Industry analysis #2 2018 full year 2017 and 1H 2018 More ... · tefficient AB 8 September 2018 1...

tefficient AB www.tefficient.com 8 September 2018 1

Industry analysis #2 2018

Mobile data – full year 2017 and 1H 2018

More data? Always.

For more? It happens.

This is tefficient’s 20th public analysis on the development and drivers of mobile data. It follows

on our country-focused analysis Unlimited moves the needle – but it’s when mobile addresses slow fixed

internet that something happens.

We have ranked 115 reporting or reported operators based on average data usage per SIM,

total data traffic and revenue per gigabyte.

The data usage per SIM grew for all operators. And it grew quickly. But what happened to

ARPU? Could operators monetise the data usage growth? Our Christmas tree graph visualises

those that delivered on “more for more” – and those that are just followed the “more for less”

stream.

https://tefficient.com/unlimited-moves-the-needle-but-its-when-mobile-addresses-slow-fixed-internet-that-something-happens/



Average consumption per SIM per month? Up to 20 GB.

Figure 1 shows the average mobile data usage for a large number of reporting or reported1 mobile operators

globally. The usage for the full year of 2017 and – if available – the usage for the first half of 2018 are both

displayed.

Figure 1. Average data usage per reported SIM per month – all operators

As it’s near to impossible to read Figure 1 we will break it down into three regions of the world, but let’s first

use Figure 1 to identify the global data usage leaders.

1 By regulators

0

2

4

6

8

10

12

14

16

18

20

DN

A, FI

Zain

, KW

3,

AT

Elis

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Zain

, BH

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asT

one, TW

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Jio, IN

3,

DK

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**LG

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s, K

R

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K

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FY 2017 1H 2018

*) Calculated as country total minus all other (reporting) operators**) Data traffic not reported as such, but calculated based on reported usage

1) Q1 2018 for 1H 2018


Gold DNA Finland with 15.9 GB per SIM and month in FY 2017 and 19.8 GB in 1H 2018

DNA is again the usage leader of the world, but the lead is quite narrow. Most of DNA’s

subscriptions – regular ones as well as data-only subscriptions – have unlimited data volume

where the price depends on the chosen speed tier. DNA isn’t reporting how many subscriptions that

had unlimited data volume, but the December 2017 figure for Finland as a whole was a whopping 64% of

all non-M2M SIMs, making it very likely that Finland is the premier unlimited market in the world. What we

do know is that 58% of DNA’s consumer subscribers had chosen speeds that require 4G in June 2018. DNA

currently sells subscriptions with up to 100 Mbit/s, 300 Mbit/s and one without any speed limitation (called

Max 4G).

Silver Zain Kuwait with 15.7 GB per SIM and month in FY 2017

Zain Kuwait is (alongside other Zain affiliates) in our analysis for the first time. No data is

available for the first half of 2018 – it’s only reported annually. Based on the 2017 data,

Zain was just behind DNA. Zain has been flirting with unlimited, but unlike Finland, the plans have not been

truly unlimited but with certain daily fair usage caps. The subscriptions that currently are sold are bucket

plans, but the buckets are large – up to 1 TB for postpaid and 200 GB for prepaid.

Bronze 3 Austria with 15.4 GB per SIM and month in FY 2017 and 18.4 GB in 1H 2018

Three (or Drei) Austria has always been in the top in our analyses and takes the bronze medal this

time. The usage is still very high, but the distance to first ranked DNA increased in the first half of

2018. This could likely be attributed to 3’s competitors T-Mobile and A1 that, starting 2017,

aggressively targeted a segment that previously was more or less owned by 3: Data-only. In Austria these

subscriptions are used to substitute (slow) fixed broadband. They come with unlimited data volume but are

charged based on speed tiers. In 2016, 3 carried 64% of the Austrian mobile data traffic – but in 2017 that

share had declined to 50%. It suggests that competition had some success in this segment in 2017. In our

country analysis, we show just how important data-only is for the overall data usage of a country – and how

uniquely positioned Austria is in this respect.

Just below the podium we find Elisa from Finland (13.2 GB per SIM per month in 2017 and 16.2 GB in 1H

2018), Zain from Bahrain (12.8 GB per SIM per month in 2017). FarEasTone and Taiwan Mobile, both

from Taiwan, follow with more or less the same usage (12.8 GB in 2017, 14.4/14.7 GB in 1H 2018). Telia

Finland (10.4 GB in 2017) and Jio from India (10.2 GB per SIM per month in 1H 2018) finalise the top ten

list of the world.



Europe: Finnish operators and ‘3’ dominate the top

Now to the first of three breakdowns: Europe. As the world data usage leader, DNA obviously tops also this

chart.

Figure 2. Average data usage per reported SIM per month – European operators

The first eight operators are either Finnish – DNA, Elisa, Telia – or affiliates to ‘3’ (Austria, Denmark,

Sweden). The only non-Finnish, non-‘3’, operator among the eight is Telenor Sweden.

The remaining European operators have customers with significantly lower usage than in the top, but there

are a number of operators that had an average usage above 5 GB per month in 2017: Plus/Cyfrowy

Polsat from Poland, T-Mobile Austria, Tele2 Sweden and TDC from Denmark. In the first half of 2018

Play from Poland and Free from France also surpassed 5 GB.

Free had one of the fastest growth rates in 1H 2018 and unlimited mobile data could be an

explanation. For the first time, Free’s owner Iliad in Q2 reported how large share of Free’s

mobile customers that are on the ‘unlimited’ plan – 55%. All those customers aren’t truly unlimited though;

that plan is unlimited exclusively for customers who also subscribe to Free’s triple-play Freebox. But with a

cap of 100 GB, customers without a Freebox aren’t likely feeling very restricted. The change to 100

GB/unlimited was made in March 2017. It was previously 50 GB.

