The GSMA has cited a CCS Insight report as part of its focus on European mobile broadband. The GSMA’s press release refers to CCS Insight’s Mobile Broadband in Europe, 4Q09, which looks at pay-monthly mobile broadband access in Europe’s five leading markets: France, Germany, Italy, Spain and the UK.
The report highlights the spectacular growth that mobile broadband will experience in these markets, as well as reviewing the current state of tariffs and allowances.
Each chapter in the report provides a country-level overview of the mobile landscape, examines the proportion of revenue derived by operators from non-voice services, predicts mobile broadband subscribers and revenue, and analyses key mobile broadband tariffs.
Total subscribers to mobile broadband services in Europe’s five largest markets will rise from about 22 million at the end of 2009 to over 43 million by 2011. Growth in the number of subscribers will be tempered by falling average spending. Nevertheless, operators will reap substantial rewards: total revenue from mobile broadband access in the five major markets will rise from less than €6 billion in 2009 to more than €11 billion in 2011 (see Figure 1).
Figure 1. Mobile Broadband Revenue, Europe, 2007-2011
As mobile broadband access grows, operators will find their network capacity stretched. They will find further investment in infrastructure harder to justify as average spending declines, although the influx of new users will boost total revenues. As capacity comes under pressure, some operators may be forced to offer bundled Wi-Fi access, unloading some of the traffic onto other networks. Operators with fixed-line assets will be well placed as traffic increases, and some, such as Telefonica in Spain, already offer inclusive Wi-Fi access.
There is currently no consistency in mobile broadband access across Europe’s five major markets. Subscribers in the UK enjoy some of the lowest average prices per gigabyte, thanks in part to fierce competition between the country’s five network operators, while those in France pay on average twice as much as their UK counterparts (see Figure 2).
Figure 2. Key Mobile Broadband Tariffs and Averages, Europe, 4Q09
Most of Europe has adopted volume-based pricing, with operators charging a flat fee for mobile broadband access up to a predefined limit. However, policies vary once that limit is reached. In Germany, most operators throttle network speeds (often to 50 Kbps); in the UK, some operators charge for excess data; others appear to have no strict limits.
In Italy, most mobile broadband tariffs are time-based, charging for access by the hour or by the day. Data limits are effectively set by network speeds, making direct comparisons difficult. We expect operators in Italy will fall in line with the rest of Europe from 2010, introducing more flat-rate tariffs with volume-based limits.
In some markets, challenger networks are driving mobile broadband access forward. In the UK, 3 has set its sights on providing users with an experience based on data, rather than just talk and text. Its mobile broadband prices are among the most competitive in Europe. In other markets, challenger brands with limited network coverage are focussing on more modest offerings or providing a bare minimum of services. For example, Bouygues in France and Yoigo in Spain advertise a single mobile broadband tariff each.
Competition — or lack of it — will have a huge impact on the adoption of mobile broadband services. France needs a fourth operator to stimulate its moribund market; the UK’s high rate of adoption is a product of fierce rivalry between the country’s five networks; and in Germany, the dominance of T-Mobile and Vodafone has seen competition spring up beyond traditional channels, with mobile broadband available from food retailers, coffee shops and pharmacies.
Prepaid services are still nascent in some markets, and the variable nature of the cost of a prepaid account makes comparisons difficult. However, as prepaid mobile broadband access grows across Europe, we anticipate that future editions of this report will cover prepaid accounts.
For information or for a PDF summary of the report, please contact CCS Insight on +44 (0)8450 574223 or e-mail info@ccsinsight.com