With the recent merger of T-Mobile and Orange in the U.K., the new operator, dubbed “Everything Everywhere,” now is leading the wireless pack, according to Pyramid Research.
Giant BT is projected to lose 6 percent of its marketshare, in line with the expansion of the entire mobile segment at the expense of fixed market between now and 2015. “Predominantly mobile operations will, in turn, increase their share of revenue in the same period,” the research firm notes. “This trend will be particularly pronounced in the case of Everything Everywhere.”
The report, “U.K.: BT Faces More Market Share Losses as Mobile Services Take Hold,” says in part that the British communications market will generate a cumulative “revenue opportunity” of $376 billion during the next five years, driven by “expected sizable investments” in new high-speed broadband access infrastructure along with 3G+ network upgrades and coverage expansion.
“Driven by skyrocketing uptake of iPhones and other smartphones, U.K. mobile data revenue will grow at a CAGR of 12.7 percent between 2010 and 2015, when it will account for 47.5 percent of total mobile revenue,” notes Stela Bokun, senior analyst at Pyramid.
Adds Bokun, "The U.K. mobile market, which hosts four mobile operators and a number of MVNOs, has gone through major turmoil with the merger of T-Mobile and Orange in 2010. The two (merged) operators, which had roughly 21 percent of the market share of subscriptions each in 2009, now controls around 42 percent of the mobile services market."
"As the two operators begin to benefit from economies of scale achieving a number of operational synergies, their share of subscriptions will see a significant rise of roughly 4 percentage points by 2015 and their share of the total U.K. telecom service revenue will grow by 3 percentage points by 2015," Bokun explains.
The Current U.K. Scenario
Like every other region of the world, the U.K. has been suffering as a result of the global economic crisis. Indeed, the telecom market there declined by 2.3 percent in 2009, Pyramid says, generating $57.6 billion in service revenue. The mobile market declined roughly 2 percent, while fixed services fell 7 percent.
However, the demand for pay-TV services is hot — seen as a cheaper alternative to other forms of entertainment – and revenues in that vertical grew last year by 8 percent.
There appears to be light at the end of the telecom/wireless economic tunnel, though. According to Pyramid, new regulatory initiatives, including a 4G spectrum auction planned for late 2011 as well as some newly proposed wholesale broadband access policies, will spur market competitiveness, “resulting in an increased revenue pie for all U.K. service providers.”
The research firm continues, “Investments in new access technologies will contribute to a strong growth of broadband-based services in the fixed arena. Only BT will invest $2.3 billion in its fiber network to make fiber-based services available to at least 40 percent of households in 2012. On the mobile side, mobile data and enterprise services targeting the SMB segment will generate the most attractive revenue opportunities. Prepaid mobile broadband and a variety of M2M applications will see the highest adoption rates through 2015.”