0

2

4

6

8

10

12

14

16

18

20

DN

A, FI

3, AT

Elis

a, FI

*Telia

, FI

3, D

K**3, U

KTele

nor,

SE

3, SE

Plu

s Cyfr

ow

y P

ols

at,

PL

T-M

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, AT

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TD

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Pla

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, IT

Vodafo

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ne, U

K**N

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, PT

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, CZ

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FY 2017 1H 2018


1) Q1 2018 for 1H 2018


But Europe has a long tail: Operators from six countries – Greece, Czechia, Portugal, Belgium,

Germany and the Netherlands – hold the eleven lowest usage positions.

If comparing the 1H 2018 to the FY 2017 usage bars, we can see that the usage is growing everywhere

(where reported).


Asia and China: Taiwan, Jio, Korea and Malaysia dominate the top

The two Taiwanese operators FarEasTone and Taiwan Mobile hold the top two positions. Taiwan Mobile

passed FarEasTone in 1H 2018. Jio’s usage exceeded the 10 GB per SIM per month level in the first half of

2018.

The Taiwanese market leader, Chunghwa, has significantly lower average data usage than its two smaller

competitors. South Korea was once a data usage leader – not just in Asia, but globally – but the growth in

usage isn’t very fast any longer. The growth in Malaysia is, in contrast, very fast. Celcom overtook Maxis in

average data usage in the first half of 2018.

Figure 3. Average data usage per reported SIM per month – Asian and Chinese operators

Also the Thai operator AIS has had quick usage growth in 1H 2018. But the fastest growth is found in China

and India2:

Vodafone, India +173% growth in average usage per month between FY 2017 and 1H 2018

Idea, India +162%

China Telecom +162%

2 Jio’s growth rate can’t be calculated as the traffic in the first half of 2017 hasn’t been reported

0

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12

14

16

FarE

asT

one, TW

1)

Taiw

an M

obile

, TW

1)

Jio, IN

Chunghw

a, TW

1)

**LG

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R

**M

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on, AU

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a U

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, CN

(handse

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gte

l, S

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XL, ID

Chin

a T

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N

Idea, IN

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ne, IN

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D

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link, BD

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ll, N

P

Gb

yte

pe

r re

po

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d S

IM p

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mo

nth

FY 2017 1H 2018


1) Q1 2018 for 1H 2018


Airtel, India +150%

China Unicom +117%

China Mobile +88%

Even if the Indian incumbent operators have very fast growth in data usage, they are

obviously still far from Jio’s 10.2 GB per SIM per month in 1H 2018. Note also that all

three Chinese operators exclude data-only from their reported data traffic.

The fastest usage

growth is found in

India and China


RoW: Zain dominates the top

The rest of world ranking combines North American, Latin American and Russian operators with operators

from Middle East, Africa and reporting international groups, see Figure 4.

Figure 4. Average data usage per reported SIM per month – RoW operators

If we disregard 3 Europe group whose affiliates are represented in the European comparison (Figure 2), it’s

interesting to see how high the average usage of Zain Group is. If looking at Zain’s reported 2017 figures,

the average is lifted by Kuwait, Bahrain, Saudi Arabia and Jordan whereas Iraq and Sudan lower it.

Russian and Turkish operators have high average usage. The Latin American operators have – with the

exception of Chile – fairly low average usage, but the growth in 1H 2018 has generally been high.

It is a pity that none of the major US or Canadian operators report their data traffic or usage. The only

sample in Figure 4 is U.S. Cellular. It’s likely that four larger US carriers Verizon, AT&T, T-Mobile and Sprint

could have higher data usage (the country average was 3.3 GB in 2017).

African operators are – together with operators from Uzbekistan and Ukraine – having the lowest monthly

data usage per SIM in our sample.

0

2

4

6

8

10

12

14

16

18

Zain

, KW

Zain

, BH

Zain

, SA

Zain

, JO

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roup

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, G

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, TR (

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-only

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ce Q

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cell,

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FY 2017 1H 2018



China Mobile overtakes Jio as the largest operator in the world – also in traffic

We have seen that the data usage varies much between customers of different operators in different

countries. If we instead compare the total data traffic, the large population differences between the

countries make the spread even wider, see Figure 5.

Figure 5. Total data traffic – all operators

As it’s near to impossible to read Figure 5 we will in a bit break it down into the three regions of the world,

but let’s first use Figure 5 to identify the global data traffic leaders.

0

2000

4000

6000

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12000

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[P

B]

FY 2017 1H 2018


1) Q1 2018 for 1H 2018


Gold China Mobile with 12569 PB in FY 2017 and 12219 PB in 1H 2018

With 906 million mobile subscriptions, China Mobile is the operator with the largest

customer base in the world. But in our previous report, China Mobile didn’t have

the highest mobile data traffic. In the first half of this year, China Mobile however

overtook Jio to become the biggest carrier. Noticeably, unlike local competition, China Mobile uses the

home-grown Chinese TD-LTE standard for 4G. Unclear if it has an impact, but China Mobile’s traffic growth

rate was slower than that of China Telecom and China Unicom. But China Mobile’s subscription base is larger

than the sum of its two competitors3.

Silver Jio with 11480 PB in 1H 2018

The Indian market disruptor Jio continues to grow its mobile subscription base quickly. In June,

Jio had 215 million subscribers – less than two years after launch. Since Jio started to report its

mobile data traffic in Q3 2017 it has shown some growth, but it comes mainly as a consequence

of the growth in the subscription base, less so from growth in the usage per subscriber. With its

free launch proposition, the high usage was there from day one. This also means that Jio was passed by

China Mobile as the operator with the largest traffic in the world during the first half of 2018.

