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Contracts now dominating UK connections market, says CCS Insight Subscriptions: Forecast(M)
Contract connections have overtaken prepay in the UK for the first time, according to CCS Insight chief executive Shaun Collins. At the turn of the year, he told the 200
at the launch, the balance had shifted for the first time since prepay’s introduction, with prepay now only accounting for 49 per cent (30 million) of the market. According to Ofcom figures, in 2005,
prepay accounted for 68 per cent of the market. It slowly declined year on year to 64 per cent in 2006 and 2007, falling to 59 per cent in 2008, 57 per cent in 2009 and to 55 per cent in 2010. Collins claims the attitude from cus-
tomers towards prepay has changed as a result of higher value offered, and that customers’ first connection is no longer that of prepay – as in previous years. “We are seeing quite a profound change in the UK,” said Collins. “ If I’d done this
presentation a year ago, in terms of sub- scriptions, we were a prepay market. Most people on the street, bought a pre- pay SIM before they bought a contract subscription. That’s changed. “The UK is now around 51 per cent con-
tact an 49 per cent prepay. That’s going to continue in the next few months and possibly years.”
SIM-only growth Collins added a key reason for this is the continued rise of SIM-only contracts, which account for between 20 and 30 per cent of the market today – expected to rise to around 40 per cent this year. He expects almost all customers will
be using a smartphone by 2017 – and that SIM-only is being fuelled by customers opting to retain their existing device come the end of their contract – due to a lack of innovation in newer models.
100 80 60 Contract 40 10 2008 2009 2010 2011
Prepaid 2012
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CCS: UK the fastest growing market for 4G take-up in EU
• 4G adoption years ahead of 3G • All smartphones 4G by 2017
CCS Insight expects all handsets and tariffs to be 4G-ready within the next three years – claiming adoption of 4G from the UK market is four years ahead of that when compared to 3G in 2003. Chief executive Shaun Collins claims
that by 2017, every handset shipped will be 4G-ready and that by Q4 of this year it will become “impossible” to find a non-4G network tariff. He added that the level of uptake on 4G from the UK market has reached the same level in just 20 months that 3G did in four and a half years. This, he claims, has been fuelled by
lower price points in the market on handsets, noting the sub-£100 Kestrel (manufactured by Huawei) on EE – again, stating the four and half year timescale when compared with 3G. “Eighteen months ago the UK was
almost a year before everyone else. As a result it catalysed the market place. Sometime around the middle of this year, from a standing start 20 months ago, the UK will be the largest LTE market in Europe in terms of subscriptions. The pace of change has been astonishing. “We’re giving them smartphones, broadband experiences in their pockets. Nearly
everything you ship will be Collins: Astonishing 4G uptake
lagging behind the world,” said Collins. “Even the Dutch were ahead of us. We had to find a way to pick this up. The UK government made the decision to allow EE to go forward with a 4G network
LTE by 2017. We are reaching a point in uptake in 20 months which took more than four years with 3G. It’s astonishing. “In fact it’s so fast, by the fourth quarter of this year in the UK, I think it will be impossible to find a tariff that is 3G and not 4G. In other words, you will buy it by default, even if you don’t have 4G where you live. “Everything you sell will be sold with an LTE modem in.”
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2016 2017 Forecasts: SIM-only is a major reason contracts are more popular than prepay
Shared 4G data plans to become the norm in UK
Shaun Collins says he expects UK network operators to replicate the US market in pushing sales of shared 4G data plans to customers. According to Collins, the model,
which allows multiple devices such as smartphone, tablet and WiFi dongles to run 4G data services from a single account, has been heavily adopted by US operator Verizon – around half of all new contracts. EE is understood to be currently the
only network operator to offer 4G share plans in the UK for consumers, whilst Vodafone at present offers it for busi- ness customers only. “Even if you only buy one device,
you have to go on a shared tariff. We will see a lot more shared data tariffs in the UK,” Collins said. He revealed more than 17 million
tablets were sold in the UK last year – enough for every household.
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