Category Archives: Analysis

The FMC hoax

Without subscription growth it’s difficult for mature market operators to report service revenue growth.

Some operators – anxious to still show growth – have thus begun to regularly highlight their fixed-mobile convergence base in quarterly results presentations. It’s most often a smoke screen. Here are seven examples – of which six aren’t growth stories.

From Telefónica’s Q3 2019 presentation (on Spain)
From Telenet’s (Liberty Global Belgium) Q3 2019 presentation
From Swisscom’s Q3 2019 presentation
From Orange’s Q3 2019 presentation – note the truncation where there’s growth (France, Poland) and lack of truncation where there’s a decline (Spain)
From KPN’s Q3 2019 presentation
From Proximus’ Q3 2019 presentation
From Orange Belgium’s Q3 2019 presentation

These examples are designed to look like growth, but it’s most often not. It’s simply migration from one plan to another.

Take a look at our graph below. It compares the y-o-y growth in the converged customer base to the y-o-y growth in the fixed broadband base.

Relation between the y-o-y growth in converged customer base (horisontal) and the growth in fixed broadband base (vertical) – Q3 2019 vs. Q3 2018

With few exceptions, the growth in the converged customer base is much faster than the growth in the fixed broadband base. The only operators in our European sample that could be seen to use convergence to grow its fixed broadband base, taking market share, are Orange in Belgium, Vodafone in the UK and Sunrise in Switzerland. (The position of Vodafone in Germany is heavily affected by the acquisition of Liberty Global’s Unitymedia in Q3 2019.)

The operators in the box highlighted in red are essentially just migrating existing fixed broadband customers to converged plans. There is no growth in the fixed broadband base and these operators are thus not taking any market share – even if the snippets from the investor presentations above speak about the growth in convergence base.

If we instead plot the y-o-y growth in mobile postpaid base vs. the y-o-y growth in converged base, it looks a bit better.

Relation between the y-o-y growth in converged customer base (horisontal) and the growth in mobile postpaid base excl. M2M (vertical) – Q3 2019 vs. Q3 2018

One reason to this is that there’s an underlying prepaid to postpaid migration trend in all markets; it elevates the dots a bit from the zero line. That trend has little to do with convergence.

In reality there are few operators that can turn their growth in converged customer base into any significant growth in mobile postpaid base. Virgin Media, Sunrise and Fastweb are the exceptions. Note that Virgin Media and Fastweb both are MVNOs – and that Sunrise is again identified as a positive exception.

In an industry looking for a growth formula, fixed-mobile convergence has, as shown, become a general way to try to demonstrate growth. This seems particularly true for incumbents such as Telefónica, Orange, KPN, Proximus and Swisscom. But a reported growth in FMC base is seldom relevant.

The proof for a successful FMC proposition is instead found in how the total revenue, EBITDA and churn develop.

Please don’t regard FMC as a universal solution for customer churn either. The graph below shows how Movistar Spain’s churn developed between 2014 and today.

Comparison between the reported Fusión (FMC) churn of Movistar in Spain to the overall fixed broadband churn vs. overall mobile postpaid churn. Telefónica is today only occasionally reporting fixed broadband and mobile postpaid churn.

When the FMC plan Fusión was new, customers on Fusión had a significantly lower churn than what the overall fixed broadband and mobile postpaid churn were.

Little by little as Fusión penetration grew, the difference shrunk. Today there’s no churn benefit of FMC vs. the overall churn levels for fixed broadband and mobile postpaid. When 89% of Movistar’s fixed broadband consumer customers are Fusión customers and 85% of Movistar’s mobile postpaid consumer customers are Fusión customers, there’s simply no reason why there should be a churn differential any longer. And there isn’t. FMC customers churn as often as any customer. But the FMC churn grew a lot from its lowest point in Q1 2015. From a churn point of view, Telefónica is back to where it started.

So when an operator reports lower churn for FMC customers while still expanding the FMC base: Don’t be fooled. It will not last for long when operators strive to push the FMC penetration level upwards. The reason is simple: Customers are loyal if they are satisfied. Only satisfied customers would consider buying more from the same operator. In the beginning, the FMC base will consequently consist of the most satisfied and loyal customers. No wonder churn goes down – it’s a club for happy, loyal and likely price indifferent customers; often on binding contracts.

The rest of the population don’t have those characteristics. The only way to get really high FMC penetration is then to say no to a significant part of the market. That’s also why FMC-embracing incumbents, as shown, have such a difficulty to grow total base. One size does not fit all.

But for challengers FMC seems to work as long as penetration levels are moderate.


If you are a customer to Tefficient, ask us for the scatter chart also for revenue.

Mobile data consumption continues to grow – a majority of operators now rewarded with ARPU

Taiwan: Unlimited is so last year – Korea: 5G boosts usage

Tefficient’s 24th public analysis on the development and drivers of mobile data ranks 115 operators based on average data usage per SIM, total data traffic and revenue per gigabyte in 1H 2019.

The data usage per SIM grew for all; everybody climbed our Christmas tree. More than half of the operators could turn that data usage growth into ARPU growth for the first time a majority is in green. Read our analysis to see who delivered on “more for more” and who didn’t.

Speaking of which, we take a closer look at the development of one of the unlimited powerhouses Taiwan. Are people getting tired of mobile data?

We also provide insight into South Korea the world’s leading 5G market. Just how much effect did 5G have on the data usage?

