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
UK mobile revenue growth was steady in Q4 at -3.9%, only a fractional drop from -3.8% in the previous quarter, with underlying growth unchanged, and contract subscriber growth and ARPU trends also unwavering, though the market solidity masked more dramatic developments in service offerings with the launch of the new EE umbrella brand and its 4G service
With the 4G spectrum auction now concluded, we can expect Vodafone and O2 to launch 4G services in the summer and H3G in the autumn; EE is looking to stay one step ahead with its recently announced speed doubling, and the intensity of marketing around 4G may even help its own service
While 4G will provide the talking points, actual financial results in 2013 will depend more on 3G base level pricing remaining firm; the signs so far are positive, with O2 having nudged up its core pricing, and mid-contract price increases scheduled by O2 and EE
Next-generation consoles from Sony and Microsoft, expected late this year/early next, will kick off a new cycle for the games industry, but enter a much more competitive market
Smartphones and tablets offer an alternative gaming model, with more variety, lower cost, greater convenience and, crucially, rapidly increasing sophistication
These new platforms are expanding gaming to a much larger audience, but also increasingly competing with consoles for the time and attention of core gamers. This could be the last recognisable console cycle
German unbundlers are in decline, unable to match cable for price or bandwidth, or to invest in new fibre networks. Vodafone, the second largest unbundler, must choose between consolidating and divesting Merging with Kabel Deutschland would deliver fixed line synergies – with high execution risks. But, based on the French and Spanish experiences, we doubt that a quad play strategy (synonymous with a price war) would generate value Mobile operators’ fixed line ventures are also in decline elsewhere in Europe, but cable is not always to blame, with pure play fixed line altnets also tending to outperform them, suggesting that genuine cross-selling advantages are marginal at best
The UK 4G spectrum auction raised a total of £2.3bn, broadly in line with similar auctions, although the highest quality spectrum raised less and the lowest quality spectrum raised more than might have been expected
The main short term consequences are as was expected beforehand; Vodafone and O2 will launch 4G services around May/June 2013 and H3G will launch in October 2013
Longer term, O2 and H3G may suffer from their lack of 2.6GHz spectrum, although with other bands likely to come free within the next ten years this may not affect them
H3G and T-Mobile have agreed to fully share their 3G networks, with their networks being roughly doubled to a combined 13,000 sites over the next two years
H3G has launched the ‘Skypephone’, a Skype-branded phone with a free Skype VoIP service fully integrated into the handset
H3G’s revenue growth has slowed significantly, with H1 revenue flat on the previous half, driven by steady churn and a reduced investment in customer acquisition
French altnet Neuf Cegetel is buying Club Internet from Deutsche Telekom for an estimated €500 million and will overtake its rival Free as the #2 on the DSL market, still way behind Orange
The new consumer data tariffs from Vodafone and Orange in the UK continue the trend towards dramatically lower data prices for high end users, although they are cunningly structured to involve more moderate increases for low end users