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Mobile Network Providers - UK - February 2020

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
A stagnant subscriber base, with a decreasing monthly spend contribute to market decline
Figure 1: Mobile network providers’ market size and forecast, 2014-24
Companies and brands
O2 and EE are top providers but MVNO proposition gains ground
Figure 2: Mobile network provider, 2018 and 2019
The big four roll out 5G in 2019 across major cities in the UK
Vodafone and O2 infrastructure agreement to deliver faster 5G rollout
Vodafone showcases 5G capability at Ricoh Arena in Coventry
Virgin Mobile moves to Vodafone’s network from 2021
Three pioneers cloud-based core network in partnership with Nokia…
The consumer
SIM-only contracts continue to rise as consumers delay upgrading
Figure 3: Contract with a phone vs SIM-only vs PAYG, 2017-19
Users in longer-term contracts are down in 2019
Figure 4: Length of contract, 2018 and 2019
Ethical and environmental traits can add halo effect for providers
Figure 5: Factors influencing purchase decision, November 2019
Take-up of 5G contracts and handsets looks set to be a slow burn
Figure 6: Uptake of 5G phones and contracts, November 2019
Customers tend to stay loyal to network providers
Figure 7: Length of time with network, 2018 and 2019
Data allowances still a priority for consumers
Figure 8: Attitudes towards mobile contracts, November 2019
What we think
ISSUES AND INSIGHTS
Preventing churn and fostering brand loyalty can be short-term aims
The facts
The implications
Bringing 5G’s potential to life for consumers can help re-energise MNOs’ proposition
The facts
The implications
Mobile networks’ next battleground could be away from mobile phones
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Market continues to decline on back of mature consumer base and decreasing prices
SIM-only deals increase as those with longer-term contracts with providers go down
Ofcom launches a host of initiatives to encourage competition in the mobile market
Bundled services see a drop-off in 2018 as market reaches maturity
MARKET SIZE AND FORECAST
A stagnant subscriber base, with a decreasing monthly spend contribute to market decline
Figure 9: Market size and forecast for mobile network providers, 2014-24
Figure 10: Volume of mobile network connections, 2014-24
Figure 11: Value and volume of mobile network connections, 2014-24
Figure 12: Contract with a phone vs SIM-only vs PAYG, 2017-19
MARKET DRIVERS
Mobile minutes increasing gradually as fixed line use drops off
Figure 13: Average monthly voice call minutes per line/subscription, 2013-18
Decrease in international calling from mobiles
Figure 14: Outgoing mobile call minutes, by call type (bn), 2013-18
Bundled services see a drop-off in 2018 as market reaches maturity
Figure 15: Mobile retail revenue, by service (£ billion), 2013-18
Contract spend decreases as competition across the board hots up
Flagship smartphones’ price points can be a hindrance to the upgrade cycle
Figure 16: Average monthly payment of those with contracts on phone, 2017-19
Data use continues to rise on the back of 5G capacity…
…but take-up will likely be a slow burn
Figure 17: Total mobile data use, by subscription type, (PB) 2013-18
MNOs focus on 4G rollout to continue targeting not-spots and increased coverage in rural areas
Transparency and contract rules aim to increase fairness and transparency for mobile customers
Clearer signposting on cost implications for handset and airtime contracts
A challenge to industry to reduce bills across the board
Focus on delivering converged services can shift MNOs’ business models
Ofcom launches Text-to-Switch service to make it easier for consumers to change providers
Proposals to ban mobile providers selling handsets locked to their networks aimed to ease switching inconvenience
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
EE and O2 share top billing in Mintel’s research as most popular providers
EE, O2 and Vodafone go live with 5G service
Virgin Mobile will move from the EE network to the Vodafone network from 2021
BT outlines its future of connectivity
EE and Vodafone named top two providers in 2020 UK Mobile Benchmark test
O2 adds Apple Watch to its Custom Plans
MARKET SHARE
EE and O2 share top billing in 2019
Figure 18: Mobile network provider, 2018 and 2019
LAUNCH ACTIVITY AND INNOVATION
EE joins O2 and Vodafone in trials to provide 4G on London Underground
EE, O2 and Vodafone go live with 5G services…
…but Three delays its launch due to technical problems
Shared rural network agreement to bolster 4G coverage across the UK
Virgin Mobile will move from the EE network to the Vodafone network from 2021
