Breaking Down ComReg's latest Report on the Irish Mobile Market
Looking at the data, some obvious trends are beginning to surface in the Irish mobile market.
Published 18/09/18
ComReg's quarterly report on the Irish mobile market highlights the fact that we are rapidly gravitating towards faster networks and more advanced devices. The penetration of smartphones and Machine-to-Machine (M2M) subscriptions continues a steady growth trajectory, standing at 126% in ComReg's Q2 report for 2018. At the same time, mobile broadband subscriptions continue to slide, falling almost 6% in the last year, as the rollout of fixed fibre connections has allowed more rural consumers to access gigabit Internet speeds.
The popularity of post-paid (or bill pay) plans has risen for the past five consecutive quarters, as less expensive pre-paid plans become less attractive for consumers. Post-paid plans accounted for 47.2% of subscriptions, with pre-paid options accounting for 52.8%. These figures will please mobile providers because bill pay customers are willing to pay more for their service and stay longer due to lengthy contracts. This greater popularity can be attributed to the fact that flagship smartphones from companies such as Apple and Samsung now cost more than just a few years ago, and the idea that people aren't upgrading to newer devices as frequently as they once did.
On a more in-depth level, Vodafone boasts the highest share of post-paid customers in Ireland, with over 65% of its customers being post-paid and just 34.4% being pre-paid. As you will discover later, this a key reason for Vodafone's industry-leading APRU. Three's customer base is composed of 59.9% post-paid customers and 40.4% pre-paid customers, while eir has the largest proportion of pre-paid customers of Ireland's three networks, with 48.2% being pre-paid and 51.8% being post-paid. Again, this figure will be important to keep in mind when we investigate APRU as eir's market share by revenue dwarfs that of Vodafone and Three. Interestingly, Tesco Mobile (which is the largest MVNO in Ireland) is a primarily pre-paid network with 84.8% of its customers choosing pre-pay.
The popularity of post-paid (or bill pay) plans has risen for the past five consecutive quarters, as less expensive pre-paid plans become less attractive for consumers. Post-paid plans accounted for 47.2% of subscriptions, with pre-paid options accounting for 52.8%. These figures will please mobile providers because bill pay customers are willing to pay more for their service and stay longer due to lengthy contracts. This greater popularity can be attributed to the fact that flagship smartphones from companies such as Apple and Samsung now cost more than just a few years ago, and the idea that people aren't upgrading to newer devices as frequently as they once did.
On a more in-depth level, Vodafone boasts the highest share of post-paid customers in Ireland, with over 65% of its customers being post-paid and just 34.4% being pre-paid. As you will discover later, this a key reason for Vodafone's industry-leading APRU. Three's customer base is composed of 59.9% post-paid customers and 40.4% pre-paid customers, while eir has the largest proportion of pre-paid customers of Ireland's three networks, with 48.2% being pre-paid and 51.8% being post-paid. Again, this figure will be important to keep in mind when we investigate APRU as eir's market share by revenue dwarfs that of Vodafone and Three. Interestingly, Tesco Mobile (which is the largest MVNO in Ireland) is a primarily pre-paid network with 84.8% of its customers choosing pre-pay.
Data Usage Skyrockets, fueled by 4G Growth
4G networks are now the most prolific in Ireland, with 49.2% of mobile subscriptions accessing a 4G service. This marks a major breakthrough, as it means 4G is on the verge of accounting for over half of all mobile subscriptions. The technology has transformed our mobile data experience by offering significantly greater capacity and speeds than 3G networks. The growth of 4G has encouraged people to consume more data, with mobile data usage skyrocketing 46% to 95,464 terabytes in the past year. 4G networks now account for 86.8% of all mobile data traffic, compared to 79.8% last year. This increase in data usage will have noticeable impacts on the performance of our mobile networks, which are increasingly suffering from congestion issues. With the arrival of 5G imminent in 2019, it will be interesting to see how access to "gigabit class" speeds will shape our usage.
The average smartphone user consumes 5.8GB of data monthly, meaning Irish consumers are amongst the most data-hungry on the continent of Europe. Mobile broadband subscribers gobble 15.6GB of data each month, a figure which has grown for over five consecutive quarters. In fact, Q2 2018 represented an abnormally sharp increase in mobile broadband usage, suggesting the growth in usage of Internet services is accelerating.
