In this report we show the findings of our 2012 UK mobile user survey. The report is a wide ranging analysis of the mobile market based on our consumer research, focusing on the competitive landscape among the mobile operators and smartphone manufacturers, and the changing consumer behaviour that has and will continue to impact the market
In this presentation we show our analysis of revenue growth trends for mobile operators in the top five European markets (UK, Germany, France, Italy and Spain). The historical analysis is based on the published results of the operators, although they include our estimates where their data is inconsistent or not complete. A copy of the underlying data in spreadsheet format is available to our subscription clients on request.
CPW’s key operating metrics worsened again in the March quarter, with connection volume growth dropping to -19% and like-for-like revenue growth dropping to -5.5%
Weakness in the UK prepay market continued to affect CPW’s results, with volumes again down 30-40%, but contract sales did not mitigate this as much as last quarter, with growth in the UK but declines in continental Europe
Prepay is not likely to improve until the end of 2012, as the volume decline annualises out and more smartphones are available at prepay price points, and contract recovery is dependent on economic recovery
EE’s subscriber growth in Q1 was solid enough given a market slowdown, but disappointing given T-Mobile’s Full Monty tariff launch. With O2’s ‘On and On’ launched in late March, the outlook for subscriber growth will be tougher in the rest of 2012
Service revenue growth was more encouraging, improving by 1.5 ppts after a disappointing Q4. This appears to have been largely volume driven (i.e. existing users using their handsets more), which is encouraging for the operators yet to report Q1 figures (i.e. Vodafone and O2)
The company’s main competitive weapon going forward should be the quality of its network – even post-consolidation it will have more 3G sites than any other operator and may be able to use its 1800MHz spectrum to gain a head-start in 4G. However, communicating that both brands have an outstanding network, without encouraging subscribers to migrate to the lower-priced T-Mobile, will be problematic
The London Olympics promise to be a major success for both the free-to-air broadcast licensees and the leading pay-TV platforms as a result of co-operative deals being forged between them
Recent distribution agreements with Sky provide the BBC and Eurosport with a massively bigger window to showcase their credentials in in-depth sports coverage and new technologies, especially 3D
For Sky, and assuming VMed in due course, there exist a number of potential indirect commercial benefits, as the message is sent out loud and clear that there is no better place to go for London Olympics free-to-air coverage than the pay-TV platforms
H3G’s European operations slightly improved underlying service revenue growth, and EBIT margin improved from 0% to 3%, but the latter figure was flattered by a change in handset subsidy accounting; without this change, EBIT would likely have been negative
The UK and Italian performances further diverged, with UK growth accelerating in H2 to +13%, and Italy decelerating to -14%, despite a renewed (and expensive) push for contract subscribers in Italy
The UK business has positioned itself well for the smartphone revolution, with its all-you-can-eat data plans particularly popular, although the resulting traffic surge may cause service quality problems in the future
In this presentation we show our analysis of revenue growth trends for mobile operators in the top five European markets (UK, Germany, France, Italy and Spain). The historical analysis is based on the published results of the operators, although they include our estimates where their data is inconsistent or not complete. A copy of the underlying data in spreadsheet format is available to our subscription clients on request.
Mobile operators, services and handset makers are diverging – they all come to the MWC but have increasingly little to say to each other as their businesses move in very different directions
In the context of -5% European mobile revenue growth, the MNOs at the MWC were a sober bunch, focusing on industrial services, defensive moves around messaging, and a (not unreasonable) plea to regulators for some relief
As competition in Android intensifies between hundreds of black plastic rectangles, the picture for OEMs looks tough but Google’s failure to make Android work well for developers may also start to bite, leaving an opening for Nokia and Windows Phone
The launch of Netflix in the UK and Ireland has ignited the debate on the threat from over-the-top video to pay-TV services from Sky, Virgin Media and BT
Unlike in the US, Netflix’s UK prospects and those of competitors such as Lovefilm, are fundamentally limited, given the availability of low priced pay-TV with strong on-demand components included for free
The impact of Netflix on the UK pay-TV industry is therefore likely to be even smaller than the (hard to discern) effect it has had in the US
On Wednesday Orange announced a simple new single tariff range for all its new contract users. Although there are some benefits to both consumers and Orange of tariff simplification, the main impact appears to be to increase the price of calls for off-peak users, which is a sensible strategy for Orange and consistent with other tariff increases we have seen recently. Orange may lose customers because of this, but it has helpfully given four weeks warning of the change to the other operators, who may react with changes of their own.
Weak economic growth is usually blamed, but we believe that other forms of communication are substituting for fixed voice calls. Substitution of fixed line calls by calls from mobile phones is increasingly less important. By contrast, our conclusion is that Internet-based communication (email and instant messaging) has recently become a far more important source of competition to fixed line voice calls.