2021
9
UK Mobile Network Providers Market Report 2021
2021-03-02T03:00:51+00:00
OX1042383
2195
135039
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Report
en_GB
“COVID-19 has caused numerous changes to the mobile network providers market, likely accelerating the movement to SIM-only plans but also causing a temporary slowdown in growth in mobile data usage.

UK Mobile Network Providers Market Report 2021

£ 2,195 (Excl.Tax)

Description

Providing the most comprehensive and up-to-date information and analysis of the UK Mobile Network Providers market, including the behaviours, preferences and habits of the consumer.

While there has been a continued trend towards people choosing SIM-only payment plans, the financial insecurity from the COVID-19 pandemic has increased this momentum rapidly. 38% of users have a SIM-only plan, with contracts lagging behind at 32%, a huge change around from 2019 which saw 39% on contract and only 29% on SIM-only.

The market itself declined across the pandemic, falling by 5.9% to £13 billion. While Ofcom also recorded a 4.4% drop in average revenue, the initial lockdowns saw calls increase between 10% and 45% depending on the provider. Because of the sudden change to working from home, mobile data usage fell between 4% and 20% across providers.

The increased economic uncertainty coming out of the pandemic could potentially see a large section of mobile users seeking out more affordable phone options. Users on the £6 – £10 tarriff increased from 23% to 25% over 2020, and 29% of users said they’d consider finding a cheaper provider.

While the biggest threat to the market is in the increased switching flexibility for customers, with Ofcom banning networks selling locked smartphones from December 2021. However, the oncoming rollout of 5G across the country provides new market opportunities, with 1 in 5 contract users intending to upgrade.

Quickly understand

  • The short, medium and long-term impact of COVID-19 on how consumers buy and use their mobile contracts, including changes to what they’re looking for in call, text and data allowances.
  • Which mobile network provider consumers are subscribed to, whether it is a contract, SIM-only or PAYG plan and how pricing compares between providers.
  • Consumers’ intention to buy a 5G phone and contract in the next year and the importance of 5G coverage in deciding between providers.

Covered in this report

Providers: EE (T-Mobile, Orange), 02, Vodafone, Three, Tesco Mobile, Virgin Media, GiffGaff, BT, SkyMobile, TalkTalk, Voxi,

Plans: SIM-Only, contract with phone, pay-as-you-go.

Expert analysis from a specialist in the field

Written by Zach Emmanuel, a leading analyst in the Technology sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

COVID-19 has caused numerous changes to the mobile network providers market, likely accelerating the movement to sim-only plans but also causing a temporary slowdown in growth in mobile data usage. It is possible that some consumers will not upgrade their mobile data allowances long term if they work from home permanently post-COVID-19, but this in turn opens up opportunities for network providers to target these consumers with their 5G broadband offerings.

Zach Emmanuel
Consumer Technology Analyst

Table of Contents

  1. Overview

    • What you need to know
    • Key issues covered in this Report
    • COVID-19: market context
    • Impact of the January lockdown and vaccination rollout
    • Economic and other assumptions
    • Products covered in this Report
  2. Executive Summary

