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United Kingdom Telecommunications Report Q4 2011
Business Monitor International, Nov 2011, Pages: 119
The Q411 update to 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 operator tables for converged service providers BT, Virgin Media and BSkyB at the end of the internet market data analysis section.
We continue to forecast the mobile market will reach 84.074mn subscribers by 2015. However, we expect market growth to decelerate as the market penetration increases, falling to 2% growth pa in 2015. In contrast we forecast continued strong growth in 3G subscriptions, which will increasingly become the norm, increasing to 58.828mn subscriptions in 2015. This growth trend will be underpinned by the consumer demand for smartphone devices. 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 Q211, countering increases to ARPU levels in H210. Competitive pressures between operators fighting over postpaid subscriptions and seeking to migrate prepaid to postpaid subscribers placed downward pressure on postpaid ARPUs. However, it should be noted that appreciation of the euro versus the pound in Q211 had a negative impact on O2's reported ARPU. Despite this decline, we believe ARPU declines will plateau as we expect growth in data revenues to continue as Everything Everywhere reported 80% of new contract customers signed up to smartphone package in Q211.
BMI calculates that BT continues to lead in the broadband market with 28.6% market share in Q111, up from 27.6% in Q110, although the market is highly competitive with the presence of alternative providers TalkTalk, the second largest provider following the integration of Tiscali's subscribers onto its network, and cable operator Virgin Media. Virgin Media reported positive Q211 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.
Satellite broadcaster BSkyB has also reported strong broadband subscriber growth on its network, reaching 3.335mn broadband subscriptions by the end of June 2011, recording impressive 27.1% y-o-y growth. In addition to a strong competitive environment the UK is also beginning to see investment in next generation infrastructure, BT claims to be on track with plans to roll out superfast fibre-optic broadband to two-thirds of UK households by 2015. Other alternative providers, including O2 and Orange, have reported strong uptakes of their broadband services
Meanwhile, the UK returned to the top of BMI's Western European Telecommunications Market Business Environment Ratings, leapfrogging France. Improvements to the UK's Industry Rewards and Country Rewards scores are primarily responsible for the increase in its score.
Business Monitor International's 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 United Kingdom's telecommunications industry.
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