content consumers increasingly shift to paid subscriptions, that some see as the only sustainable model. Shira Ovide of the New York Times reflects on the fact that the internet has not finally delivered on its promise of “free information”. Most “professional” content sites are now moving to subscription fees, and she believes this is happening because the advertising model has been made inefficient due to the excessive market power of Big Tech companies like Google, Facebook and Amazon. As a result, the share of ad revenues that content creators receive would be insufficient to sustain their businesses, and they would be “forced” to move to subscriptions (NYTimes)
Does personalized advertising even work? An opinion piece at the FT wonders why personalized ads work so badly. Yes, we’re hearing all the time about the excellences of AI algorithms, and about data being the new oil. However, most people’s experience with ads is that they’re often not so relevant. As the author says here, “perhaps there is no such thing as magic data manipulation by tech companies that can be used to pull our strings, even if an ecosystem of well-paid jobs exists to promote it”. She even suggests that advertisers should question whether data collection and targeted ads are worth the effort… (FT)
Discord (a communications app) has tripled its revenues with no advertising. Discord, a chat startup, is another example of success during the pandemic. The company has doubled its user base (to about 140m now) and tripled its revenues (to $130m) in 2020. Interestingly, this relatively successful monetization has happened without using ads, which the company sees as too intrusive for a chat app, and something that many users might perceive as hostile. Money is generated through subscriptions that give access to special emojis or enhanced video resolution (WSJ)
Eliminating friction in gig-economy jobs emerges as a good business
A Spanish startup (Jobandtalent) leads the trend. Jobandtalent is having a big success with its idea of becoming the online staffing agency for temporary workers. This is a timely product, as more jobs are appearing in the so-called “gig-economy”, while at the same time regulatory pressure is increasing to recognize normal workers’ rights for them, something that companies like Uber or Lyft are not prepared to do. Jobandtalent offers a solution for this, assuming part of the risk and providing pensions, sick and holiday pay or health insurance to their workers. They also differentiate from more traditional staffing agencies like Adecco or Randstadt by the use of algorithms to better match workers with prospective employers. The latest valuation is close to €200m and their shareholders include SoftBank’s Vision Fund (FT)
The fight for digital leadership: the Second Cold War
An attack on Microsoft systems increases geopolitical tension
Chinese hackers attacked Microsoft systems and triggered a global crisis. An attack on Microsoft Exchange (the software that powers most email systems globally) has turned into a massive cybersecurity crisis. Microsoft claims that this has been done by a Chinese government-backed group of hackers. This is coming just a few months after a similar attack from Russia, and reveals the increasing fragility of our IT infrastructures to hostile actions. The use of automated tools to better identify targets and maximize impact is seen as an additional cause of concern (Bloomberg)(NYTimes)
The incident has shown how easy it is to start a “cyber-pandemic” As the vulnerability has been identified, many other hackers, including criminal groups, have started new attacks, contributing to the expansion of the problem, that is already affecting tens of thousands of business and public-sector victims (FT)
“Cyber warfare” starts to be seen as the “new nuclear arms”: In an era where more and more things are connected, the potential impact of these cyber attacks is bigger than ever. So governments are working to find solutions that protect their countries. A first action point seems to be focused one third party contractors providing IT services, which should have the necessary legal, regulatory and financial incentives to meet the highest security standards. A more complex issue is preparing for retaliation, if needed. And this is where similarities with the nuclear race from the second half of the 20th Century appear. As with nuclear arms, we need a negotiation framework between different countries that helps control a potential escalation that could be very destructive, by providing all parties with signals of what could happen if red lines were crossed, as a dissuasion mechanism (FT)
Google has seen an opportunity to retaliate against Microsoft. Google has seen how Microsoft has publicly positioned supporting media organizations in their dispute against Silicon Valley platforms. So they are now using the cyber attack as an opportunity to respond. Google’s senior VP of global affairs just published a blog post in which he accuses Microsoft of “naked corporate opportunism” in the “pay for content” debate, and where he also claims that it is “no coincidence” that all this is coming amid the global scrutiny of Microsoft’s role in the two recent massive hacks (WSJ)
Europe’s quest for self-sufficiency:
Europe wants a place in the cloud (good luck with that)… Europe is working to create a local alternative to (US-based) Big Tech cloud infrastructure. Again, like with cybersecurity, this reflects concerns on our increasing dependence on IT infrastructures, and in particular on a few big providers that, from the perspective of most countries, are based “somewhere else”. Most of the public cloud infrastructure used today by European companies and public administrations is provided by Amazon, Microsoft are Google, all based in the US. So Europe wants to create a local alternative to reduce dependence. The project has been nicknamed Gaia-X and is trying to implement a “federated system” of cloud computing providers that collaborate and achieve economies of scale to compete against the American giants. The project faces many challenges, starting by the technical ones (this is not easy to implement, and the leading cloud providers have a massive technical advantage), but also including some political risks (like triggering retaliation from the US). A potential area of focus could be edge computing, where the dominant cloud providers are still in an initial stage, and where local telecom infrastructure could play a role (FT)
… And a place in the semiconductor supply chain, too. Semiconductors are also perceived as a key element of the new infrastructure behind all our economic activities. Advanced chips are at the heart of modern cloud infrastructure, but also determine the performance of the devices we use, and are expected to be essential for all future forms of transportation. So the EU is also concerned about the region’s weakness in this space, and is working to develop local capabilities in chip design and manufacturing. A substantial part of the $150bn dedicated to catch up with the US and China on “digital industries” is expected to focus on semiconductors. The target is for Europe to produce more than 20% of the world’s next-generation chips by 2030 (vs. 10% today) (WSJ)