Bronze China Unicom with 7786 PB in FY 2017 and 9039 PB in 1H 2018

It’s impressive to see that China Unicom already in the first half of 2018 handled more data

traffic than it handled during the full year of 2017. It says something about the usage growth

rate in China. In contrast to Jio, the mobile traffic of China Unicom is driven by growth in the

average usage more than growth in its subscription base. When the base grew 6% between 2017 and the

first half of 2018 – to 302 million – the usage grew 117%. With regards to 4G, China Unicom (as well as

fourth-ranked China Telecom) uses the ‘regular’ FDD-LTE standard.

Other country operators that are highly ranked are Airtel from India (#6), MegaFon from Russia (#7) and

Telkomsel from Indonesia (#10). Airtel actually carried more traffic than the Vodafone Group as a whole4

(#6 based on 2017) in the first half of 2018. Now that the last hinders for the merger between Vodafone

and Idea in India are cleared, it’s of interest to sum up the two and see where they would have been in 1H

2018: Pretty much exactly the same place as Airtel (3700 PB).

3 At the time of writing, rumours have surfaced that the Chinese government considers to merge China Unicom and China Telecom. 4 Vodafone Group excludes Vodafone India (and VodafoneZiggo from the Netherlands) from its definition due to the merger with Idea

and the JV with Liberty Global


Europe: The largest operators are not the usual suspects

First to the European breakdown. Since the highest ranked European operator is just number 28 in our

global rank, we could generally conclude that the European countries are less populated than the global

leaders – but also that growth is significantly faster outside of Europe. And it’s not the operators that you

necessarily would suspect (with the largest SIM base) that are in the top of Figure 6.

Figure 6. Total data traffic – European operators

The relatively newly created Wind 3 joint venture5 is Europe’s new number one in total

data traffic. This is true for both the full year of 2017 and for the first half of 2018.

Vodafone Italy is number 11 from the top and TIM number 13. There’s generally good

growth in the Italian data traffic which can be attributed to the market entry of Iliad in May this year. The

Italian operators have upped the mobile data allowances – and lowered the price points – to mitigate Iliad’s

ability to disrupt. Iliad has not yet reported any mobile data traffic for Italy, but indicated that it had

acquired 1.5 million subscribers in the beginning of August. With an initial allowance of 30 GB per month for

5.99 EUR – later changed to 40 GB for 6.99 EUR – we look forward to adding them to our usage charts.

5 CK Hutchson was in September 2018 given EU’s blessing for a buy-out of VEON, making CK Hutchison the 100% owner of Wind 3.

0

100

200

300

400

500

600

700

800

900

**W

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K

Sw

issc

om

, CH

**Tele

2, SE

*A1, AT

Tele

nor,

SE

Telia

, SE

TD

C, D

K

3, SE

Vodafo

ne, RO

*T-M

obile

, N

L

3, D

K

Vodafo

ne, PT

Telia

, N

O

Tele

nor,

NO

Tele

nor,

DK

**KPN

, N

L

Telia

, D

K

Vodafo

ne Z

iggo, N

L

**N

OS, PT

O2, CZ

Tele

2, LT

MEO

, PT

**Pro

xim

us,

BE

Telia

, LT

**O

range, BE

*Tele

net

BASE, BE

**Tele

2, N

L

Bite, LT

T-M

obile

, CZ

Vodafo

ne, G

R

Ice, N

O

Mo

bil

e d

ata

tra

ffic

[P

B]

FY 2017 1H 2018


1) Q1 2018 for 1H 2018


3 UK has been pushed down from its previous number one position. The company is known for its all-you-

can-eat plans since long and is still the only provider that offers unbundled unlimited in the UK6. Given that

Three just holds about 14% of the UK’s total subscription base, a second place in Europe is still quite an

achievement.

The third largest operator in Europe is Poland’s Plus/Cyfrowy Polsat. It uses data-only as fixed-line

substitution – but is now is process of becoming a significant shareholder in Netia, a fixed operator. Fifth-

ranked Play is also Polish and has a similar approach – using mobile as fixed-line replacement – as

Plus/Cyfrowy Polsat has had.

In between the two Polish operators, we find Elisa from Finland. We have said it

before, but with Finland’s 5.5 million inhabitants, it is impressive to find Elisa being

number 4 in Europe in 2017. Local competitors DNA and Telia are number 10 and 16

respectively.

Europe’s largest operator in SIMs – O2 Germany – is number 14.

If we instead look at the traffic data for 1H 2018, we could identify Free from France

as a fast-mover. The company has moved from number 7 in 2017 to number 2 in 1H

2018. Also Free’s competitor Bouygues carries a lot of mobile data – ranked number

6 in 2017.

6 Virgin Media has introduced an unlimited 25 GBP mobile data plan in 2018, but it is exclusively sold to customers who also subscribe

to Virgin Media fixed broadband and TV.

Free moved from a

number 7 position

in 2017 to a

number 2 position

in 1H 2018


Asia and China: Massive traffic growth

We find the four global traffic leaders in the top of the Asian/Chinese comparison: China Mobile, Jio,

China Unicom and China Telecom.

Figure 7. Total data traffic – Asian and Chinese operators

There are several operators in Figure 7 that in the first half of 2018 carried more mobile

data than in the full year of 2017 – China Unicom and China Telecom as well as

Airtel, Idea and Vodafone from India. It goes without saying that the same is true

also for Jio even though there’s no full year 2017 traffic data to support it.

