Price rises lose their shine: UK mobile market in Q4 2023
Mobile service revenue growth was down 1.2ppts in Q4 as the impact of 2023’s price rises continued to wane.
Growth will wane further into Q1 and with spring price rises being 7-9ppts lower than last year’s, we don’t foresee a revenue boost in Q2.
With negative publicity and upticking churn from inflation-linked price increases, Ofcom’s review of the mechanism may prove to be a blessing in disguise.
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MVNOs' bargaining power to secure favourable rates has also improved sharply, with Lyca Mobile's move to the EE network indicative of their strengthened hand.
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A strengthening force: MVNOs in UK mobile
8 February 2024There are various reasons why the mobile virtual network operators (MVNOs) have been adding many more subscribers than the mobile network owners over the past couple of years, including the cost-of-living crisis, and the expansion in their addressable market from the shift to online.
MVNOs' bargaining power to secure favourable rates has also improved sharply, with Lyca Mobile's move to the EE network indicative of their strengthened hand.
While some factors in their favour may wane over time, the prospective Vodafone/Three merger would be a marked positive, with the imperative on the operators to fill at least 25-50% additional capacity.
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Bargain-hunting in the sector continues with the MVNOs still taking the lion’s share of net adds, to the detriment of the MNOs.
EE is offering keenly priced convergence and family plans with its new platform—another challenge for the other MNOs who don’t share the same incentives.
Moving swiftly on: Vodafone/Three merger Phase 1
22 March 2024The CMA's Phase 1 conclusions document is largely as expected, extending to Phase 2 which looks set to conclude towards the end of the year.
The impact on both the retail and wholesale markets will be investigated, and the CMA will want to bed down its view of the counter-factual and the likely merger efficiencies. The impact on network sharing is also an issue, but spectrum reallocation was not mentioned.
We continue to see a solid case to allay these concerns, with the resultant capacity uplift key to both the wholesale and retail markets.