UK Mobile: Escaping the value trap
The low price, low quality vicious cycle in UK mobile is becoming ever more apparent in both revenue pressure and in network quality surveys.
Policymakers meanwhile demand better quality, coverage and resilience which will be tough to deliver without a more robust revenue outlook.
Without radical change, the government’s affordability priority looks set to win out over its growth one, driving the industry towards (self-reinforcing) sub-optimal outcomes for both consumers and growth.
Related reports
Mobile coverage: The search for ubiquity
16 April 2026UK mobile coverage/quality significantly lags that of its European peers; this really matters, for both consumers and the wider economy, and for both existing services and a range of potential new ones.
Improving coverage will likely require a variety of techniques, from antennas in space to antennas inside shopping centres, and fully utilising the entire range of available spectrum, from sub-1GHz to mmWave.
Network quality competition sparked by the VodafoneThree merger and network rebuild could drive improvements from all three operators, but significant government help is required to ensure this.
Service revenue worsened by 1ppt this quarter to -1.7%, but this is heavily distorted by one-off factors, in particular the blowback from O2’s controversial price increases.
For the same reason, MVNOs enjoyed their best quarter ever, particularly Sky and Tesco Mobile.
The launch of ‘O2 Satellite’ will bring a welcome brand halo-effect. Limitations of satellite direct-to-device both make the consumer proposition a tricky one, and protect the mobile industry from cannibalisation.
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.
Net neutrality in the UK: Telco opportunities in TV?
3 January 2024Ofcom’s final statement on net neutrality addresses most of our prior concerns, leading to opportunities for UK telcos to effectively address internet congestion, and monetise their network capabilities.
BT is looking to take advantage of its new freedoms with new TV distribution services, which could save network capacity, improve user experience and earn it a share of the content distribution value chain.
We think that there are many other attractive opportunities, but telcos will have to work hard to sell any of them given the need to work together and reverse the bad blood that has developed with many content providers.
Mobile coverage: The search for ubiquity
16 April 2026UK mobile coverage/quality significantly lags that of its European peers; this really matters, for both consumers and the wider economy, and for both existing services and a range of potential new ones.
Improving coverage will likely require a variety of techniques, from antennas in space to antennas inside shopping centres, and fully utilising the entire range of available spectrum, from sub-1GHz to mmWave.
Network quality competition sparked by the VodafoneThree merger and network rebuild could drive improvements from all three operators, but significant government help is required to ensure this.
Service revenue worsened by 1ppt this quarter to -1.7%, but this is heavily distorted by one-off factors, in particular the blowback from O2’s controversial price increases.
For the same reason, MVNOs enjoyed their best quarter ever, particularly Sky and Tesco Mobile.
The launch of ‘O2 Satellite’ will bring a welcome brand halo-effect. Limitations of satellite direct-to-device both make the consumer proposition a tricky one, and protect the mobile industry from cannibalisation.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.
Net neutrality in the UK: Telco opportunities in TV?
3 January 2024Ofcom’s final statement on net neutrality addresses most of our prior concerns, leading to opportunities for UK telcos to effectively address internet congestion, and monetise their network capabilities.
BT is looking to take advantage of its new freedoms with new TV distribution services, which could save network capacity, improve user experience and earn it a share of the content distribution value chain.
We think that there are many other attractive opportunities, but telcos will have to work hard to sell any of them given the need to work together and reverse the bad blood that has developed with many content providers.