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Four mobile network operators are indentified in the UK by 'The European Telecoms Directory 2011 :: MNO, MVNO, Fixed & WiMAX'.
The UK market also consists of 4 geopolitical areas, namely England, Scotland, Wales and Northern Ireland. For mobile phone purposes, various islands also have their own operators, such as the Isle of Man (located in the Irish Sea between North West England and Ireland); and the Channel Islands, notably Jersey and Guernsey.
At the end of 2007 the UK had some 73.1 million mobile subscribers, which represented 9 percent of the European mobile subscriber market.
IE Market Research Corp. in its United Kingdom Mobile Operator Forecast reported that the overall subscriber base in UK is still increasing, and the number of total subscribers will change from our projected 75.9 million in 2008 to 78.0 million in 2010, with wireless penetration expected to reach 126.0% in 2010.
The four primary operators are 3 UK, Everything Everywhere, Telefonica O2 and Vodafone. Everything Everywhere was formed when Deutsche Telekom and France Telecom agreed in November 2009 to combine their UK operations, T-Mobile and Orange, into a 50:50 joint venture company, formally launching on July 2010. France Telecom has subsequently announced in September 2011 that it is henceforth to be known as 'Orange', a brand which could gain increasing global recognition as it moves into emerging markets, notably in the Middle East and Africa. Plans were originally announced in early 2009, and the change will be implemented in 2011/2012 starting with a change to the e-mail addresses of staff members.
According to United Kingdom - Mobile Market Insights, Statistics and Forecasts the UK has one of the largest mobile markets in Europe, both in revenue and in the number of subscribers. It is served by four major providers - following the significant merger of Orange and T-Mobile - which have all launched 3G services, as well as by a growing number of low-cost MVNOs. The market is characterised by new developments in advanced data services provided over upgraded networks, the bundling of mobile as a quad-play service, and regulatory controls on charges and fees. Mobile penetration is above the EU average, yet subscriber growth remains strong as consumers adopt additional SIMs as well as business-oriented devices and smartphones on various platforms.
Fierce competition has forced operators to concentrate on packaging service bundles and on promotions, and explore applications such as mobile searching and advertising facilities. ARPU has been falling steadily for all operators, with growing mobile data use offsetting lower voice, interconnection and roaming tariffs. The market can expect considerable changes during the next two years as operators prepare their business plans to accommodate spectrum auctions in 2012 and adjust to the refarming of 2G spectrum for 3G use. This report surveys the UK’s mobile market in 2011, providing an overview of mobile statistics, regulatory issues and technologies. It also profiles the major operators and MVNOs, and looks ahead to mobile developments in coming years.
Vodafone has sold a 5.5% stake in Indian division Essar and 44% stake in SFR; Everything Everywhere reports 1.1% fall in service revenue in H1 2011.
Competition among network operators has induced them to provide similar pricing and usage models, commonly including between 3GB and 10GB per month. This has substantially increased consumer use of mobile data. Low-key data applications such as SMS dominate the market while mobile TV, though widely available, has thus far failed to capture public attention. This report surveys the UK’s mobile data market in 2011, providing an overview of 3G developments, regulatory issues and technologies. It also profiles the major operators, presents statistics on non-voice services, and analyses developments in mobile TV and mobile application stores.
For more on Key developments see United Kingdom - Mobile Data Market Insights - 3G, 4G and Forecasts, but of particular note Ofcom claims 4G spectrum efficiency gains of up to 200% on 3G; 800MHz and 2.6GHz auction developments; Big Three m-commerce initiative; UK Broadband LTE developments in 3.5GHz band; smartphone penetration to reach 50% by end-2010; Everything Everywhere and BT Wholesale trial LTE in the 800MHz band; NFC launches show great promise for mobile payments; and potential LTE interference with DTTV in 800MHz band.
Business Monitor International's United Kingdom Telecommunications Report expects the mobile market to expand, but will do so at a much slower rate as it approaches saturation. At this stage of market development, changing competitive dynamics and new patterns of revenue generation are becoming increasingly significant relative to subscription growth. The contraction in the fixed-line market will also continue at a slower rate as operators increase bundled services.
Vodafone, O2 and Everything Everywhere reported rising ARPU for Q310. While the rise in ARPU is relatively modest at about GBP0.5 per month, its significance stems from the reversal of a long-term trend of falling ARPU since Q308. ARPU remains some way off its peak in Q307. However, it is significant that the increase has been driven by growth in data revenues. Vodafone’s data revenues have risen from GBP89mn in Q307 to GBP184mn during Q310. This corresponds to an average of 17.2% q-oq growth over 3 years, outpacing messaging and voice revenue growth, although from a lower base. While data revenue growth has been less pronounced for the other operators BMI notes it made a significant contribution to respective improvements in ARPU. We expect growth in data revenues to continue as Everything Everywhere reported 64% of contract phones sold in Q310 were smartphones, compared to 42% Q409, and projections are that this will increase. Ofcom reports similar figures for the whole market comparing Q209 and Q210.
Incidentally United Kingdom Telecommunications Report 1Q 2011 contains the consolidated operational and financial results of Everything Everywhere, the new joint venture company of running the merged operations of T-Mobile UK and Orange UK. The new company is now the largest mobile operator in the UK with a market share of around 36.5%. Perhaps the most notable point in the figures released by the company is the sharp and unexplained fall in consolidated subscriber figures at the end of June 2010 compared to March 2010. This led to a significant contraction of the total subscriber base of the UK mobile market at the end of Q210. TelecomsMarketResearch wonders if this reflected the number of duplicated users, who subsequently allowed their pre-paid accounts to lapse once they effectively could roam over the previously competitor network.
A similar situation - although on a larger scale - exists in Africa, where the number of users with duplicated accounts on rival networks is put as high as 50%. This is a reflection of poor network coverage, particularly outside the urban areas. Although the UK is a relatively sophisticated market, there remained significant coverage gaps, even in small towns. This was aggrevated for users with 3G dongles, finding that many motorways in the country have excellent coverage, whereas many rail routes do not.
Data from all the operators showed that there were 73.824mn subscribers at the end of Q210, down by 7.7% q-o-q due to subscriber losses by Everything Everywhere and Vodafone in the three months to June 2010. However, the UK mobile market experienced subscriber growth in Q310 after declining for two successive quarters, adding 577,000 subscribers, resulting in a total of 74.325mn. Similarly, Q310 also saw the reverse of the trend of declining market operating revenue dating to Q309, with operators reporting a rise in operating revenues to GBP 3,198 million.
BT continues to lead in the broadband market although the market is not concentrated with BT as Talk Talk migrated Tiscali subscribers onto its own network. Other alternative providers, including O2 and Orange, have reported strong uptakes of their broadband services. Cable operator Virgin Media and satellite broadcaster BSkyB have also reported strong broadband subscriber growth on their networks. At the end of Q310, BT reported a retail broadband base of 5.32mn and wholesale broadband customer base of 8.013mn. BT claims to be on track with plans to roll out superfast fibre optic broadband to two-thirds of UK households by 2015.
Although the fixed-line sector has been in a state of decline for years now, and is likely to remain so in the short term, we see it experiencing increased activity in the medium-to-long term. One key factor we expect to have an impact on the sector in the long term is the IPTV initiative Youview, formerly Project Canvas. In June 2010, the BBC Trust gave its approval for the project that brings together members from the telecoms and broadcasting industries. Youview was officially unveiled in September 2010 and is expected to launch commercially in early 2011. With BT having received permission to offer triple-play packages, we expect it and Talk Talk to offer bundled packages including fixed-line services.