Telkomsel from Indonesia – with 179 million subscribers in a very competitive market –

is number 6 followed by the Korean market leader, SK Telecom.

0

2000

4000

6000

8000

10000

12000

14000

Chin

a M

obile

, CN

(handse

t)

Jio, IN

Chin

a U

nic

om

, CN

(handse

t)

Chin

a T

ele

com

, CN

(handse

t)

Airte

l, I

N

Telk

om

sel, I

D

**SK T

ele

com

, KR

AIS

, TH

Idea, IN

Vodafo

ne, IN

XL, ID

3, ID

Taiw

an M

obile

, TW

**LG

Uplu

s, K

R

FarE

asT

one, TW

Indosa

t, I

D

Chunghw

a, TW

**M

axi

s, M

Y

Celc

om

, M

Y

Vodafo

ne H

utc

his

on, AU

**G

ram

eenphone, BD

**VEO

N, PK

Robi, B

D

Dia

log, LK

**Sin

gte

l, S

G

**Bangla

link, BD

**M

1, SG

Nce

ll, N

P

Mo

bil

e d

ata

tra

ffic

[P

B]

FY 2017 1H 2018


1) Q1 2018 for 1H 2018

Many Chinese and

large Asian

operators carried

more data in 1H

2018 than in the

full year of 2017


RoW: MegaFon larger than 3 Europe Group and Zain Group

Figure 8 collects operators from the rest of the world, but also a few reporting international groups.

Figure 8. Total data traffic – Rest of world operators

The Russian operator MegaFon (#2) is an international giant in mobile data, carrying more traffic than the

whole of 3 Europe Group or the whole group of Zain. Even though MegaFon’s local competitors MTS and

Beeline (VEON) are large too, MegaFon is larger. This can be attributed to MegaFon’s acquisition of the 4G

data-only specialist Yota back in 2013.

Saudi, Turkish and Brazilian operators follow – together with MTN Irancell, an operator with 45 million

subscribers showing a quickly increasing appetite for mobile data.

0

500

1000

1500

2000

2500

3000

3500

Vodafo

ne, G

roup

**M

egaFon, RU

3 E

uro

pe, G

roup

Zain

, G

roup

**M

TS, RU

(sm

art

phone)

MTN

, G

roup

**Beelin

e, RU

Zain

, SA

**Turk

cell,

TR

**TIM

, BR

**M

TN

Ira

nce

ll, I

R

Viv

o, BR

**Türk

Tele

kom

, TR (

4G

-only

sin

ce Q

1 1

8)

Vodafo

ne, TR

Zain

, KW

Zain

, JO

Vodaco

m, G

roup

Movis

tar,

AR

Vodafo

ne, EG

Movis

tar,

CL

Movis

tar,

PE

**M

TN

, N

G

**M

TN

, ZA

Movis

tar,

MX

U.S

. Cellu

lar,

US

Zain

, BH

Movis

tar,

CO

**Kyiv

star,

UA

Zain

, IQ

Zain

, SD

**D

jezz

y, D

Z

**Beelin

e, U

Z

Mo

bil

e d

ata

tra

ffic

[P

B]

FY 2017 1H 2018


1) Q1 2018 for 1H 2018


What’s the revenue per GB? How long is a piece of string?

In our country analysis, we have traditionally been focused on mature markets. The way we calculate

revenue per gigabyte – total mobile service revenue per carried gigabyte – will resonate with mature

markets where operators generally aren’t attempting to monetise voice and SMS based on usage. Instead

they have made voice and messaging allowances unlimited and included them in a flat fee.

In maturing markets, usage-based monetisation is still used to a much higher degree. This is true also for

voice and messaging. With our calculation method, one might conclude that the operators ending up with

the highest effective revenue per gigabyte would thus be operators from maturing markets. The operators to

the right in Figure 9 aren’t maturing market operators, though.

Figure 9. Total mobile service revenue per gigabyte – all operators7

7 That also report mobile service revenue

0

5

10

15

20

25

30

Jio, IN

3, ID

DN

A, FI

XL, ID

Elis

a, FI

Taiw

an M

obile

, TW

1)

3, AT

Zain

, G

roup

Zain

, BH

Zain

, SA

Indosa

t, I

DFarE

asT

one, TW

1)

**M

egaFon, RU

Zain

, JO

*Telia

, FI

Zain

, KW

Pla

y, PL

AIS

, TH

Chunghw

a, TW

1)

Tele

2, LT 1

)3, D

KCelc

om

, M

YT-M

obile

, AT

**Türk

Tele

kom

, TR (

4G

-only

sin

ce Q

1 1

8)

**3, U

KAirte

l, I

NTelia

, LT 1

)Chin

a U

nic

om

, CN

(handse

t)O

range, PL

*T-M

obile

, PL

**Beelin

e, RU

**M

TS, RU

(sm

art

phone)

Telk

om

sel, I

D**M

axi

s, M

Y**M

TN

Ira

nce

ll, I

R3 E

uro

pe, G

roup

Idea, IN

Vodafo

ne, TR

Bite, LT

1)