    • Impact of COVID-19 on mobile network providers
      • Figure 1: Short, medium and long-term impact of COVID-19 on mobile network providers, 12 January 2021
    • The market
    • Lower monthly fees contribute to drop in market size for network providers
      • Figure 2: Market size and forecast for mobile network providers (value), 2015-25
    • Increase in calls but drop in data during initial COVID-19 lockdown
    • EE retains leadership but Three could gain share
      • Figure 3: Market share, by network provider, November 2020
    • Pre-COVID-19: monthly data usage continues its clear growth
    • Companies and brands
    • Big Four networks begin trials of 4G on London underground
    • Networks support vulnerable people during COVID-19
    • The consumer
    • SIM-only deals are now the most popular type of payment
      • Figure 4: Type of payment plan for mobile phone, November 2020
    • SIM-only subscribers pay less
      • Figure 5: Monthly payments for SIM-only and contracts with phone, November 2020
    • One in five contract owners intend to upgrade to 5G next year
      • Figure 6: Current ownership and intentions to upgrade to 5G in next year, November 2020
    • Faster video streaming is the biggest motivator for 5G
      • Figure 7: Biggest motivators to upgrade to 5G, November 2020
    • London 5G coverage will help EE to maintain market leadership
      • Figure 8: 5G coverage as a motivator to switch network provider, November 2020
    • Some consumers have decreased their mobile data allowances since COVID-19
      • Figure 9: Timescale on latest contract modification, November 2020
      • Figure 10: Changes to calls, text or data in latest modification, November 2020
      • Figure 11: Increases or decreases of specific allowances in latest modification, November 2020
    • COVID-19 accelerates shift to SIM-only
      • Figure 12: Impact of COVID-19 financial uncertainty on mobile contracts, November 2020
  3. Issues and Insights

    • How COVID-19 is shaping the mobile network providers market
    • Shift to SIM-only and cheaper contracts
    • Changes to habits in mobile calling and data usage
    • Potential changes to market share
    • Network providers face biggest test yet in engaging and keeping customers
  4. The Market – Key Takeaways

    • Mobile network providers market drops by 5.9%
    • O2’s call volumes up 25% during first lockdown
    • Virgin Media Gigabit broadband and O2 5G in £31 billion merger
  5. Market Size and Forecast

    • Impact of COVID-19 on mobile network providers
      • Figure 13: Short, medium and long-term impact of COVID-19 on mobile network providers, 12 January 2021
    • Lower monthly fees contribute to drop in market size for network providers
      • Figure 14: Value and volume for the mobile network providers market, 2015-25
      • Figure 15: Market size and forecast for mobile network providers (value), 2015-25
      • Figure 16: Market size and forecast for mobile network providers (volume), 2015-25
  6. Market Drivers

    • Increase in calls but drop in data during initial COVID-19 lockdown
    • Liberty Global and Telefonica agree £31 billion merger
    • Pre-COVID-19: monthly data usage continues its clear growth
      • Figure 17: Monthly data usage (GB), 2014-19
    • Pre-COVID-19: text messages were continuing to drop but calling was stable
      • Figure 18: Average number of SMS/MMS messages sent per month, 2014-19
      • Figure 19: Average minutes on outbound calls per month, 2014-19
  7. Companies and Brands – Key Takeaways

    • Three has potential to grow market share due to 5G coverage
    • Mobile working boosted by availability of 4G on London underground
    • Mobile networks start programmes in response to COVID-19
  8. Market Share

    • EE leads market but Three could gain share
      • Figure 20: Market share, by network provider, November 2020
  9. Launch Activity and Innovation

    • Big Four networks begin trials of 4G on London underground
    • Role of 4G in mobile working
    • Networks support vulnerable people during COVID-19
    • O2 and Hubbub smartphone donations
    • Department for Education’s Help with Technology programme
    • Vodafone schools.connected initiative
    • Vodafone’s discounted mobile plan for jobseekers
    • EE launches Full Works plan with range of Apple streaming services…
    • …and adds BT Sport’s Match Day Experience for sports fans
    • Keeping sports fans connected during lockdowns
    • EE also adds voice calling support for Amazon Echo owners
  10. Advertising and Marketing Activity

    • Network providers spent £226.6 million on advertising in 2020
      • Figure 21: Above-the-line, online display and direct mail total advertising expenditure on mobile network services, 2017-20
    • Changes to spending across the Big Four providers
      • Figure 22: O2’s above-the-line, online display and direct mail total advertising expenditure on mobile network services, by brand and product category, 2020
      • Figure 23: Vodafone’s above-the-line, online display and direct mail total advertising expenditure on mobile network services, by brand and product category, 2020
      • Figure 24: EE’s above-the-line, online display and direct mail total advertising expenditure on mobile network services, by brand and product category, 2020
      • Figure 25: Three’s above-the-line, online display and direct mail total advertising expenditure on mobile network services, by brand and product category, 2020
    • Nielsen Ad Intel coverage
  11. Brand Research

