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United Kingdom Telecommunications Report Q3 2009
Market |
Telecommunications |
Report Type |
Market Research |
Country |
United Kingdom |
Published |
7 August 2009 |
Number of Pages |
99 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
Speculation over the future of T-Mobile UK has been growing
In the United Kingdom Telecommunications Report for Q309 we extended our fixed-line and broadband market data analysis sections, and as a result we have left the mobile market data analysis section unchanged, to be updated in full in the subsequent quarter .
The UK remains at the top of our Business Environment Rankings table for Western Europe despite seeing its Telecoms Market score fall slightly as pressure on ARPU rates intensifies amid the country’s economic downturn. However, the UK’s telecoms sectors are heavily geared towards the attraction of higher value customers to advanced services such as 3G, super high-speed broadband and IPTV, which will go some way to countering competitive and economic pressures on ARPU.
As a consequence of the popularity of prepaid mobile services in the UK, we believe that the market holds a large number of inactive SIMs which has left some growth opportunities. Nevertheless, penetration in the mobile sector surpassed 125% in 2008 and we are expecting growth to continue slowing over the remainder of our forecast period as the market approaches saturation. A further risk to growth is consolidation in the mobile sector. Speculation over the future of T-Mobile UK has been growing, with media reports suggesting Vodafone, Telefónica and France Télécom are all considering bidding for the Deutsche Telekom-owned operator. At the time of writing no formal confirmation had been given regarding whether or not Deutsche Telekom would divest T-Mobile UK, but if it does go through, growth in the sector would likely slow as pressure on prices relaxes .
The UK’s fixed-line sector is in a steady state of decline as it continues to suffer from fixed-to-mobile substitution and the growing popularity of VoIP services. Nevertheless, fixed-line penetration was still above 50% at the end of 2008 as the sector continues to hold up well, driven by two factors. The first factor is the abundance of flat-rate tariffs offering inclusive minutes, which has resulted from intense competition between the incumbent BT and alternative operators such as Virgin Media and Carphone Warehouse, as well as competition with the different technological platforms. The second factor which is stemming the decline in the sector is the popularity of ADSL broadband, which currently requires a fixedline subscription. Once ‘naked’ ADSL is allowed we are expecting a sharp drop-off in the number of fixed-line subscriptions in the UK .
The acquisition of Tiscali UK by Carphone Warehouse in May 2009 has seen the emergence of a third contender for broadband market leadership in the UK, to compete alongside BT and Virgin Media. The acquisition makes Carphone the second largest broadband operator in the country, just behind BT. The UK’s broadband operators are attempting to connect their customers through their own network infrastructure and the unbundled local loop (ULL). While broadband speeds in the UK are underdeveloped compared to some of its regional peers such as France and Germany, networks are being developed. This year has seen Virgin Media upgrade its cable network to be capable of offering download speeds of up to 50Mbps, while BT has announced that it is in the process of upgrading its ADSL network to ADSL2+ capable of offering download speeds of up to 20Mbps. The development of next generation fibre networks was also given a boost by the release of the Digital Britain report, with BT saying it would accelerate its fibre network deployment.
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