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Mobile Network Providers - UK - February 2019

“People are increasingly favouring cheaper, more flexible SIM-only plans and are becoming more data-reliant. Therefore 5G could have a significant impact on mobile viewing habits as consumers get access to instant video streaming and downloading. Network providers will need to cater to bigger data allowances, although 5G is also likely to drive higher smartphone prices.”

– Zach Emmanuel, Consumer Technology Analyst

This report examines the following issues:

  • 5G introduction could accelerate the shift to SIM-only contracts
  • Data, not calls or texts, is the key battleground

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Rise in SIM-only contributes to overall market drop
              • Figure 1: Mobile network provider’s market size and forecast
            • Companies and brands
              • 5G innovation
                • Major networks announce range of rewards and partnerships to keep customers
                  • Netflix and Amazon Prime work with providers to offer streaming discounts
                    • Giffgaff continues to be most recommended network
                      • Consumers trust major networks but question marks over Vodafone
                        • The Consumer
                          • Contracts still king but SIM-only on the rise
                            • Figure 2: Contract with a phone vs SIM-only vs PAYG, October 2018
                          • SIM-only price well below regular contracts
                            • Figure 3: Sim-only vs contract with a phone prices, October 2018
                          • PAYG users spend the least
                            • Figure 4: PAYG prices, October 2018
                          • Millennials are the most likely to need large data allowances…
                            • Figure 5: Data use by generation, October 2018
                          • …and value mobile data most highly
                            • Figure 6: Importance of data allowance by generation, October 2018
                          • Customers tend to stay loyal to network providers
                            • Figure 7: Length of time with network, October 2018
                          • Just 14% plan on switching in the next year
                            • Figure 8: Intent to switch, October 2018
                          • Vast majority of consumers happy with customer service
                            • Figure 9: Customer satisfaction in customer service, October 2018
                          • What we think
                          • Issues and Insights

                            • 5G introduction could accelerate the shift to SIM-only contracts
                              • The facts
                                • The implications
                                  • Data, not calls or texts, is the key battleground
                                    • The facts
                                      • The implications
                                      • The Market – What you need to know

                                        • Rise in SIM-only contributes to overall market drop
                                          • 5G could help to boost market
                                            • Ofcom finds cellular calls and SMS on decline
                                              • Reliance on mobile data increasing
                                              • Market Size and Forecast

                                                • Rise in SIM-only contributes to overall market drop in market value
                                                  • Figure 10: Market size and forecast for mobile network providers, 2013-23
                                                  • Figure 11: Volume of mobile network connections, 2013-23
                                                  • Figure 12: Value and volume of mobile network connections, 2013-23
                                                  • Figure 13: Phone payment types, October 2018
                                                  • Figure 14: iPhone XS pricing
                                                • 5G could accelerate SIM-only shift
                                                • Market Drivers

                                                  • Consumers continue to call and text less, Ofcom finds
                                                    • Figure 15: Average monthly outbound mobile call minutes per subscription, 2012-17
                                                    • Figure 16: Average monthly outbound mobile messages per subscription (SMS&MMS), 2012-17
                                                  • Bundled services continue to rise
                                                    • Figure 17: Mobile retail revenue, by service (£ billion), 2012-17
                                                  • 5G could drive significantly higher mobile data use…
                                                    • Figure 18: Average monthly mobile data per active connection (GB), 2012-17
                                                  • …as well as drive up smartphone prices
                                                  • Companies and Brands – What You Need to Know

                                                    • EE continues to lead market thanks to popularity with older generations
                                                      • 5G innovation
                                                        • EE adds Samsung Galaxy Watch 4G and Upgrade Anytime Plan contract plan
                                                          • Major networks announce range of rewards and partnerships to keep customers
                                                            • Netflix and Amazon Prime work with providers to offer streaming discounts
                                                              • Giffgaff continues to be most recommended network
                                                                • Consumer trust major networks but question marks over Vodafone
                                                                • Market Share

                                                                  • EE continues to lead market thanks to popularity with older generations
                                                                    • Figure 19: Market share by network, October 2018
                                                                • Launch Activity and Innovation

                                                                  • 5G innovation
                                                                    • EE to lead the way with 2019 launch in 16 cities
                                                                      • Figure 20: EE’s 5g coverage in 2019
                                                                    • Other operators gearing up for launch
                                                                      • Figure 21: Vodafone’s holographic 5G call
                                                                    • Streaming services set to benefit
                                                                      • EE adds Samsung Galaxy Watch 4G and Upgrade Anytime contract plan
                                                                        • Figure 22: Samsung Galaxy Watch 4G
                                                                      • Major networks announce range of rewards and partnerships to keep customers
                                                                        • Figure 23: O2 Michael bublé AR experience
                                                                      • Netflix and Amazon Prime work with providers to offer streaming discounts
                                                                      • Advertising and Marketing Activity

                                                                        • Advertising spend continues to drop
                                                                            • Figure 24: Recorded above-the-line, online display and direct mail total advertising expenditure on mobile network services, by advertiser, 2015-18
                                                                          • Nielsen Ad Intel coverage
                                                                          • Brand Research