Continue reading Mobile data consumption continues to grow – a majority of operators now rewarded with ARPU

How South Korea’s operators drive demand for 5G

Reference: Analysis and Go-to-market, 2019

Nowhere else in the world will you find as many 5G users as in South Korea. Nowhere else will you find as many 5G base stations up and running. If there ever was a race to 5G, the Korean government and industry won it.

Seeing is believing: After having dug up, read and compiled all reporting and data on Korea’s mobile business there was no other way forward than to seeing it for ourselves and interview people involved in creating Korea’s ‘5G wonder’.

We spent eight busy days (11-18 July) in Seoul to finish a comprehensive 106-page analysis – full of graphs and photos – with recommendations for European operators.

Continue reading How South Korea’s operators drive demand for 5G

Prepping for 5G: Monetisation model and FWA define usage

This is tefficient’s 23rd public analysis of the development and drivers of mobile data.

Mobile data usage is still growing in all of the 39 countries covered by this analysis. Two countries stand out – China and India.

But China and India aren’t yet challenging the usage top – where the two unlimited superpowers, Finland and Taiwan, still reign.

Data-only remains a key driver for overall usage and new figures from Czech Republic, Latvia, Finland and Austria add insight to the extreme usage pattern of fixed wireless access.

Continue reading Prepping for 5G: Monetisation model and FWA define usage

Who has the best 4G network in the Nordics?

This is our fourth comparison of the mobile network experiences in the Nordics based on performance data from Opensignal. There are more details and background is the previous (onetwothree) blogs.

This time the data is gathered from March to May 2019. The data has not been published by OpenSignal but has been shared with us through Opensignal’s analyst program.

4G availability

The graph below ranks the fourteen operators in Norway, Sweden, Denmark and Finland after how large proportion of time 4G capable devices have been connected to 4G. Opensignal calls this 4G availability.

Continue reading Who has the best 4G network in the Nordics?

Interviewing 23 executives and experts for Ericsson ConsumerLab research on 5G consumer potential

Reference: Go-to-market, 2018-2019

Conducting and transcribing 22 interviews with 23 senior executives from telecom operators, handset and chip manufacturers, start-ups, academia and think tanks on the potential of 5G for consumers.

These interviews were, alongside focus groups, used as input to design Ericsson ConsumerLab’s consumer research ultimately covering 22 countries and over 35000 smartphone owners globally.

The interviews form an integral part of the 5G consumer potential report as issued by Ericsson ConsumerLab in May 2019. All interviewees are named in the report. Thank you for your kindness!

Continue reading Interviewing 23 executives and experts for Ericsson ConsumerLab research on 5G consumer potential

Are fast networks fast because they aren’t used?

This blog is a follow-up on Tefficient’s recently published mobile data usage and revenue analysis of operators

    When you use a mobile network, your traffic has to co-exist with traffic generated by other users currently connected to the same cell. Your speed experience will depend on how much and what type of traffic those other users generate. It will also depend on how your operator has dimensioned that cell, i.e. how many carriers they have put up. Ultimately that depends on the available spectrum your operator has access to.

    When operators want to convince us how great their networks are, they typically talk about download speed, i.e. how many Mbit/s users on their network averagely get when downloading something from the internet. It is being supported by a number of independent network performance specialists – Tutela, Opensignal, Ookla, P3, RootMetrics – issuing country reports naming winning networks.

    These reports are actually often multi-faceted with several performance metrics, but that is often too complex to use in marketing, operators think. The simplified marketing message becomes: Speed is good – and we won.

    Here are a few recent examples:

    Continue reading Are fast networks fast because they aren’t used?

All operators climbed the tree – 46% turned usage growth into ARPU growth

  • Which operator has the world’s highest data usage?
  • Which operator carries the most data traffic in the world?
  • Which operator earns the most or the least per GB?

This is tefficient’s 22nd public analysis on the development and drivers of mobile data. We have ranked 90 reporting or reported operators based on average data usage per SIM, total data traffic and revenue per gigabyte in 2018.

Continue reading All operators climbed the tree – 46% turned usage growth into ARPU growth

China and India shift to 4th gear – leave many mature markets in the dust


Final! Mobile data usage and revenue for 39 countries

This is tefficient’s 21st public analysis of the development and drivers of mobile data.

Mobile data usage is still growing in all of the 39 countries covered by this analysis. But there are two countries that stand out – China and India. In the first half of 2018, these two ‘developing’ nations have overtaken several mature markets when it comes to average data consumption per subscription. The growth is incredibly fast and driven by 4G.

But China and India aren’t yet challenging the top – where the two unlimited superpowers, Finland and Taiwan, still reign. Continue reading China and India shift to 4th gear – leave many mature markets in the dust

How to continue to improve mobile service revenue and customer loyalty

Reference: Analysis and Go-to-market, 2018

Quantitative and qualitative exploration and analysis project starting with a Nonstop Retention® benchmark for a specific country market.

Analysing a wide area of propositions and tactics from several different markets:

  • Multi-user and multi-device plans
  • Fixed-mobile convergent plans
  • Premium value plans and options
  • Flexible plans and sub-brands
  • Early upgrade plans for handsets
  • Loyalty programmes

Identifying best practice with regards to impact on revenue, take-up and customer loyalty. Applying it to the local market competitive context, resulting in a recommendation presented during interactive workshops.

Continue reading How to continue to improve mobile service revenue and customer loyalty