TD

C, D

K**Fre

e, FR

3, SE

Vodafo

ne, IN

Tele

nor,

SE

Tele

nor,

DK

**LG

Uplu

s, K

R**Tele

2, SE

Vodafo

ne, EG

Dia

log, LK

Telia

, D

K*A1, AT

**TIM

, BR

Robi, B

D**Kyiv

star,

UA

**Bouygues,

FR

Movis

tar,

CL

**W

ind 3

, IT

Vodafo

ne, RO

Chin

a T

ele

com

, CN

(handse

t)**Bangla

link, BD

**G

ram

eenphone, BD

**SK T

ele

com

, KR

Movis

tar,

PE

**Tele

2, N

LIc

e, N

OM

TN

, G

roup

**M

1, SG

Chin

a M

obile

, CN

(handse

t)Vodafo

ne H

utc

his

on, AU

*T-M

obile

, N

L**VEO

N, PK

Movis

tar,

MX

Movis

tar,

CO

Telia

, SE

Zain

, SD

Telia

, N

OVodafo

ne, PT

Vodafo

ne, ES

Movis

tar,

AR

Vodafo

ne, G

roup

Vodafo

ne, IT

**Sin

gte

l, S

GM

EO

, PT

Viv

o, BR

Sw

issc

om

, CH

**TIM

, IT

O2, CZ

**Tele

kom

, D

EZain

, IQ

O2, U

KO

2, D

E*Tele

net

BASE, BE

Tele

nor,

NO

**M

TN

, N

G**M

TN

, ZA

Vodafo

ne, D

EVodafo

ne Z

iggo, N

L 1)

Vodafo

ne, U

KVodaco

m, G

roup

**Beelin

e, U

Z**D

jezz

y, D

ZN

cell,

NP

T-M

obile

, CZ

U.S

. Cellu

lar,

US

**KPN

, N

LVodafo

ne, G

R**O

range, BE

**Pro

xim

us,

BE

To

tal m

ob

ile

se

rvic

e r

eve

nu

e p

er

Gb

yte

[E

UR

]

FY 2017 1H 2018

*) Data traffic calculated as country total minus all other (reporting) operators**) Data traffic not reported as such, but calculated based on reported usage1) Q1 2018 for 1H 2018



We will – for readability reasons – soon break Figure 9 down into Europe, Asia/China and RoW, but let’s first

look into a disclaimer with regards to operators marked with * or **.

Having explained this, let’s now in Figure 9 identify the ten operators that get the lowest total mobile service

revenue per gigabyte in the world. The ranking is primarily based on the full year of 2017 as that data set is

complete:

FY 2017 1H 2018

1. Jio, India n/a 0.2 EUR

2. 3, Indonesia n/a 0.5 EUR

3. DNA, Finland 0.8 EUR 0.7 EUR

4. XL, Indonesia 1.0 EUR 0.6 EUR

5. Elisa, Finland 1.2 EUR 1.0 EUR

6. Taiwan Mobile, Taiwan 1.3 EUR 1.0 EUR Q1 2018

7. 3, Austria 1.3 EUR 1.2 EUR

8. Zain, Group 1.3 EUR 1.1 EUR

9. Zain, Bahrain 1.4 EUR n/a

10. Zain, Saudi Arabia 1.4 EUR n/a

When reporting mobile data traffic, take inspiration from Vodafone and Telefónica

All graphs in this analysis carry this legend:

*) Data traffic calculated as country total minus all other (reporting) operators

**) Data traffic not reported as such, but calculated based on reported usage

There are a number of operators globally that, in their regular easy-to-use Excel sheets, report their total mobile data traffic

quarter by quarter. Of the larger operators groups, Vodafone and Telefónica are two good examples. We encourage all

operators to follow their example.

Some operators are instead reporting – or occasionally indicating – data usage. These are the operators marked with **. The

problem here is that most operators aren’t defining what a user is – sometimes it is all users, sometimes “active data users”

(whatever that is), sometimes smartphone users, sometimes branded smartphone users, sometimes postpaid users, sometimes

4G users. Typically these usage numbers are stated to impress, i.e. they are representative only for a smaller, high-usage,

segment of the subscriber base. An exception to that operators reporting usage isn’t reporting the number of associated users is

VEON Group that reports the usage per mobile data customer and the number of such mobile data customers (a subset of the

total customer base). Well done, VEON.

The majority of operators are still not reporting anything, though. Orange Group, Telia Company and Telenor Group are

examples of it. And, of course, all large North American carriers. In some cases, country regulators are helpful in reporting a

breakdown per operator. But in most cases, the country regulator is just reporting a total. In such occasions – and if also all other

operators report data traffic or at least usage – we have calculated the country residual and assumed that this traffic equals that

of the non-reporting operator. These are the operators marked with *.

It’s not necessarily so that a regulator and the reporting operators use exactly the same definition when reporting data traffic.

Traffic via MVNOs can e.g. disturb the comparability. Where the error risks to be the largest, though, is in countries where the

country residual has been assigned to a *-marked operator while, at the same time, one or several of the other operators are **-

marked operators, i.e. have not explicitly reported the total data traffic but some type of usage.

So if any operator (*-marked or **-marked) is unhappy with its calculated data traffic, the solution is simple: Start to report your

total mobile data traffic.


All these operators are either active in high data usage markets (Finland, Taiwan, Bahrain) or have usage

leadership positions. In the mature market focused country analysis you can identify India, Finland, Taiwan,

Poland and Austria as some of the country markets (of the covered) with the lowest revenue per gigabyte so

this list seems plausible.

The ten operators that get the highest total mobile service revenue per gigabyte in the world are:

FY 2017 1H 2018

1. Proximus, Belgium** 26.7 EUR 17.7 EUR

2. Orange, Belgium** 24.2 EUR 15.0 EUR

3. Vodafone, Greece 23.2 EUR 17.3 EUR

4. KPN, Netherlands** 22.4 EUR n/a

5. U.S. Cellular, US 19.6 EUR n/a

6. T-Mobile, Czechia n/a 13.9 EUR

7. Ncell, Nepal 17.6 EUR 8.8 EUR

8. Djezzy, Algeria** 17.5 EUR 5.1 EUR

9. Beeline, Uzebekistan** 17.3 EUR 4.6 EUR

10. Vodacom, Group 16.9 EUR 13.6 EUR

In the mature market focused country analysis you can identify Greece, Belgium, the Netherlands and, to

some extent, Czechia as some of the country markets (of the covered) with the highest revenue per

gigabyte so this list seems plausible too.

