Category Archives: UK

What buys you a load of data in Finland, France & Denmark, buys you nothing in Belgium & Switzerland

How much mobile services do you get for 20 EUR?

For 25? 30? 35? 40 EUR?

We have compared the service prices of all mobile operator brands in eleven countries: Germany, the UK, France, the Netherlands, Belgium, Sweden, Austria, Switzerland, Denmark, Finland and Norway.

And Europe is divided. Continue reading What buys you a load of data in Finland, France & Denmark, buys you nothing in Belgium & Switzerland

Increase loyalty. Increase revenue. Reduce SAC/SRC. Is the combo possible?

Decoupled, non-binding, unsubsidised: A game changer?

Our analysis shows that mature market mobile operators on average use 15-20% of service revenue on subscriber acquisition and subscriber retention cost (SAC/SRC). In most cases without growing.Decoupled Non-binding Unsubsidised

Consequently, we examine the success of the operators who – in order to reduce SAC/SRC and improve margin – are challenging the mature market norm with binding contracts with coupled, subsidised, equipment. Continue reading Increase loyalty. Increase revenue. Reduce SAC/SRC. Is the combo possible?

BT Mobile: Surprisingly disruptive

After 14 years, BT is back into consumer mobile. The long-rumoured launch of BT Mobile happened today. Continue reading BT Mobile: Surprisingly disruptive

Why 100% population coverage on 4G doesn’t imply a great customer experience

Once you pop, you can’t stop?

When the rollout of 4G LTE eventually got up to speed in Western, Central and Southern Europe, it wasn’t long until operators started to report that the rollout was more or less completed, using population coverage as the proof point.

Let’s look at the stats from 19 operators who reported 4G population coverage both for December 2013 and 2014: Continue reading Why 100% population coverage on 4G doesn’t imply a great customer experience

O2 is better for BT than EE – it might even be a love marriage

BT plus O2 or EE tefficient


BT confirmed yesterday that they are in talks with two mobile operators about a possible merger in the UK – one being O2. EE is believed to be the other. To assist BT, tefficient presents a matchmaking table.

Business overlap: Since O2 last year sold its fixed business to Sky, a BT-O2 marriage means a minimal business overlap. EE is not bad as a partner either; EE’s fixed business is small. What complicates is that EE recently positioned itself in the upcoming quad-play market through the launch of EE TV. But it helps that EE didn’t enter the same content arena as BT to compete with e.g. BT Sport.

Regulatory hurdles: It took EU a year or more to agree to the mergers of ‘3’ and Orange in Austria, of ‘3’ and O2 in Ireland and of O2 and E-plus in Germany. These mergers were all consolidating mobile operators. Numericable, a French cable operator, received green light from French authorities to acquire SFR, an integrated operator, in just six months (and EU kept out). Since the experience from the merger in Austria is that prices went up, the new EU commission is believed to be more skeptical to mergers which increase market consolidation. A merger between BT and O2 would create a giant, but with the old way of looking at it (fixed and mobile are separate markets), approval might be as easy as in Numericable-SFR. A marriage with EE is somewhat more complicated since it would be a merger of two No 1 operators (in fixed and mobile respectively) plus, of course, the fact that EE today is competing with BT in fixed (and TV).

Owners’ deal willingness: Telefónica, who owns O2, sold O2 branded operations in Ireland and Czech Republic in 2013. Telefónica was behind O2’s entry into UK fixed market in 2006-2007, but demonstrated deal willingness when it was sold to Sky last year. Telefónica has also merged its O2 operation in Germany with E-plus. With all these deals in mind and with a need to control debt after the acquisition in Germany and the upcoming GVT acquisition in Brazil, Telefónica is so ready to sell. EE, on the other hand, has been surrounded by rumours on deals and IPOs, but EE’s owners have recently put an end to it saying that time is not now. The 50/50 ownership split between Orange and Deutsche Telekom makes decisions on EE slow.

