The Spanish mobile market continues to grow, but with penetration now over 116%, the pace is slowing. Over the last year the total market grew by 8.5% (3.66m new connections) to reach a total of just under 48m, but most of this increase - 2.36m - came in the first two quarters (Q2 and Q3 2006). In fact, the number of additions in the last two quarters put together barely exceeded the 1.27m figure seen in Q3 06 alone, despite the best efforts of Yoigo, the new entrant. At the end of Q1 2007, Yoigo had connected just 101k customers, despite its aggressive pricing policy. This gave it 0.22% of the market at the quarter end.
Telefonica remains the clear market leader, in terms of customer numbers, with more than 46% of the total market. Over the course of the year, it added slightly more new connections than second-placed Vodafone (1.54m v 1.50m) to take its total to 21.8m. It has been helped here by its lower churn rate. We estimate that to secure its 1.50m, Vodafone had to add 4.77m gross connections, whereas Telefonica connected around 3.0m. Vodafone ended the quarter with a base of nearly 14.0m active customers, nearly three million more than third placed Orange Spain. This last only managed to add 524k customers over the last 12 months and in fact, it saw a reduction of 56k in this last quarter. Again, churn is an issue here and to secure those 524k, Orange had to add over 3.5m new customers, gross of disconnections.
France Telecom states Orange's ARPU on a 12 month rolling average basis which does not make it directly comparable to the numbers reported by its two competitors, but all three companies appear to be maintaining expenditure at close to last year's level, while Vodafone has actually managed to raise its average spend. At Orange, ARPU is currently running at €300 per annum, which might suggest an average monthly spend of €25.0. Telefonica is some way ahead of this, at €31.7, €0.10 down, year on year, while Vodafone reported a total of €33.8, €0.5 up on the same quarter of 2006. Vodafone generates a significantly higher level of usage than either of its competitors, with 187 minutes per customer per month in this most recent quarter, compared with 160 at Telefonica and 130 at Orange.
The chart below shows the trend in usage at all three main operators over the past 12 quarters.
We have restated the data for Telefonica and Vodafone to allow direct comparability with the Orange numbers. There isn't a huge degree of variation here, but as well as having the highest usage over the period, Vodafone has also increased its average minutes at a faster rate (2.18% CQGR) than either Telefonica (1.89%) or Orange (1.96%). It is no coincidence that the acceleration in Vodafone's usage took place at the same time as the company began promoting 3G handsets.
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World. To download a sample issue of the Briefing in PDF format, please click here. For more information including full subscription pricing, please visit The Mobile World"
Posted to the site on 7th June 2007
Posted to: www.cellular-news.com/story/24209.php