Something which may come as surprise to many who use free services such as Whatsapp and Viber for calling, the use of our smartphones for placing calls continues to grow. The number of mobile minutes has climbed 1.6% compared to Q2 in 2017. This is an important metric which shows us that consumers still rely on traditional cellular calls for voice communication, even if these services cost us money. However, as we look at SMS, its clear that social services like Whatsapp are wreaking havoc on SMS usage, plummeting almost 10% in the last year. Likewise, MMS usage collapsed 10.6% since this time last year. The continued decline of SMS and MMS, two services which once provided healthy revenues for mobile providers, speaks to the growth of instant messaging applications. The pace of this decline will only hasten as the adoption of smartphones continues and the quality of our data networks improves.
The introduction of new EU roaming policies in 2017 has had a substantial impact on the usage of our smartphones abroad. Vodafone and eir now allow customers to use their full domestic data, call and text allowances anywhere in the EU, while Three has boosted the roaming data allowances too. With this in mind, ComReg's report details that roaming data traffic has ballooned by a staggering 178% since Q2 2017. Similarly, roaming voice minutes grew by 26.8% in the same period. With roaming charges in the EU a distant past, Irish consumers are using their smartphones more than ever abroad without the fear of incurring panic-inducing charges.
The average smartphone user consumes 5.8GB of data monthly, meaning Irish consumers are amongst the most data-hungry on the continent of Europe. Mobile broadband subscribers gobble 15.6GB of data each month, a figure which has grown for over five consecutive quarters. In fact, Q2 2018 represented an abnormally sharp increase in mobile broadband usage, suggesting the growth in usage of Internet services is accelerating.
Something which may come as surprise to many who use free services such as Whatsapp and Viber for calling, the use of our smartphones for placing calls continues to grow. The number of mobile minutes has climbed 1.6% compared to Q2 in 2017. This is an important metric which shows us that consumers still rely on traditional cellular calls for voice communication, even if these services cost us money. However, as we look at SMS, its clear that social services like Whatsapp are wreaking havoc on SMS usage, plummeting almost 10% in the last year. Likewise, MMS usage collapsed 10.6% since this time last year. The continued decline of SMS and MMS, two services which once provided healthy revenues for mobile providers, speaks to the growth of instant messaging applications. The pace of this decline will only hasten as the adoption of smartphones continues and the quality of our data networks improves.
The introduction of new EU roaming policies in 2017 has had a substantial impact on the usage of our smartphones abroad. Vodafone and eir now allow customers to use their full domestic data, call and text allowances anywhere in the EU, while Three has boosted the roaming data allowances too. With this in mind, ComReg's report details that roaming data traffic has ballooned by a staggering 178% since Q2 2017. Similarly, roaming voice minutes grew by 26.8% in the same period. With roaming charges in the EU a distant past, Irish consumers are using their smartphones more than ever abroad without the fear of incurring panic-inducing charges.
Revenues reach an All-Time Low
Data and voice revenues grew by 1.5% and 1.7% respectively, with SMS revenues falling 5.3% since Q1 2018. The growth of data revenues is beginning to slow, even as our use of data grows. The cause of this plateau is the increased availability of inexpensive pre-pay and bill pay sim only plans which offer large or unlimited data allowances. Data monetisation is becoming more challenging, and the above is a perfect example of this struggle.
Now, we are moving on to the metrics which are of utmost concern in relation to our mobile providers. Average-Revenue-Per-User (APRU) summarises how much average revenue a company earns from each subscriber on a month to month basis. Monthly APRU continues a decline in virtually every aspect of the mobile market, and this should worry Ireland's mobile providers, who are being faced with the task of providing more for less. Prepaid APRU fell 1.6% to €14.20 since the last quarter, with postpaid APRU declining 0.8% to €37.44, representing a blended fall of 0.6% to €25.37. M2M monthly APRU is now €1.70, a fall of 4.4% since Q1 2018, and mobile broadband APRU declined by 0.8% to €19.22.
When it comes to market share by revenue, Vodafone dominates the charts with a wapping share of 43.8%. Three's revenue share stands at 31.6%, and eir trails at 18.3%. These figures are very important, and I want to take a minute to explain them to you. Vodafone's perception as a premium brand, one that offers a high-quality service, in turn, allows the company to charge higher prices. Vodafone's customers pay more for their service than those with any other provider in Ireland, and this allows the company to maintain a higher revenue market share. However, the most important fact which you need to remember is Vodafone's unique ability to monetise data. Three cannot boast the same revenues because it's "all you can eat" data offerings eliminate the possibility for data monetisation. Similarly, eir's data allowances, which are much higher than those offered by Vodafone, make it more difficult for the company to earn revenue from data charges.
