Smartphones will account for two-thirds of UK market by 2015

Smartphones will account for two-thirds of UK market by 2015

Smartphones will make up two-thirds of the UK mobile market by 2015, says market researcher Business Monitor International (BMI).

The total subscribers will reach 84 million, with 53.5 million on 3G contracts, it said in its UK telecommunications market report for Q3 2011.

BMI said the market would to continue to grow but decelerate as the market penetration increased. It forecast continuing strong growth in 3G subscriptions, which would steadily become the norm, it said.

BMI said the basis for competition and new revenue were becoming more important than subscription growth for mobile operators. ‘The contraction in the fixed-line market will also continue at a slower rate as operators increase bundled services,’ it said.

BMI expected average revenues per user (ARPU) to level off despite a growth in data traffic.
In Q2 2011 all network operators except Three had reported lower ARPUs for the second quarter in a row, it said. This was due to operators fighting over postpaid subscriptions and trying to switch prepaid subscribers to postpaid, the report states.

BMI expected data traffic to rise due to the surge in demand for smartphones. Everything Everywhere had reported 64% of contract phones sold in Q3 2010 were smartphones, compared to 42% in Q4 2009. ‘This will increase,’ BMI said, confirming Ofcom reports of similar figures for the whole market for the same two quarters.

Fixed lines were increasingly important to mobile operators because of the increase in data traffic, the use of Wi-Fi to increase mobile network capacity, and market demand for bundled services, it said.

BT continued to lead the broadband market. It reported a retail broadband base of 5.7 million and wholesale broadband customer base of 8.1 million.

O2 and Orange had both reported strong uptakes of their broadband services, as had satellite broadcaster BSkyB.

TalkTalk migrated Tiscali subscribers onto its own network, but was hit withh a £3m fine by Ofcom for poor customer service.

Cable operator Virgin Media reported positive Q1 2011 results following a strong 2010. The launch of 100Mbps broadband and a new set-top box to rival Sky+ will likely give the MVNO another positive year in 2012, BMI said.

Other developments in the quarter included:
• the introduction of spectrum trading for mobile frequencies
• the operators’ response to the rules for the forthcoming 4G auction
• Microsoft’s trial of Super Wi-Fi

BMI said the switch to 4G mobile technology, and LTE in particular, could extend broadband availability to many more subscribers, in particular those in rural areas who now suffer from poor coverage and connection speeds.

Written by Mobile Today
Mobile Today


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