                                                                              • Brand Map
                                                                                • Figure 25: Attitudes towards and usage of selected brands, November 2018
                                                                                • Figure 26: Key metrics for selected brands, November 2018
                                                                              • Brand attitudes
                                                                                • Figure 27: Attitudes, by brand, November 2018
                                                                              • Brand personality
                                                                                • Figure 28: Brand personality – Macro image, November 2018
                                                                                • Figure 29: Brand personality – Macro image, November 2018
                                                                              • Brand analysis
                                                                                • Giffgaff is joint most recommended provider…
                                                                                  • Figure 30: User profile for Giffgaff, November 2018
                                                                                • …along with Tesco Mobile
                                                                                  • Figure 31: User profile of Tesco Mobile, November 2018
                                                                                • Very positive opinions of O2
                                                                                  • Figure 32: User profile of O2, November 2018
                                                                                • EE also well valued by consumers
                                                                                  • Figure 33: User profile of EE, November 2018
                                                                                • Mixed bag for Three
                                                                                  • Figure 34: User profile of Three, November 2018
                                                                                • Consumers associate Sky Mobile with cost
                                                                                  • Figure 35: User profile of Sky Mobile, November 2018
                                                                                • Consumers critical of Vodafone
                                                                                  • Figure 36: User profile of Vodafone, November 2018
                                                                              • The Consumer – What You Need to Know

                                                                                • EE continues to lead market
                                                                                  • SIM-only contracts on the rise
                                                                                    • Regular contracts significantly more expensive than SIM-only
                                                                                      • Most consumers have less than 5GB data allowance
                                                                                        • Less than 15% plan to switch next year
                                                                                          • Even split on network provider’s app usage
                                                                                          • Breakdown of Big Four mobile networks

                                                                                            • O2 leads market for Millennials
                                                                                              • Figure 37: Big Four networks by generation, October 2018
                                                                                          • Contracts vs PAYG

                                                                                            • Four in 10 people on a contract with a phone
                                                                                              • Figure 38: Types of phone payment, October 2018
                                                                                              • Figure 39: Types of phone payment, by gender and generation, October 2018
                                                                                            • Most consumers don’t upgrade their contracts for new phones
                                                                                              • Figure 40: upgrading contract for new phone, October 2018
                                                                                          • Contracts and PAYG Spending

                                                                                            • SIM-only customers most commonly paying £6-10 per month
                                                                                              • Figure 41: Contract spending, October 2018
                                                                                              • Figure 42: SIM-only vs contract spending, October 2018
                                                                                            • Three quarters of PAYG customers on £10 or less
                                                                                              • Figure 43: PAYG spending, October 2018
                                                                                          • Contract Length

                                                                                            • Two-year contracts remain the most common
                                                                                              • Figure 44: Contract Length, October 2018
                                                                                              • Figure 45: Contract length, by gender and generation, October 2018
                                                                                          • Data Allowance and Usage

                                                                                            • Most consumers have less than 5GB allowance
                                                                                              • Figure 46: Monthly data allowance on personal mobile phone, October 2018
                                                                                              • Figure 47: Monthly data allowance on personal mobile phone, by generation, October 2018
                                                                                            • Majority of consumers use less data than their allowance
                                                                                              • Figure 48: Under, same or over data allowance, October 2018
                                                                                              • Figure 49: Under or same data allowance by generation, October 2018
                                                                                            • Less than half of consumers say data is their main priority
                                                                                              • Figure 50: Importance of data allowance in contract, October 2018
                                                                                              • Figure 51: Importance of data allowance in contract, by generation, October 2018
                                                                                            • Three customers value data more than those of other providers
                                                                                              • Figure 52: Importance of data allowance in contract, by brand, October 2018
                                                                                            • Most consumers not motivated to get more data for mobile services
                                                                                              • Figure 53: Contracts with specific mobile services, October 2018
                                                                                          • Brand Loyalty

                                                                                            • Most consumers stay with a provider for the long term
                                                                                              • Figure 54: Length of time with network provider, October 2018
                                                                                              • Figure 55: Time with network provider, by brand, October 2018
                                                                                            • Vast majority satisfied with their network’s customer service
                                                                                              • Figure 56: Customer service satisfaction, October 2018
                                                                                              • Figure 57: customer service satisfaction by brand, October 2018
                                                                                          • Switching Networks

                                                                                            • Less than 15% plan to switch in next year
                                                                                              • Figure 58: Intent to switch network, October 2018
                                                                                              • Figure 59: Intent to switch network, by generation, October 2018
                                                                                            • O2 customers least likely to leave out of Big Four
                                                                                              • Figure 60: Intent to switch network by brand, October 2018
                                                                                            • Most customers find it time consuming to switch
                                                                                              • Figure 61: Agreement with the statement “I find it time consuming changing mobile network”, October 2018
                                                                                            • Switching customers motivated by cheaper prices
                                                                                              • Figure 62: Reasons for switching, October 2018
                                                                                            • Switching customers most likely to go to contract
                                                                                              • Figure 63: New payments for switching customers, October 2018
                                                                                          • Use of Network Providers’ Apps

                                                                                            • Even split on network provider app usage
                                                                                              • Figure 64: Use of network providers’ apps, October 2018
                                                                                              • Figure 65: Use of network providers’ apps, October 2018
                                                                                          • CHAID Analysis – Use of Network Providers’ Apps

                                                                                            • Methodology
                                                                                              • Young full-time workers most likely to use provider’s app
                                                                                                  • Figure 66: Target group based on mobile network provider’s app usage – CHAID – Tree output, October 2018
                                                                                              • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                  • Abbreviations
                                                                                                    • Consumer research methodology
                                                                                                    • Appendix – The Market

                                                                                                        • Figure 67: Value of mobile network connections, 2013-23
                                                                                                        • Figure 68: Volume of mobile network connections, 2013-23

                                                                                                    Mobile Network Providers - UK - February 2019

                                                                                                    US $2,552.20 (Excl.Tax)