Experts see many challenges with this. Again, there are substantial challenges with this European project, as local semiconductor companies are maybe too far behind global chip giants like TSMC, Samsung or even Intel. The CEO of Infineon, a leading European manufacturer, is skeptical that cash alone can solve the problem, and claims that the project will not work unless there is enough local demand, i.e. a robust European tech ecosystem. According to this view, Europe’s weakness in chips is a consequence of the deeper problem of not having strong “Big Tech” firms. He’s even more direct when he says that he’s “not so sure it would make sense to invest in Europe in order to use the capacity for the Chinese”(FT)
Apple could lend a hand. Meanwhile, maybe under political pressure, and maybe to improve its position to sell to premium car manufacturers based in the area, Apple is planning to build a new semiconductor design center in Munich, that is expected to work in custom chips for 5G and other wireless technologies (Bloomberg)
China wants to lead the (tech) world
The Chinese government wants a fully non-American tech stack. China has been a global pioneer in the vision of technology as the heart of all future economic activities, and has seen the opportunity to become a global super power by controlling the essential technologies. Now, with this project under threat by US bans of some critical supplies, China is reacting by accelerating its already existing plans to become fully self-sufficient across the whole technology stack. The government has just published a 5 year strategic plan that views tech development as a matter of national security, and includes public subsidies and loans of up to tens of billions of dollars for the local tech industry (NYTimes)
Talent is a barrier, but money can help. There are many barriers for China to achieve its ambitions to dominate the whole tech stack. Talent is a significant one, so the Chinese are working to develop a layer of highly-skilled engineers in critical areas like semiconductors. As a part of this, Chinese firms like Bitmain (an owner of data centers dedicated to Bitcoin mining) are hiring Taiwanese chip engineers. Taiwan is investigating these actions, because local rules prohibit mainland firms to recruit in the island without previous authorization(Bloomberg)
Huawei’s challenges highlight the need, but they also show that the transition won’t be easy. We already knew about the (very disruptive) effects that the American technology bans were having on Huawei’s smartphone business. But this week we also learned about the impact on the network equipment segment, where their market share out of China has fallen -2pp, to reach approx. 20% in 2020. This has been beneficial for the two European network technology giants, Ericsson (+2pp to 35%) and Nokia (+1pp to 25%). Of course, the landscape is completely different in China, where Huawei remains the leading supplier (by far) (WSJ)
The US tries to react
American Big Tech companies are a strength, but protecting them has costs, too. The US government may be tempted to protect, or at least reduce the pressure, on local Big Tech companies, which could be seen as a strong asset to compete against the Chinese “military-technological” complex. AI skills in particular, like the ones in which Google, Facebook, Amazon, Microsoft or Apple excel, seem increasingly important for military applications, including “information wars” in social media. If this path was followed, the US could move to replicate the tighter links between army and tech industry that China seems to have developed. This opinion piece at the FT claims that this would be a mistake, and that the priority should be to create the context in which the “Googles and Microsofts of tomorrow” can appear (FT)
Americans are also trying to reduce their dependence of China (e.g. in strategic raw materials). China may depend on the US for some critical technologies, like tools for chip design and manufacturing, but the Americans also depend on China for other parts of the value chain. In particular, China controls the supply of several raw materials required by high tech. An example is lithium, which is central to build batteries for smartphones and electric vehicles. Only 1% of global lithium output is extracted or processed in the US, and meanwhile China extracts 10% and processes almost 70%. The US is working to develop cheaper and cleaner extraction and processing methods, that would help them catch up. Startups like Piedmont Lithium (mentioned here) are getting support from the US government to achieve this (WSJ)
The future of telecoms
Vodafone moves away from physical infrastructure: Vantage Towers IPO next week. Vodafone expects to raise more than $3bn next week in the IPO of Vantage Towers, the infrastructure vehicle owning the Group’s mobile phone towers, which will start trading at a valuation of almost €15bn. The question here is how viable is a business like this while under control of one of its key customers (Vodafone). Other potential tenants may be reluctant to use the service if it’s owned by a direct competitor, and could be inclined to prefer Cellnex or American Tower. The recent sale of Telxius’ towers by Telefonica points in a rather different direction(Bloomberg)
Like Verizon, T-Mobile US wants to grow in digital advertising. Just at the same time as some people have started to question the business of digital advertising, telecom operators globally seem to be moving in that direction, as a diversification opportunity and a catalyst for new revenue growth. In the US, T-Mobile has just announced that they will automatically enroll its subscribers in an advertising program based on data about their online activity. This doesn’t sound nice from an end-customer perspective, but one could argue that if Google does this based on data captured by Chrome, operators should have the right to try too (WSJ)
AT&T bets on differential connectivity and video streaming. Both are expensive bets. Meanwhile, AT&T remains the most aggressive operator in terms of diversification bets, after their massive investments in video distribution and content production. We’ve already discussed here that the distribution part has not gone well (that’s an understatement), and the company is selling DirecTV at a large discount vs. the acquisition price. The other (much bigger) content acquisition, Time Warner (now WarnerMedia), seems to be working better. In the new world of digital entertainment the future of content producers is linked to video streaming apps, and AT&T’s own app, HBO Max, is performing well. Indeed, in a virtual meeting with investors last Friday, AT&T raised the long-term subscriber targets, and that was received as a sign of optimism. The company also confirmed their commitment to keep paying the dividend, apparently amid increasing question marks from the investor community (the dividend yield is currently at 7% and represents approx. 50% of free cash flow). This was presented as a transition period in which the dividend would remain under pressure, at least until net debt reaches the 2.4x EBITDA target (expected for 2024). But in the meantime there will be stress, because both the content business (production for HBO Max) and the company’s core business (5G deployments) are cash intensive… (WSJ)