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Europe's Top Ten Networks - All Now Over 20m Customers

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Note -- this news article is more than a year old.

In Issue 98 of the Mobile World Briefing, when last reviewing the European market, we suggested that "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%". We mention this, because the normal seasonal pattern was repeated, we did see 25m new connections across the region and penetration is now standing at exactly 110%.

The point here is not to emphasise the accuracy of our predictions, but rather the fact that penetration has continued to rise, even though the notional barrier of 100% has been comprehensively breached. In most markets, the principal driver appears to be the new generation of low cost USB modems, but in countries such as France, Belgium and some of the territories further east, there is still untapped first SIM demand.

For the first time this quarter, the ten largest mobile operators in Europe all have more than 20m customers, as O2 UK passed this milestone for the first time and UMC Ukraine repassed it.

At the end of the third quarter, Europe's ten largest MNOs had a combined total of just under 275m customers, or 39.2% of the total market. The current quarter has seen this increase to over 282m, but the proportion has dropped to just below 39%. Only two companies in the top ten managed to increase their share of the overall European market - the German subsidiaries of T-Mobile and Vodafone, which produced gains of 0.04% and 0.03% respectively. Every other operator gave ground, with Turkcell faring worst, dropping 0.9% to 4.88%. T-Mobile's gain takes it some part of the way back to where it was at the end of Q2, as it lost 13bp of share in Q3, while Vodafone's improvement appears to be part of a longer term uptrend. The 1st chart that we show is, in fact, the top 20 and as can be seen, all 20 have eight figure bases. Together, these 20 account for 61.2% of the total European customer base, marginally below the 61.5% seen at the end of Q3 and the 62.2% from the year before. The decline is to be expected, as even at this late stage in the industry's development, new operators are starting up.

TIM in Italy remains Europe's largest operator, but the strong performance by T-Mobile has given it second place, ahead of Turkcell once more. The gap between the two leaders is now down to 380k, compared with 840k at the end of last quarter and with German penetration at 112% and Italian at 146%, the probability is that T-Mobile will take the lead in the current quarter. That conclusion assumes Turkcell will continue to struggle for growth in a market where its competitors, Vodafone and Avea, are taking an increasing share of all new connections.

Vodafone Germany is in fourth place, as it has been for several quarters, while its sister company in Italy continues in fifth. The gap between the two widened significantly in the last quarter however, with Germany extending its lead from 3.4m to 4.3m.

Vodafone is the most heavily represented company on this list, with three other subsidiaries in the top 20. These are in the UK, Turkey and Spain and they take 12th, 14th and 15th places respectively, while the company's French associate SFR is in 11th place and its Polish joint venture Polkomtel is in 20th. No other major operator comes close to rivalling this footprint. France Telecom comes closest, if "close" is the right word, with Orange France in sixth, Orange UK in 16th and Orange Poland (PTK) in 19th. T-Mobile and Telefonica are the only other multinational operators with more than a single entry, the first having Germany (second) and the UK (13th) while Telefonica has Spain (eighth) and the UK (ninth). Both are close to a third entry with T-Mobile's Polish company (PTC) being in 21st place and O2 Germany in 22nd.

The second chart in this section shows the fastest growing networks in Europe over the last quarter.

All of the companies on the list added a minimum of 300k new customers in the quarter, with the top 13 adding more than 0.5m and the top three more than one million. This is not something one would readily associate with a mature market, let alone one which is "saturated" as some commentators have suggested. Looking at this in another light, it is interesting that 15 of the largest 20 operators added more than one million new customers over the last year, while the top six all added three million or more. In aggregate, the top 20 added just under 40m new subscribers in 2007, or 500k each per quarter.

Largest MNOs by Customers, Q1 - Q4 07

Largest MNOs by Net Adds, Venture Customers, Q4 07

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