The number of customers who port their numbers to an alternative network has reached a three year low, with just over 85,000 consumers jumping ship to a new network in Q2 2018. This decline in the number of people porting their number tells us a few things about the Irish market in recent months. For one, it is clear that consumers are happier with their mobile providers, something that wouldn't be the case if there were a high number of ports. Furthermore, it also hints at the fact that competition in the Irish market has cooled in recent times, as high competition would result in a high number of people porting their numbers. However, something important which we need to bear in mind is the fact that the number of postpaid subscriptions is continuing to rise, and such subscriptions are significantly less likely to move to an alternative network as frequently as a prepaid customer.
Now, we are moving on to the metrics which are of utmost concern in relation to our mobile providers. Average-Revenue-Per-User (APRU) summarises how much average revenue a company earns from each subscriber on a month to month basis. Monthly APRU continues a decline in virtually every aspect of the mobile market, and this should worry Ireland's mobile providers, who are being faced with the task of providing more for less. Prepaid APRU fell 1.6% to €14.20 since the last quarter, with postpaid APRU declining 0.8% to €37.44, representing a blended fall of 0.6% to €25.37. M2M monthly APRU is now €1.70, a fall of 4.4% since Q1 2018, and mobile broadband APRU declined by 0.8% to €19.22.
When it comes to market share by revenue, Vodafone dominates the charts with a wapping share of 43.8%. Three's revenue share stands at 31.6%, and eir trails at 18.3%. These figures are very important, and I want to take a minute to explain them to you. Vodafone's perception as a premium brand, one that offers a high-quality service, in turn, allows the company to charge higher prices. Vodafone's customers pay more for their service than those with any other provider in Ireland, and this allows the company to maintain a higher revenue market share. However, the most important fact which you need to remember is Vodafone's unique ability to monetise data. Three cannot boast the same revenues because it's "all you can eat" data offerings eliminate the possibility for data monetisation. Similarly, eir's data allowances, which are much higher than those offered by Vodafone, make it more difficult for the company to earn revenue from data charges.
The number of customers who port their numbers to an alternative network has reached a three year low, with just over 85,000 consumers jumping ship to a new network in Q2 2018. This decline in the number of people porting their number tells us a few things about the Irish market in recent months. For one, it is clear that consumers are happier with their mobile providers, something that wouldn't be the case if there were a high number of ports. Furthermore, it also hints at the fact that competition in the Irish market has cooled in recent times, as high competition would result in a high number of people porting their numbers. However, something important which we need to bear in mind is the fact that the number of postpaid subscriptions is continuing to rise, and such subscriptions are significantly less likely to move to an alternative network as frequently as a prepaid customer.
A Duopoly exists in Subscriptions
Jointly, Vodafone (49.2%) and Three (48.2%) account for 97.4% of M2M subscriptions in Ireland, leaving eir with just 2.6%. In this respect, it is easy to understand the fact that a duopoly exists in the Irish mobile market. Three is witnessing a decline in the number of business subscriptions that the company holds, falling for five consecutive quarters to 36.8%. Meanwhile, Vodafone continues to enjoy serving over half of all mobile business subscriptions in Ireland, with a growing market share of 53.6%. It's kind of incredible that Vodafone has managed to achieve such an advantage over its competitors in this aspect. Business subscriptions are highly lucrative for mobile providers as business customers tend to be willing to pay higher prices over longer terms than individual consumers do. eir may dominate the broadband market when it comes to business subscriptions, but that lead certainly isn't in the case in mobile, where the company holds just 9.6% of subscriptions.
Now, time for some of the figures that I know many people will be eagerly awaiting to discover, the total number of subscriptions by mobile provider. Vodafone is the king, holding a market share of 36.4% excluding M2M and mobile broadband subscriptions. Vodafone's market share remains steady, with the same share being held in the last quarter as in Q2 2017. It was reported several years ago that Vodafone was experiencing a steep decline in customers, but that trend has dissipated in recent times. Being the most mature of Ireland's mobile providers, Vodafone places customer retention as a greater priority over customer growth.
Three's share of subscriptions in Ireland is relatively close to that of Vodafone, holding 32.2% in Q2 2018 and representing the highest share for the company in five quarters. Three's subscriber base will likely continue to grow in the coming months as the company nears the competition of its network upgrade programme, which has expanded 4G coverage to a level which is on the verge of surpassing Vodafone. eir's subscription share continues to fall, accounting for 20% in the past quarter. Tesco Mobile held a market share of 8%, portraying the fact that the growth the company once enjoyed has levelled off. The addition of 4G to the MVNO's plans should help stimulate renewed growth over the coming months.
