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United Kingdom Telecommunications Report Q3 2011
Business Monitor International, July 2011, Pages: 112
Business Monitor International's the United Kingdom Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the United Kingdom's telecommunications industry.
The Q311 update of the UK Telecommunications Report contains an analysis of market trends and data using the latest data released by fixed-line and broadband providers, mobile operators and the telecoms regulator Ofcom. It also contains our updated forecasts for the fixed, mobile and broadband sectors looking forward through to the end of 2015. For the first time, it also includes BMI’s forecasts for mobile monthly blended ARPU rates up until 2015, by operator.
We forecast the mobile market to reach 84.074mn subscribers by 2015. However, we expect the market to grow but decelerate as the market penetration increases. In contrast we forecast continued strong growth in 3G subscriptions which will increasingly become the norm, increasing to 53.511mn subscriptions in 2015. 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 declining average revenue per user (ARPU) for the second successive quarter in Q111. Competitive pressures between operators fighting over postpaid subscriptions and seeking to migrate prepaid to postpaid subscribers placed downward pressure on postpaid ARPUs. Despite this decline, we believe ARPU declines will plateau as 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.
BT continues to lead in the broadband market although the market is not concentrated with BT as TalkTalkTalkTalk migrated Tiscali subscribers onto its own network. Cable operator Virgin Media reported positive Q111 results to follow a particularly strong 2010, with positive revenue and subscriber growth across its business. Further, with the launch of 100Mbps broadband and a new set top box to rival Sky+ it will likely have another positive year in 2012. Other alternative providers, including O2 and Orange, have reported strong uptakes of their broadband services. Satellite broadcaster BSkyB has also reported strong broadband subscriber growth on their networks. At the end of Q111, BT reported a retail broadband base of 5.7mn and wholesale broadband customer base of 8.112mn. BT claims to be on track with plans to roll out superfast fibre-optic broadband to two-thirds of UK households by 2015.
This update also contains information on a number of developments in the UK market including the introduction of spectrum trading for mobile frequencies and developments around the operator response to the rules announced for the forthcoming 4G auction (see broadband, fixed-line and regulatory environment sections). We also provide an analysis of Fujitsu’s announcement that it plans to roll out a fibre network in partnership with Virgin Media and TalkTalk to challenge BT in this area. Finally, we analyse the Microsoft trial of Super WiFi announced in June 2011, in terms of the potential boost to next generation roll-out and the potential implications in the mobile market.
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