Table of Contents
Overview
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- What you need to know
- Products covered in this Report
Executive Summary
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- The market
- Market struggling for growth as price pressure rises
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- Figure 1: Value of retail mobile networks connections in the UK, 2012-22
- 4G connections continue to surge with 5G on the horizon
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- Figure 2: Number of mobile connections with access to 4G services, 2013-16
- Companies and brands
- Big four networks continue to dominate three quarters of market
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- Figure 3: Network usage, October 2017
- The consumer
- Clear rise in popularity of SIM-only contracts
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- Figure 4: Network contract type, October 2016 and October 2017
- Nearly a quarter of people pay £10 or less per month
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- Figure 5: Contract price, October 2017
- Millennial data consumption driving up average contract payment
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- Figure 6: Contract price, by selected demographics, October 2017
- Nearly a quarter of people have 6GB+ per month data allowance
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- Figure 7: Data allowance, October 2017
- Two thirds of people have been with their network over two years
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- Figure 8: Time with network, October 2016 and October 2017
- Vast majority are satisfied with their network provider
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- Figure 9: Network Satisfaction, October 2017
- Data remains the leading reason for switching network
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- Figure 10: Network switching factors, October 2017
- What we think
Issues and Insights
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- Fight the threat of eSIMs by rewarding long-term customers
- The facts
- The implications
- Personalised data allowances could boost loyalty
- The facts
- The implications
The Market – What You Need to Know
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- Market struggling for growth as price pressure rises
- Ofcom reports increasing shift to inclusive bundle services
- Blended average monthly revenue rises after years of decline
- Necessity of smartphones will drive connections forward
- Growth in connected devices has driven network connections
- 4G connections continue to surge with 5G on the horizon
- Continued reliance on mobile calls as fixed lines decline
Market Size and Forecast
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- Market struggling for growth as price pressure rises
- Leading network providers report mixed results in 2017
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- Figure 11: Value of retail mobile networks connections in the UK, 2012-22
- Figure 12: Value of retail mobile networks connections in the UK, 2012-22
- Ofcom reports increasing shift to inclusive bundle services
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- Figure 13: Mobile retail revenue, by service (£ billions), 2011-16
- Blended average monthly revenue rises after years of decline
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- Figure 14: Average monthly revenue per subscription, by contract type, 2011-16
- Necessity of smartphones will drive connections forward
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- Figure 15: Volume of retail mobile network connections in the UK, 2012-22
- Figure 16: Volume of retail mobile network connections in the UK, 2012-22
- Forecast methodology
Market Drivers
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- Growth in connected devices has driven network connections
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- Figure 17: Ownership of smartphones, smartwatches and tablets, January 2013-June 2017
- iPhone X drives monthly contract fees to a new high
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- Figure 18: Apple’s iPhone X
- 4G connections continue to surge, with 5G on the horizon
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- Figure 19: Number of mobile connections with access to 4G services, 2013-16
- Removal of EU roaming charges aids usage abroad
- Continued reliance on mobile calls as fixed lines decline
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- Figure 20: Outgoing fixed and mobile voice call volumes, 2010-16
Companies and Brands – What You Need to Know
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- Big four networks continue to dominate three-quarters of market
- EE remains the most popular network provider
- O2 Oops offers inclusive screen repair
- Apple Watch 3 introduces cellular service
- Lack of market growth putting pressure on advertising budgets
- O2 and Vodafone are more trusted but rarely deemed good value
Market Share
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- Big four networks continue to dominate three quarters of market
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- Figure 21: Network usage, October 2017
- EE remains the most popular network provider
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- Figure 22: Network usage, October 2016 and October 2017
Launch Activity and Innovation
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- O2 Oops offers inclusive screen repair
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- Figure 23: O2’S Oops campaign
- Ease of switching networks boosted by eSIMs
- Apple Watch 3 introduces cellular service
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- Figure 24: Apple Watch 3 with cellular service
- Vodafone Passes offer unlimited data for key apps
- Three launches Go Binge service
Advertising and Marketing Activity
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- Lack of market growth putting pressure on advertising budgets
- Big four all retain strong TV advertising presence
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- Figure 25: Recorded above-the-line, online display and direct mail total advertising expenditure on mobile network services, by advertiser, 2015-17
- Nielsen Ad Intel coverage
Brand Research
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- Brand map
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- Figure 26: Attitudes towards and usage of selected brands, October 2017
- Key brand metrics
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- Figure 27: Key metrics for selected brands, October 2017
