Europe's Top 10 Operators - Still producing robust growth
Published on: 19th Dec 2007
Note -- this news article is more than a year old.
Although the 100% penetration level was reached in Q1 of this year, mobile growth has not slowed to any great extent and in fact, the third quarter saw more new connections than either of the earlier quarters, with 20.14m new connections, against 14.5m in the second and 16.3m in the first. Curiously, the 20m figure is almost exactly the same number as in both Q3 06 and Q3 05, when net additions totalled 20.4m and 20.2m respectively.
If the normal seasonal pattern is repeated in Q4, then the final period of the year should see something between 25-30m new connections, enough to take penetration up to 110%. This reflects the fact that it is now quite commonplace to have more than one mobile account - one for work and another for domestic use. Add to this a small but growing number of machine to machine SIMs and a steadily increasing number of datacards or 3G USB devices, remove inactives where appropriate and clearly, there is no immediate prospect of a cessation of growth.
At the end of the second quarter, Europe's ten largest MNOs had a combined total of just over 270m customers, or nearly 40% of the total market. After a couple of minor restatements, that now emerges as 269m, or 39.6%. This number has crept up to just under 275m at the end of September, while the proportion has continued to drop, to 39.2%. This reflects a steady, if un-dramatic, broadening of the customer base across a growing number of operators. In fact, only one the ten largest MNOs increased its share of the European total (Kyivstar in Ukraine, by 0.6%) but even here, the rise reflects a bounce back from the poor second quarter performance, when the company lost 0.8%. Only two others - Vodafone's subsidiaries in Italy and Turkcell - maintained their overall market share (at 4.16% and 4.97% respectively) while all the others experienced a drop.
Worst affected was T-Mobile Germany, which gave up 125bp of share, from 5.05% to 4.92%.
In fact, T-Mobile's German business actually added to its overall base and remains the clear market leader in Germany, but not in Europe. Once again, TIM Italy has recaptured the lead in the market and it is now the only operator in the region with more than 5% of the European market. T-Mobile has in fact fallen to third, as Turkcell equalled TIM's 1m new connections to take second place with a total to 34.8m.
There is only one other change in the top ten, Kyivstar moving up from eighth to swap places with Telefonica Spain.
Broadening the focus, to the top 20, we see the same basic trends. The largest 20 operators account for 61.5% of the European total, compared to 62.0% at the end of both March and June, which translates to an absolute value of 430.6m. Perhaps surprisingly, there is only one change in the bottom half, with Vodafone Turkey and WIND Italy swapping places. At the end of June, Vodafone Turkey was in 17th place while WIND was in 14th - after the former added nearly 800k new connections and the latter, just 100k. The chart below shows the top 20 over the last three quarters.
Turning next to the quarterly growth rates, all ten companies on the list of the fastest growing operators added more than 0.5m new connections in the quarter, with four adding one million or more.
The company with the greatest number of new connections was one of the smaller European operators, Astelit in Ukraine, which added 1.3m new customers to its base, to take its total to 7.6m. However, this number shrinks somewhat if active numbers are used and on this more conservative basis, the increase was just 0.7m - still enough for a top ten place but not first. Kyivstar of the Ukraine came second, with 1.06m adds, which was nearly, but not quite enough to maintain is share of this volatile market. TIM and Turkcell both connected one million new customers to share third place. Below these four come three Vodafone subsidiaries, from Germany, Italy and Turkey, which added 920k, 840k and 780k respectively to take their totals to 32.5m, 29.1m and 15.7m. In eighth place, Orange Romania didn't quite manage the three quarter million mark, with 0.74m adds, while both E-Plus and O2 Germany, in ninth and tenth place, added 0.65m and 0.61m respectively.
On reflection, these are impressive numbers for businesses that are operating in a 100%+ market.