Vodafone partners with Mencap to provide technological help to people with a learning disability
Vodafone prioritises cross-selling services to existing subscribers to drive growth
BT outlines its future of connectivity
Three aims to provide the fastest 5G network with partnership with Nokia
Vodafone showcases 5G capability at Ricoh Arena in Coventry
O2 adds Apple Watch to its Custom Plans
EE and Vodafone named top two providers in 2020 UK Mobile Network Test
Mobile providers eye strategic initiatives to boost ethical credentials and reduce environmental impact
Giffgaff pushes refurbished phones
Vodafone and Sky Mobile partner with Fairphone
Consumers need tech brands to take the lead
ADVERTISING AND MARKETING ACTIVITY
Advertising spend sees small decrease in 2019
Vodafone looks to “Unlimited” future
EE uses Rugby World Cup to consolidate its 4G positioning
5G focus could boost spend in 2020
Figure 19: Recorded above-the-line, online display and direct mail total advertising expenditure on mobile network services, by advertiser, 2016-19
Nielsen Ad Intel coverage
BRAND RESEARCH
Brand map
Figure 20: Attitudes towards and usage of selected brands, January 2020
Figure 21: Key metrics for selected brands, January 2020
Brand attitudes
Figure 22: Attitudes, by brand, January 2020
Brand personality
Figure 23: Brand personality – Macro image, January 2020
Figure 24: Brand personality – Macro image, January 2020
Brand analysis
Giffgaff joint top for levels of satisfaction
Figure 25: User profile of Giffgaff, January 2020
Tesco Mobile is the most recommended provider
Figure 26: User profile for Tesco Mobile, January 2020
O2 has the highest levels of brand awareness
Figure 27: User profile of O2, January 2020
EE is most used brand in the last 12 months
Figure 28: User profile of EE, January 2020
Three has work to do to stand out from the crowd
Figure 29: User profile of Three, January 2020
Virgin Mobile tops MVNO usage
Figure 30: User profile of Virgin Mobile, January 2020
Vodafone is the least recommended provider
Figure 31: User profile of Vodafone, January 2020
THE CONSUMER – WHAT YOU NEED TO KNOW
SIM-only contracts continue to rise as consumers delay upgrading
Users in longer-term contracts are down in 2019
Nearly 70% of PAYG users are spending £10 or less a month
Ethical and environmental traits can add halo effect for providers
Awareness of 5G is high amongst the majority, but knowledge of the details is low
Take-up of 5G contracts and handsets looks set to be a slow burn
Customers tend to stay loyal to network providers
Three in 10 are with a different provider for their current mobile contract
Data allowances still a priority for consumers
Mobile network providers can foster loyalty through transparency
CONTRACTS VS PAYG
SIM-only contracts continue to rise as consumers delay upgrading
Figure 32: Contract with a phone vs SIM-only vs PAYG, 2017-19
Users in longer-term contracts are down in 2019
Figure 33: Length of contract, 2018 and 2019
CONTRACTS AND PAYG SPENDING
Nearly 70% of PAYG users are spending £10 or less a month
Figure 34: Contract, SIM-only and PAYG spending, November 2019
CONSUMER PRIORITIES WHEN CHOOSING A NETWORK PROVIDER 
Ethical and environmental traits can add halo effect for providers
Figure 35: Factors influencing purchase decision, November 2019
AWARENESS AND INTEREST OF 5G
Awareness of 5G is high amongst the majority, but knowledge of the technology is patchy
Figure 36: Knowledge of 5G, November 2019
Take-up of 5G contracts and handsets looks set to be a slow burn
Demographics show typical early-adopter spike in intent to buy
Figure 37: Uptake of 5G phones and contracts, November 2019
CONTRACT LENGTH
Customers tend to stay loyal to network providers
Figure 38: Length of time with network, 2018 and 2019
SWITCHING BEHAVIOUR
Three in 10 are with a different provider for their current mobile contract
Text-to-Switch should reduce inertia
Figure 39: Switching behaviour, November 2019
ATTITUDES TOWARDS MOBILE CONTRACTS
Data allowances still a priority for consumers
Mobile network providers can foster loyalty through transparency
Figure 40: Attitudes towards mobile contracts, November 2019
CHAID ANALYSIS 
Methodology
Data still the calling point for younger males
5G provides the platform for data-focused deals to appeal
Figure 41: Mobile network providers – CHAID – Tree output, November 2019
Figure 42: Mobile network providers – CHAID – Table output, November 2019
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – THE MARKET
Figure 43: Value of mobile network connections, 2019-24
Figure 44: Volume of mobile network connections, 2019-24

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