    • Brand map
      • Figure 26: Attitudes towards and usage of selected brands, November 2020
    • Key brand metrics
      • Figure 27: Key metrics for selected brands, November 2020
    • Consumers see EE and O2 as most trustworthy and high-quality brands
      • Figure 28: Attitudes, by brand, November 2020
    • Tesco Mobile viewed as most accessible network provider
      • Figure 29: Brand personality – Macro image, November 2020
    • giffgaff has best reputation for flexibility
      • Figure 30: Brand personality – Micro image, November 2020
    • Brand analysis
    • Consumer satisfaction with giffgaff is the highest out of the major networks
      • Figure 31: User profile of giffgaff, November 2020
    • Tesco Mobile scores well on perceptions of efficiency
      • Figure 32: User profile of Tesco Mobile, November 2020
    • O2 has joint highest usage in the past and in the last year
      • Figure 33: User profile of O2, November 2020
    • EE’s users are most likely to describe it as their favourite brand
      • Figure 34: User profile of EE, November 2020
    • Three UK is in the mid-range for usage, satisfaction and recommendations
      • Figure 35: User profile of Three UK, November 2020
    • Vodafone is viewed as expensive but one of the most efficient brands
      • Figure 36: User profile of Vodafone, November 2020
    • Consumers see Virgin Mobile as one of the more innovative brands
      • Figure 37: User profile of Virgin Mobile, November 2020
  12. The Consumer – Key Takeaways

    • SIM-only overtakes traditional contract as most common payment
    • Network providers may do best to focus on mid-range 5G handsets
    • Network providers can target the group of permanent homeworkers
  13. Impact of COVID-19 on Consumer Behaviour

    • COVID-19 accelerates shift to SIM-only
      • Figure 38: Impact of COVID-19 financial uncertainty on mobile contracts, November 2020
    • Some consumers have decreased their mobile data allowances since COVID-19
    • Targeting permanent homeworkers with 5G as a replacement for broadband
      • Figure 39: Timescale for latest contract modification, November 2020
      • Figure 40: Changes to calls, text or data in latest modification, November 2020
      • Figure 41: Increases or decreases to specific allowances in latest modification, November 2020
  14. Type of Mobile Payment Plan and Prices

    • SIM-only deals are now the most widely used type of payment
    • Ofcom also pushes flexibility with ban on locked smartphones
      • Figure 42: Type of payment plan for mobile phone, November 2020
    • SIM-only subscribers pay less
      • Figure 43: Monthly payments for SIM-only and contracts with phone, November 2020
  15. Intentions and Motivations for 5G

    • One in five contract owners intend to upgrade to 5G next year
    • Network providers may do best to focus on entry-level and mid-range 5G handsets in the short term
      • Figure 44: Current ownership and intentions to upgrade to 5G in next year, November 2020
    • Faster video streaming is the biggest motivator for 5G
      • Figure 45: Biggest motivators to upgrade to 5G, November 2020
      • Figure 46: Above 10GB on mobile data allowance in contract, November 2020
    • London 5G coverage will help EE maintain market leadership
      • Figure 47: 5G coverage as a motivator to switch network provider, November 2020
    • COVID-19 store closures may have held back consumers’ intent to get 5G
      • Figure 48: Satisfaction with current network speed, November 2020
  16. Appendix Data – Sources, Abbreviations and Supporting Information

    • Abbreviations
    • Consumer research methodology

About the report

This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

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Mintel’s proprietary consumer research provides our analysts with the attitudinal and behavioral data used to provide valuable insight to topical issues.

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