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Mobile Network Providers - UK - February 2015
Introduction
 
The mobile network provider market may see some shake up over 2015, with BT’s purchase of EE moving the incumbent fixed-line provider back into the mobile sphere for the first time since it divested itself of O2 (née BT Cellnet) in 2002, undoubtedly with an eye toward offering triple- or quad-play bundles including a mobile element.

In a market with less than 2% change in market value year on year since 2008, this may be just the approach to break into rich new revenue streams – but it may also prove a damaging distraction, running aground on the same lack of interest for quad-play bundles that fixed-line operators have been encountering in consumers for years.

This report examines these issues, as well as the network operator and type of mobile connection consumers currently have. It also looks at their contract duration, the amount they pay monthly for their phone service and the motivations they had in choosing their current provider. Finally, it looks at consumer attitudes and feelings about operator-provided mobile wallets. 

Definitions
This report looks at the scope of mobile network usage by consumers.

Mobile networks are defined as networks providing either data, voice or SMS 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 – pre-paid 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.

Pre-paid is better known to consumers as “pay-as-you-go”, 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.

Historical market size data for this report is taken from the Ofcom Communications Market Report 2014, with forecasting carried out by Mintel.

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. Market size also covers the value of those connections at retail.

The “Big Four” are the four largest networks in the UK: Vodafone, EE, Three and O2.

Crown copyright material is reproduced with the permission of the Controller of HMSO and the Queen’s Printer for Scotland. 

Abbreviations
AMPU | Average Margin Per User
ARPU | Average Revenue Per User
DCMS | Digital Copyright Management System
DCMS | Department for Culture, Media & Sport
EBITDA | Earnings Before Interest, Taxes, Depreciation, And Amortization
EE | Everything Everywhere
EMEA | Europe, the Middle East and Asia
MBNL | Mobile Broadband Network Limited
MVNO | Mobile Virtual Network Operator
NFC | Near Field Communication
NMR | Nielsen Media Research
OIBDA | Operating Income Before Depreciation And Amortization
SIM | Subscriber Information Module
SMS | Short Message Service

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