1、 This report has been prepared by UBS Securities LLC.ANALYST CERTIFICATION AND REQUIRED DISCLOSURES,including information on the Quantitative Research Review published by UBS,begin on page 14.UBS does and seeks to do business with companies covered in its research reports.As a result,investors shoul
2、d be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making their investment decision.Global Research 9 December 2020 Communications&Media Takeaways from the UBS Global TMT Conferenc
3、e Key Themes from the UBS Global TMT Conference Several themes were prevalent,incl.(1)a lower 4Q switching pool in wireless;(2)moderating,albeit strong underlying momentum in broadband;(3)a resilient ad market,supported by record political;(4)a cautious outlook for Pay TV subs despite recent resilie
4、nce;(5)ramping content spend as networks become more DTC-centric;(6)studio optimism around windowing&home distribution;(7)sustainable cost structure improvement post COVID and(8)a positive infrastructure spending backdrop,although churn timing will cause diverging tower growth while data center dema
5、nd remains healthy with little evidence of hyperscalers entering a digestion phase.Media:Better subs helping affiliate NT while ad resilient;DTC pivot in focus Improved Pay TV sub declines should drive better 4Q affiliate trends(DISCA&VIAC+MSD).That said,networks are increasingly pivoting for a DTC-
6、centric future(Peacock at 26M sign-ups,+4M vs.3Q;HBO Max 12M+activations,+4M;VIAC on track for 19M paid subs by YE),which could drive more challenging Pay TV trends.Record political drove resilient TV ad.Sports rights are key(keeping NFL Sunday Aft.the priority for FOX)and we believe networks will i
7、ncreasingly experiment with taking sports OTT,potentially worsening cord cutting(could hear more at DIS analyst day).Wireless:lower 4Q switching pool Despite talks of a 5G super cycle,carriers suggested switching activity has been more muted so far in 4Q amid retention efforts.This should contribute
8、 to lower churn while service rev growth rebounds to LSD for VZ&AT&T(helped by unlimited migrations)and T-Mobile continues to outpace the group.The C-band auction is in focus,where we expect VZ to bid aggressively(UBSe$15B)while TMUS is on pace to reach 100M POPs w/2.5GHz by YE and 200M by YE21.Broa
9、dband trends healthy;Cautious on Pay TV subs Cable MSOs were constructive on HSD trends but suggested 21 adds will likely be similar to 19 after a pandemic-fueled 2020.Stronger subs in 20 should support financial growth in 21.Despite recent resilience,video challenges remain as distributors focus on
10、 profitability/raise prices&networks become more DTC centric.See within for panel and company highlights Equities Americas Fixed-Line Communications John C.Hodulik,CFA Analyst +1-212-713 4226 Batya Levi Analyst +1-212-713 8824 Christopher Schoell,CPA Analyst +1-212-713 4912 Ryan Gravett Associate An
11、alyst +1-212-713 3344 Communications&Media 9 December 2020 2 Contents Panel Highlights.3 Advertising Panel(Magna Global,Group M&Zenith).3 Regulatory Panel.3 5G Panel(Digital Colony,Everstream,FirstLight).4 Data Center Panel(Sabey Data Center Properties,Vantage Data Center,Stack Infrastructure).5 Dis
12、cussing the Future of Streaming Media Panel.5 Company Highlights.6 American Tower(Buy,PT$270).6 AT&T(Neutral,PT$30).7 Charter Communications(Buy,PT$700).7 Comcast Corporation(Neutral,PT$47).8 Crown Castle(Neutral,PT$173).8 CyrusOne(Neutral,PT$82).9 Discovery(Neutral,PT$24).9 Fox Corp(Neutral,PT$29).
13、10 Lumen Technologies(Neutral,PT$10).11 T-Mobile(Buy,PT$140).11 Verizon(Neutral,PT$60).12 ViacomCBS(Neutral,PT$29).12 John C.Hodulik,CFA Analyst +1-212-713 4226 Batya Levi Analyst +1-212-713 8824 Christopher Schoell,CPA Analyst +1-212-713 4912 Ryan Gravett Associate Analyst +1-212-713 3344 Communica
14、tions&Media 9 December 2020 3 Panel Highlights Advertising Panel(Magna Global,Group M&Zenith)Advertising more resilient than expected:Panelists called out a stronger than expected recovery in advertising,with TV helped by record political spending.Global Ad forecast details:Magna expects global ad s
15、pend to fall just 4%in 20 and rebound to+8%in 21.GroupM expects ad spend to fall 6%YoY in 20,improve to+12%in 21 and grow 5-6%thereafter(excluding political).Zenith anticipates global ad spend falling 7.5%in 20(prior-9%),improving to+5.6%in 21.Zenith also sees total ad spend surpassing 2019 levels b
16、y 2022,supported by strength in digital.TV Ad:Magna expects global TV ad spend to fall 12%in 20 and rebound to+3%in 2021(-11%and+5%for National TV in the US).Many buyers who were able to sustain operations through the pandemic maintained TV ad budgets,supporting the verticals resiliency this year with a budget flush in 2H20(GM).Impact from rising COVID cases?Q4 does not look like a rerun of Q2 at this point.Marketers now know what works in lockdowns(Zenith)Full note:Read the report Regulatory Pa
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