We conclude that there in the first half of 2018 was a 106-fold difference between the operator with the

highest total service revenue per gigabyte (Proximus Belgium) and the operator with the lowest (Jio India).




Europe: Belgium, Greece and the Netherlands have the highest revenue per GB

Figure 10 shows the European breakdown. Since European operators played both in the bottom and in top

of the global chart, the spread is almost as large as in the global view. To ease comparability, the scale is

kept intact throughout this section.

Figure 10. Total mobile service revenue per gigabyte – European operators

As pointed out in the global section, Belgian, Greek and Dutch operators play in the right end – where total

service revenue per consumed gigabyte is high. In the other end of the scale – where the revenue per

gigabyte is low – operators from Finland, Austria, Poland and Lithuania play. Also a couple of affiliates

to ‘3’ – Denmark and the UK – are found here.

The position of 3 stands out: In each8 European market where it operates – Austria, Denmark, the

UK, Sweden and Italy – 3 has revenues per gigabyte which are lower than all of its local competition.

3 has thus improved the competitiveness of many European markets when it comes to mobile data.

At the same time, 3 Group has been allowed by the European Commission to consolidate several European

markets; Austria, Ireland and Italy have all gone from four to three9 MNOs based on initiatives taken by 3’s

8 No data exists for 3 Ireland 9 As a result of the remedies agreed with the EU, Wind 3 sold assets to Iliad in order for it to launch a new fourth MNO. This happened

in May, so Italy is again a four MNO market.

0

5

10

15

20

25

30

DN

A, FI

Elis

a, FI

3, AT

*Telia

, FI

Pla

y, PL

Tele

2, LT 1

)

3, D

K

T-M

obile

, AT

**3, U

K

Telia

, LT 1

)

Ora

nge, PL

*T-M

obile

, PL

Bite, LT 1

)

TD

C, D

K

**Fre

e, FR

3, SE

Tele

nor,

SE

Tele

nor,

DK

**Tele

2, SE

Telia

, D

K

*A1, AT

**Bouygues,

FR

**W

ind 3

, IT

Vodafo

ne, RO

**Tele

2, N

L

Ice, N

O

*T-M

obile

, N

L

Telia

, SE

Telia

, N

O

Vodafo

ne, PT

Vodafo

ne, ES

Vodafo

ne, IT

MEO

, PT

Sw

issc

om

, CH

**TIM

, IT

O2, CZ

**Tele

kom

, D

E

O2, U

K

O2, D

E

*Tele

net

BASE, BE

Tele

nor,

NO

Vodafo

ne, D

E

Vodafo

ne Z

iggo, N

L 1

)

Vodafo

ne, U

K

T-M

obile

, CZ

**KPN

, N

L

Vodafo

ne, G

R

**O

range, BE

**Pro

xim

us,

BE

To

tal m

ob

ile

se

rvic

e r

eve

nu

e p

er

Gb

yte

[E

UR

]

FY 2017 1H 2018



owner CK Hutchison. The exception is the UK where the European Commission turned down 3’s request to

merge with O2.


Asia and China: Revenue per GB going down very quickly

Figure 11 shows the Asian and Chinese operators. Jio, Indonesian and Taiwanese operators have the lowest

revenue per gigabyte whereas no operator (except Nepal’s Ncell in 2017) is having very high revenue. The

quickly growing data usage in China and India has moved the Chinese and Indian operators to the left

compared to our previous analysis.

Figure 11. Total mobile service revenue per gigabyte – Asian and Chinese operators

0

5

10

15

20

25

30

Jio, IN

3, ID

XL, ID

Taiw

an M

obile

, TW

1)

Indosa

t, I

D

FarE

asT

one, TW

1)

AIS

, TH

Chunghw

a, TW

1)

Celc

om

, M

Y

Airte

l, I

N

Chin

a U

nic

om

, CN

(handse

t)

Telk

om

sel, I

D

**M

axi

s, M

Y

Idea, IN

Vodafo

ne, IN

**LG

Uplu

s, K

R

Dia

log, LK

Robi, B

D

Chin

a T

ele

com

, CN

(handse

t)

**Bangla

link, BD

**G

ram

eenphone, BD

**SK T

ele

com

, KR

**M

1, SG

Chin

a M

obile

, CN

(handse

t)

Vodafo

ne H

utc

his

on, AU

**VEO

N, PK

**Sin

gte

l, S

G

Nce

ll, N

P

To

tal m

ob

ile

se

rvic

e r

eve

nu

e p

er

Gb

yte

[E

UR

]

FY 2017 1H 2018



RoW: Big drop in revenue per GB in certain maturing markets

Finally Figure 12 which shows the operators in the rest of the world alongside a few groups that separate

out mobile service revenue in their reporting.

Figure 12. Total mobile service revenue per gigabyte – rest of world operators

Zain’s Middle East operations together with Russian and Turkish operators dominate the left end of the chart

where revenues are the lowest per gigabyte. Latin American operators clutter the middle of the chart

whereas sub-Saharan operators including Vodacom Group populate the right hand of the graph,

especially if looking at the 1H 2018 figures.

The only reporting North American operator, U.S. Cellular, had the highest total service revenue per

consumed gigabyte in 2017. As to Beeline Uzbekistan and Djezzy from Algeria, there’s been a significant

drop in their revenue per gigabyte in 1H 2018.

