What you need to know
The market for mobile network connections is relatively stable and mature, with annual market value changes between 2010 and 2015 never in excess of 3 percentage points thanks to steady and easily predictable demand as well as close monitoring by Ofcom and the EU.
Due to pressure on prices, competition from virtual network providers and quad-play operators and a reduction in revenues from secondary sources such as out-of-bundle traffic and roaming charges, Mintel forecasts annual losses of around 1% through to 2019, when revenues are expected to hit a trough at £1.5 billion before starting to pick up again in 2020 as 5G starts to be commercially rolled out.
Thanks to high levels of customer retention, the ‘Big Four’ – EE, O2, Vodafone and Three – directly control 70% of the market, but their leadership has been eroded by the growth of smaller virtual players such as budget provider GiffGaff (from 3% to 5%) and quad-play operators BT and TalkTalk.
Covered in this report
This report looks at the scope of mobile network usage by consumers.
Mobile networks are defined as networks providing either data, voice or SMS (Short Message Service) facilities down to a mobile device. Data delivered over Wi-Fi is not included under the “data” category.
Primarily, this report refers to the use of mobile networks through traditional mobile phones or smartphones. However, reference at times is made to tablet devices, as these can connect to mobile networks for data.
Network connections can come in two forms – prepaid and post-paid. The former involves buying credit for a phone, which is then worked through. The latter refers to the use of a handset with a monthly contract charge covering the previous month’s usage.
Prepaid is better known to consumers as “pay-as-you-go” (PAYG), and is referred to as such throughout the consumer sections of this report.
Similarly, “post-paid” is better known to consumers as “contract”, and is referred to as such throughout the consumer sections of this report.
Market size covers the volume of mobile network connections sold to consumers. This includes data-only tablet device connections, as well as dongle connections to a portable router designed to provide internet services by connecting to the mobile network, but it excludes M2M (Machine to Machine) connections.
The ‘Big Four’ is a term used to refer to the four largest networks in the UK: EE, O2, Three and Vodafone.
Virtual network operators are defined as mobile network providers which do not own the mobile network infrastructure and therefore rely on one of the Big Four to provide their services.
‘Triple-play’ refers to the supply of TV, broadband and landline services in a single bundle by the same provider. ‘Quad-play’ (Quadruple play) refers to the provision of a mobile service as part of a TV, fixed-line and internet bundle.
