Looking to consolidation: UK mobile market in Q3 2024
Service revenue growth flat-lined at -1% this quarter. The operators’ year-to-date net adds remain in negative territory while the MVNOs have taken more than 1 million
The accounting treatment of the new, absolute, in-contract price increases will provide something of a boost to some operators this year, but worsen the trend next year, particularly for BT/EE
The likely Vodafone/Three merger will be the primary theme for the industry in 2025 and beyond, putting upward pressure on capex levels industry-wide
Related reports
Taking a dip: UK mobile market in Q2 2024
2 September 2024Service revenue growth dropped off by 5ppts this quarter to -1% as lower in-contract price rises hit.
The outlook for 2025 is marginally brighter than it was last quarter as new price-increase regulations raise the average in-contract price increase for customers.
The CMA is set to deliver its preliminary findings on the Vodafone/Three merger in September. If it is not approved, we expect both parties to significantly change their strategies to be viable in the UK market.
Fixed wireless access: Having its moment
24 February 2023Providing home broadband connections via a mobile network (FWA) is gaining traction in certain markets where local conditions make it a viable alternative to fibre, such as New Zealand, Italy and the US.
FWA is a time-limited opportunity for most, with mobile traffic growth absorbing capacity for it and fixed traffic growth depleting the economic case. An ultimate shift to fibre is the best exit strategy.
In the UK, H3G's spare capacity could support up to 1 million FWA customers on a ten-year view—enough for a meaningful revenue fillip for H3G, but not enough to seriously disrupt the fixed market.
And then there were three? Vodafone/H3G merger
6 October 2022Whether to allow a Vodafone/H3G merger is essentially a trade-off between range of consumer choice and costs of network duplication. With the need for the former diminishing and the latter increasing, the case for approval is strengthened.
H3G is in a negative spiral of small scale, low investment, and low returns. A merger would allow it to form part of a more credible competitor with a transformed returns profile—without rising prices or reduced industry investment levels.
The CMA’s aversion to mergers has been very stringent of late—an approach that risks deterring investment and compromising competitiveness. Consolidation in UK mobile is unlikely to happen without a change of mindset.
The wolves start to circle: Mobile eSIMs in prospect
17 March 2022The UK mobile operators are increasingly vocal about their concerns regarding the tech giants, namely Apple and Google, encroaching on the mobile connectivity market.
eSIMs enhance the case for the tech giants launching their own MVNOs (such as Google Fi in the US) or, perhaps more realistically and concerningly, becoming gatekeepers to mobile airtime subscriptions.
Many things would need to line up for the tech giants to effect this and the MNOs need to stand as one to ensure that they are not successful. Policy makers should be equally reticent.
Taking a dip: UK mobile market in Q2 2024
2 September 2024Service revenue growth dropped off by 5ppts this quarter to -1% as lower in-contract price rises hit.
The outlook for 2025 is marginally brighter than it was last quarter as new price-increase regulations raise the average in-contract price increase for customers.
The CMA is set to deliver its preliminary findings on the Vodafone/Three merger in September. If it is not approved, we expect both parties to significantly change their strategies to be viable in the UK market.
Fixed wireless access: Having its moment
24 February 2023Providing home broadband connections via a mobile network (FWA) is gaining traction in certain markets where local conditions make it a viable alternative to fibre, such as New Zealand, Italy and the US.
FWA is a time-limited opportunity for most, with mobile traffic growth absorbing capacity for it and fixed traffic growth depleting the economic case. An ultimate shift to fibre is the best exit strategy.
In the UK, H3G's spare capacity could support up to 1 million FWA customers on a ten-year view—enough for a meaningful revenue fillip for H3G, but not enough to seriously disrupt the fixed market.
And then there were three? Vodafone/H3G merger
6 October 2022Whether to allow a Vodafone/H3G merger is essentially a trade-off between range of consumer choice and costs of network duplication. With the need for the former diminishing and the latter increasing, the case for approval is strengthened.
H3G is in a negative spiral of small scale, low investment, and low returns. A merger would allow it to form part of a more credible competitor with a transformed returns profile—without rising prices or reduced industry investment levels.
The CMA’s aversion to mergers has been very stringent of late—an approach that risks deterring investment and compromising competitiveness. Consolidation in UK mobile is unlikely to happen without a change of mindset.
The wolves start to circle: Mobile eSIMs in prospect
17 March 2022The UK mobile operators are increasingly vocal about their concerns regarding the tech giants, namely Apple and Google, encroaching on the mobile connectivity market.
eSIMs enhance the case for the tech giants launching their own MVNOs (such as Google Fi in the US) or, perhaps more realistically and concerningly, becoming gatekeepers to mobile airtime subscriptions.
Many things would need to line up for the tech giants to effect this and the MNOs need to stand as one to ensure that they are not successful. Policy makers should be equally reticent.