0

5

10

15

20

25

30

Zain

, G

roup

Zain

, BH

Zain

, SA

**M

egaFon, RU

Zain

, JO

Zain

, KW

**Türk

Tele

kom

, TR (

4G

-only

sin

ce Q

1 1

8)

**Beelin

e, RU

**M

TS, RU

(sm

art

phone)

**M

TN

Ira

nce

ll, I

R

3 E

uro

pe, G

roup

Vodafo

ne, TR

Vodafo

ne, EG

**TIM

, BR

**Kyiv

star,

UA

Movis

tar,

CL

Movis

tar,

PE

MTN

, G

roup

Movis

tar,

MX

Movis

tar,

CO

Zain

, SD

Movis

tar,

AR

Vodafo

ne, G

roup

Viv

o, BR

Zain

, IQ

**M

TN

, N

G

**M

TN

, ZA

Vodaco

m, G

roup

**Beelin

e, U

Z

**D

jezz

y, D

Z

U.S

. Cellu

lar,

US

To

tal m

ob

ile

se

rvic

e r

eve

nu

e p

er

Gb

yte

[E

UR

]

FY 2017 1H 2018



The revenue per GB vs. usage chart

Let us now combine the revenue per gigabyte with the usage. Those of you that have read our data usage

and revenue analyses before are familiar with the revenue per GB vs. usage chart. But where it is

normally populated with countries, it is here populated with operators, see Figure 13.

Figure 13. Mobile data usage vs. total mobile service revenue per Gbyte FY 2017

With all those markers, we have only been able to highlight the operators that have more extreme positions.

The amber line is not a regression line, but illustrates where 20 EUR of ARPU is earned. Operators above the

line earn more – and operators below the line less than 20 EUR.

Most mature markets operators operate with an APRU of around 20 EUR. Many operators in maturing

markets clutter in the southwest or south parts of the chart.

Telia, SE

**Tele2, SE

Telenor, SE3, SE

3, DK

TDC, DK

Elisa, FI

*Telia, FI

DNA, FI

Vodafone, DEO2, DE

T-Mobile, AT

3, AT

Vodafone, UKO2, UK

**3, UK

*T-Mobile, PL

Play, PL

**Proximus, BE**Orange, BE

Vodafone, IT**TIM, IT

**Wind 3, ITVodafone, ES

**KPN, NLVodafone Ziggo, NL 1)

*T-Mobile, NL

Vodafone, GR

**Free, FR **Bouygues, FR

Telenor, NO

Telia, NOIce, NO

Swisscom, CHBite, LT 1)Tele2, LT 1)

**MegaFon, RU

**MTS, RU (smartphone)**Beeline, RU

**Djezzy, DZ

Zain, KW

Zain, BH

Zain, SA

Zain, JO

Zain, IQZain, SD

**MTN Irancell, IR

**MTN, ZA

Movistar, CL

Vivo, BRMovistar, CO

Celcom, MY

**Singtel, SG

**SK Telecom, KR

**LG Uplus, KR

FarEasTone, TW 1)

Chunghwa, TW 1)

Taiwan Mobile, TW 1)

Vodafone Hutchison, AU

U.S. Cellular, US

Zain, Group

Airtel, IN

XL, ID

Dialog, LKIndosat, ID

Idea, IN

AIS, TH

0

2

4

6

8

10

12

14

16

0 5 10 15 20 25 30

Gb

yte

pe

r re

po

rte

d S

IM a

nd

mo

nth

, FY

20

17

Total mobile service revenue per Gbyte, FY 2017 [EUR]

20 EUR ARPU line



The ARPU vs. usage chart

One could criticise the previous chart for comparing the number of gigabytes with something that relates to

it – the revenue per gigabyte. Our next chart, Figure 14, is therefore comparing the number of gigabytes

with the revenue per subscription, i.e. the ARPU. And that is perhaps even more interesting.

Figure 14. Mobile data usage vs. total mobile service revenue per SIM FY 2017

Of all the operators there are six – U.S. Cellular, Swisscom, Telia Norway, Zain Kuwait, LG Uplus and

Telenor Norway – that enjoy much higher total mobile service revenue per SIM than all other operators. It

is interesting that this happens even though the mobile data usage isn’t particularly high – with the

exception of Zain Kuwait. If comparing to the corresponding graph in the country analysis, we note that

Canada, USA and Switzerland (as whole countries) play in this corner. If other US operators – or the

Canadian operators – would have reported their data usage, they would thus likely have been close to the

position of U.S. Cellular. Its position is thus rather more a reflection of a local market reality (high ARPU, low

to medium data usage) than being unique to U.S. Cellular.

The most generous operators are found in the upper left corner: DNA/Elisa Finland, Taiwan

Mobile/FarEasTone, 3 Austria, Zain Bahrain/Saudi Arabia/Jordan, Play Poland and XL Indonesia. These

operators allow customers to consume much data, yet having relatively low ARPU.

