UK mobile phone markets slows, expect operator deals for Christmas

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UK mobile phone markets slows, expect operator deals for Christmas

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By Peter White (Monday, 10th November 2008)

When markets slow down, there are deals for consumers, and that's the case with the cellular market in the UK and the rest of Western Europe during the past half year according to figures released this week from ArcChart with its WiDar service (Wireless Radar) which tracks subscribers and average revenue per user (ARPU) across the region.

The four largest operators in the region, Vodafone, Orange, T-Mobile and O2/Telefonica have been either static in the number of customers they have, or in one or two cases down, on a territory by territory basis over the past two quarters.

In the UK, where all four companies have operations, O2 gained 300,000 subscribers, but German owned T-Mobile lost 500,000 and while theses are not large amounts for companies with 19 and 17 million subscribers respectively, given that the other two companies Vodafone and Orange are static it means the market as a whole is down. ARPU at the four companies has dropped to an average of €27 (£22), but this could be due to the weakening exchange rate of sterling against the Euro.

In Spain, Orange and Telefonica's subscriber levels are static, and Vodafone has jumped by 400.000 and ARPU has dropped for all the players in Spain Vodafone at €32, Telefonica at €31 and Orange at just €25. In France Orange has held subscribes static and ARPU constant.

The only exception to this trend is in Germany where subscribers numbers have risen. This is surprising since Germany is already 100% penetrated (everyone has at least 1 mobile phone) while France was only 82% penetrated last year and should have been the market to grow.

In Germany operators there are over 3 million additions most of which are with T-Mobile, 2 million while Vodafone and O2 have each added about one million which means the smaller operators must have lost around 1 million between them. However ARPU is now down at €17 (£13.80) which makes that market down in financial terms.

What all this means to the lucky UK consumer is that they can now be more demanding in asking for an upgrade, a better or smarter phone, if they are on a contract, and better rates and cheaper devices if they are on pre-pay. The UK cellcos have had a great history in responding to financial crises and are sure to put out some tempting Christmas offers.