- Brand attitudes: O2 and Vodafone are more trusted but rarely deemed good value
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- Figure 28: Attitudes, by brand, October 2017
- Brand personality: Vodafone perceived as a the least fun brand
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- Figure 29: Brand personality – Macro image, October 2017
- Efficient, reliable service is boosting perceptions of EE and O2
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- Figure 30: Brand personality – Micro image, October 2017
- Brand analysis
- Giffgaff the most recommend brand by users
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- Figure 31: User profile of giffgaff, October 2017
- EE‘s upbeat brand image weighted towards men and Millennials
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- Figure 32: User profile of EE, October 2017
- O2 is a reliable brand that retains cutting-edge appeal
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- Figure 33: User profile of O2, October 2017
- Three struggles to resonate as a brand
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- Figure 34: User profile of Three, October 2017
- Vodafone the least recommended network by users
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- Figure 35: User profile of Vodafone, October 2017
The Consumer – What You Need to Know
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- Clear rise in popularity of SIM-only contracts
- The majority of people sign up to 18 months or more
- Nearly a quarter of people pay £10 or less per month
- Nearly a quarter of people have 6GB+ per month data allowance
- Younger age groups paying for bigger data allowances
- Two thirds of people have been with their network over two years
- Vast majority are satisfied with their network provider
- Data remains the leading reason for switching network
Network Contracts
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- Clear rise in popularity of SIM-only contracts
- Increase in payment methods means networks must offer flexibility
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- Figure 36: Network contract type, October 2016 and October 2017
- Older Millennials most likely to have contracts with phone
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- Figure 37: Contract type, by generation, October 2017
- The majority of people sign up to 18 months or more
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- Figure 38: Contract length, October 2017
- Annual contracts rise to 24% from 20%
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- Figure 39: Contract length, October 2016 and October 2017
- Older Millennials focused on long-term, consistent contracts
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- Figure 40: Contract length, by selected demographics, October 2017
Price of Contract
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- Nearly a quarter of people pay £10 or less per month
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- Figure 41: Contract price, October 2017
- Increasing shift from mid-level to expensive contracts
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- Figure 42: Contract price, October 2016 and October 2017
- Women more likely to pay higher contract prices
- Millennial data consumption driving up average contract payment
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- Figure 43: Contract price, by selected demographics, October 2017
- Rewarding long-term customers could boost higher price contracts
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- Figure 44: Contract length, by average contract price, October 2017
- The majority of PAYG customers pay under £10 per month
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- Figure 45: PAYG spend, October 2017
Data Usage
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- Nearly a quarter of people have 6GB+ per month data allowance
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- Figure 46: Data allowance, October 2017
- Younger age groups paying for bigger data allowances
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- Figure 47: Data allowance, by generation, October 2017
- Over half of people do not use their entire data allowance
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- Figure 48: Data usage, October 2017
Network Satisfaction
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- Two thirds of people have been with their network over two years
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- Figure 49: Time with network, October 2016 and October 2017
- Vast majority are satisfied with their network provider
- Additional services and promotions can boost satisfaction
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- Figure 50: Network Satisfaction, October 2017
- Phone calls are the preferred contact method…
- …but Millennials are more focused on digital contact points
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- Figure 51: Network contact preferences, October 2017
- Half of people focus on one contact method
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- Figure 52: Repertoire of network contract preferences, October 2017
Network Switching Factors
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- Data remains the leading reason for switching network
- Millennials most likely to switch for additional data and streaming services
- New smartphones still a major draw
- Free screen repair is likely to grow in importance
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- Figure 53: Network switching factors, October 2017
- Millennials finding more reasons to change network
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- Figure 54: Repertoire of network switching factors, October 2017
- One third of people are likely to change contracts upon expiry
- Men much more likely to change contracts
- Networks must push family bundles to reduce switching
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- Figure 55: Likelihood of switching in-contract versus end of contract, October 2017
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
- Market size and forecast
- Fan chart forecast
- Value
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- Figure 56: Best- and worst-case forecast for the value of the UK mobile network providers market, 2017-22
- Volume
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- Figure 57: Best- and worst-case forecast for the volume of the UK mobile networks providers market, 2017-22
- Brand research
- Brand map
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