Mobile backbone: O2 has continued to rely on BT as a provider not only for backbone transmission but also for field engineering services. EE has sourced much of its backbone from BT’s competitor Virgin Media.

Mobile radio network sharing: Regardless of choosing O2 or EE, BT will get a third party involved through network sharing within mobile. In O2’s case, that sharing partner is Vodafone (who recently said they would go after BT also in the consumer business in the UK), but O2 and Vodafone never went further than sharing passive infrastructure like masts and transmission. Marrying EE would bring ‘3‘ to the table since EE shares network with ‘3’. In contrast to O2/Vodafone, the EE/’3′ network sharing is based on sharing also active infrastructure like radio equipment. It’s not a showstopper, but calls for more coordination.

MVNO partnership: At last, a category where a marriage with EE would be the easiest: BT has a fresh MVNO agreement with EE which grants BT’s mobile customers access to EE’s network. In spite of being part of BT until 2001, O2 never had such an agreement with BT; it was Vodafone who was BT’s host prior to the change to EE this year.

To conclude, both O2 and EE would be good partners to BT. But a marriage with O2 would be quicker to the altar and contain more love. Hopefully.

Sky: New products fence off telco and OTT – 1.5M pay not to stream

You have to admire the way Sky continues to grow customer base and revenue in the UK and Ireland. Most of us thought that satellite TV belonged in the past century, but Sky has through constant development of their products and offerings, by e.g. integrating broadband, multi-screen and streaming, revitalised and modernised the customer experience.

Sky sub revenue dev 2012 2014

Have in mind that Sky in this period was challenged by BT who in August 2013 launched BT Sport – their own sports channel with exclusive rights to football games which previously were exclusive to Sky. A channel which BT provides for free to their broadband customers.

Sky is of course at the same time challenged by Netflix and other streaming services. On this part, it’s interesting to note how successful Sky Go Extra is. The “Extra” allows customers to download content to portable devices like tablets and bring it with them – to watch offline. This is a premium service (5 GBP extra per month) whereas the streaming-only variant (Sky Go) is without any extra charge.

This is an indication that people now are ready to pay not to stream. Access to Wi-Fi is unpredictable. Mobile data allowances are typically low in the UK and 4G network coverage is not yet universal. Are we getting tired of streaming?

BT Sport: 450 MGBP spent this year. Does it pay off?

Since last year, BT is on a route so far not tried by other telcos. In August 2013, BT Sport was launched: A new TV channel which acquired the exclusive rights to show many of the Premier League football games in the UK. Previously, these rights were with satellite and TV provider Sky.

BT broadband before after BT Sport

If you want to see Premier League football, you need to become a customer of BT Sport. But that isn’t BT’s primary proposition: Instead, they want you to become a BT broadband customer – since then you get BT Sport included for free. BT uses the sports rights as a tool to strengthen their retail market share in fixed broadband and TV. And that’s an innovation.

The graph shows how BT’s broadband net adds have developed: In a mature market, BT adds more broadband customers after the BT Sport launch than before. 6,8 million customers in June 2013 grew to 7,3 million in March 2014.

But is comes with a high price: In its year to March 2014 report, BT says it spent 450 MGBP (or 3,6% of the total OPEX of BT Group) on BT Sport during the year. Programming rights were 203 MGBP of this. All this is OPEX; the BT Sport related CAPEX was spent last year.

In March, BT had 3 million direct BT Sport customers. In total, BT Sport is in 5 million UK homes. The additional 2 million come via the wholesale agreements BT later have done with e.g. Virgin Media and Sky. Even though these agreements bring revenue to BT (BT Sport e.g. costs 12 GBP per month if you are a Sky customer), they work against the idea of using BT Sport as an acquisition and retention tool for BT broadband.

Future will show if BT Sport became a game changer for BT. So far, it’s been a lot of money: Roughly 3000 GBP of OPEX per additional broadband net add since the BT Sport introduction.