The share of other MVNOs has reached a five-quarter low, standing at 3.4% in Q2 2018. The failure of MVNOs such as Virgin Mobile and Post Mobile to obtain a substantial market share speaks to the strength that the larger brands such as Vodafone and Three wield. Even with ultra-affordable plans, MVNOs are unable to attract a significant number of customers.
Now, time for some of the figures that I know many people will be eagerly awaiting to discover, the total number of subscriptions by mobile provider. Vodafone is the king, holding a market share of 36.4% excluding M2M and mobile broadband subscriptions. Vodafone's market share remains steady, with the same share being held in the last quarter as in Q2 2017. It was reported several years ago that Vodafone was experiencing a steep decline in customers, but that trend has dissipated in recent times. Being the most mature of Ireland's mobile providers, Vodafone places customer retention as a greater priority over customer growth.
Three's share of subscriptions in Ireland is relatively close to that of Vodafone, holding 32.2% in Q2 2018 and representing the highest share for the company in five quarters. Three's subscriber base will likely continue to grow in the coming months as the company nears the competition of its network upgrade programme, which has expanded 4G coverage to a level which is on the verge of surpassing Vodafone. eir's subscription share continues to fall, accounting for 20% in the past quarter. Tesco Mobile held a market share of 8%, portraying the fact that the growth the company once enjoyed has levelled off. The addition of 4G to the MVNO's plans should help stimulate renewed growth over the coming months.
The share of other MVNOs has reached a five-quarter low, standing at 3.4% in Q2 2018. The failure of MVNOs such as Virgin Mobile and Post Mobile to obtain a substantial market share speaks to the strength that the larger brands such as Vodafone and Three wield. Even with ultra-affordable plans, MVNOs are unable to attract a significant number of customers.
ConClusion: A Changing Market
First and foremost, Vodafone's power in the Irish mobile market cannot be underestimated. The company holds an effective monopoly in the number of business subscriptions, enjoys industry-leading revenue market share and boasts a significantly higher proportion of postpaid subscribers than any other network. eir's position as a mobile network in Ireland has weakened in recent times, with the root cause arising from an ailing network, resulting in declining revenues and subscriber numbers. In terms of M2M subscriptions, eir has outright failed to compete with Vodafone and Three. On that note, Three continues to grow its subscriber base in Ireland and is successfully overseeing the transition of more and more customers from prepaid to postpaid plans. However, Three's unlimited data offerings hamper its ability to monetise data, leading to lower revenues than those achieved by Vodafone. In fact, over half of all Irish mobile data traffic flows through Three's network, more than Vodafone and eir combined.
Our usage of SMS and MMS is in a freefall with no apparent end in sight, initiated by a move to instant messaging services which are free. The decline of these services serves as a major cause for the erosion of monthly APRU figures, which have reached an all-time low in the Irish market. The use of 4G networks continues to climb, as 4G coverage expands, leading to rapidly rising data usage amongst Irish consumers, at home and abroad.
The continued use of mobile calls will offset the fears endured by mobile providers that stem from the growth of services such as FaceTime and Whatsapp. This time next year, 5G will have been launched in Ireland, catapulting our society towards further technological advancements in various different industries. As 5G overtakes 4G to become the desired wireless technology, its presence will have a significant impact on the state of the Irish mobile market. Only time will tell exactly how these impacts will play out, and which companies will bask in the glory that will surface for pioneering a revolutionary technology.
Our usage of SMS and MMS is in a freefall with no apparent end in sight, initiated by a move to instant messaging services which are free. The decline of these services serves as a major cause for the erosion of monthly APRU figures, which have reached an all-time low in the Irish market. The use of 4G networks continues to climb, as 4G coverage expands, leading to rapidly rising data usage amongst Irish consumers, at home and abroad.
The continued use of mobile calls will offset the fears endured by mobile providers that stem from the growth of services such as FaceTime and Whatsapp. This time next year, 5G will have been launched in Ireland, catapulting our society towards further technological advancements in various different industries. As 5G overtakes 4G to become the desired wireless technology, its presence will have a significant impact on the state of the Irish mobile market. Only time will tell exactly how these impacts will play out, and which companies will bask in the glory that will surface for pioneering a revolutionary technology.