Telia, SE

**Tele2, SE

Telenor, SE3, SE

3, DK

TDC, DK

Telia, DK

Elisa, FI

*Telia, FI

DNA, FI

O2, DE

T-Mobile, AT

3, AT

*A1, AT

O2, CZ Vodafone, UKO2, UK

**3, UK

*T-Mobile, PL

Play, PL

**Proximus, BE**Orange, BE

Vodafone, IT

**TIM, IT

**Wind 3, ITVodafone, ES

**KPN, NL

*T-Mobile, NL

Vodafone, GR

**Free, FR**Bouygues, FR

Telenor, NO

Telia, NOIce, NO

Swisscom, CHBite, LT 1)

**MegaFon, RU

**MTS, RU (smartphone)**Beeline, RU

Zain, KW

Zain, BH

Zain, SA

Zain, JO

**MTN Irancell, IR

**MTN, ZA

Movistar, CL

Celcom, MY

**Singtel, SG

**SK Telecom, KR

**LG Uplus, KR

FarEasTone, TW 1)

Chunghwa, TW 1)


Vodafone Hutchison, AU

U.S. Cellular, US

Zain, Group

Vodafone, IN

XL, ID


AIS, TH

R² = 0,4531

0

2

4

6

8

10

12

14

16

0 5 10 15 20 25 30 35 40 45

Gb

yte

pe

r re

po

rte

d S

IM

an

d m

on

th,

FY

20

17

Total mobile service revenue per SIM and month, FY 2017 [EUR]

20 EUR ARPU line

*) Data traffic calculated as country totalminus all other (reporting) operators**) Data traffic not reported as such,but calculated based on reported usage1) Q1 2018 for 1H 2018



But there’s hope in Figure 14: The grey regression line suggests that operators

with higher data usage have higher ARPU.

To moderate this, one has to realise that the adherence to this line (shown by a R2

value below 1) isn’t perfect. And we should also remember that the line visualises an

international – not a national – trend: It is quite difficult to find national examples

showing that operators with higher data usage enjoy higher ARPU. If anything, it’s

rather the opposite. It’s typically the challenger operator that has the customers with

the highest data usage and challenger operators tend to have lower ARPU than

incumbents.

Operators with

higher data usage

tend to have higher

ARPU


Dressing the Christmas tree

Absolute ARPU aside, how many of the operators have been able to deliver on

“more for more” i.e. been able to increase ARPU while increasing data usage? And

how many are just following the “more for less” stream, giving users more data but

not being able to charge anything more?

This might be the ugliest Christmas tree you’ve ever seen, but it is at least

reasonably well balanced this time.

Figure 15. Mobile data usage development vs. ARPU10 development – FY 2017 to 1H 2018

For every single operator in Figure 15, data usage has grown11. But 40% of the operators have

managed to use that to grow ARPU. These operators are having branches growing to the right in the

Christmas tree. Let’s highlight a few best practices:

10 ARPU is calculated as the reported total mobile service (non-equipment) revenue incl. interconnect & roaming divided with the

average number of reported SIMs. It can differ from the definition of operator reported ARPU. 11 In some charts, this seems not to be the case for Türk Telekom (TT), but it’s due to a change in their reporting – from usage per

smartphone in 2017 to usage per 4G sub in 2018. Since the usage for Turkey and competitors grew, this is likely true also for TT.

**Tele2, SE

Elisa, FI

DNA, FI

**Telekom, DEVodafone, DE

O2, DE

3, AT

Vodafone, UKO2, UK

**3, UK

Play, PL

**Wind 3, IT

**Free, FR

**Bouygues, FR**MegaFon, RU

**MTS, RU (smartphone)**Türk Telekom, TR

Vodafone, TR

Vodafone, EG

**MTN Irancell, IR

**MTN, NG

Movistar, CL

Movistar, AR**TIM, BRMovistar, PE

**Maxis, MYCelcom, MY

**M1, SG

**LG Uplus, KR

FarEasTone, TW 1)

Chunghwa, TW 1)


Ncell, NP

Vodafone, IN

Airtel, IN

XL, ID

Robi, BD


Idea, IN

China Unicom, CN (handset)AIS, TH

0

2

4

6

8

10

12

14

16

18

20

-30% -20% -10% 0% 10% 20% 30%

Gb

yte

pe

r re

po

rte

d S

IM a

nd

mo

nth

Total mobile service revenue per SIM and month dev. FY17-1H18 [local currency]

1H 2018 1) Q1 2018

FY 2017

Declining ARPU Increasing ARPU

**) Data traffic not reported as such,but calculated based on reported usage

Data usage grew

for 100% of

operators

ARPU grew for

40% of operators


The Finnish operator DNA has been able to grow its ARPU following the data traffic growth even

though most of DNA’s subscriptions have unlimited data volume. Elisa hasn’t been able to grow

mobile service revenues as quickly.

Celcom in Malaysia has also been able to grow its ARPU; Maxis not as much.

Free in France has also been able to grow its ARPU following its high growth in data usage.

According to Iliad, this is due to a larger share of subscribers now being on the more expensive

subscription tier. In contrast, Bouygues has moved in a lower ARPU direction.

AIS in Thailand has also been able to grow its ARPU – without reported data from AIS’ competitors

it’s difficult to say if it’s unique to AIS

Vodafone in Turkey has had very good ARPU growth – somewhat mitigated by Türk Telekom also

seeing APRU growth

TIM in Brazil has developed its ARPU favourably – Vivo moved in a lower ARPU direction

MTN Irancell in Iran has been able to grow its ARPU fast – but without reported data from

competition it’s difficult to say if it’s unique to MTN Irancell

Movistar in Argentina has had a great growth in its ARPU, but huge fluctuations in the Argentine

Peso might be behind

MTN in Nigeria has too had a great growth in its ARPU, but also here there has been large

fluctuations in the local currency

60% of the operators are on the branches facing left. They have had data usage growth, but still a decline

in ARPU. There are a few markets standing out quite negatively here:

India – see the positons of Airtel, Idea and Vodafone in the bottom left part of the chart. Jio’s

disruptive entry has not only increased the data traffic a lot, it has been very negative for the ARPU

development of Vodafone, Airtel and Idea.

Indonesia – Indosat, XL and Telkomsel (without marker) are all to the left in the chart. The market

is very competitive and data usage is growing fast, but without any positive effect on the ARPU at all.

Taiwan – another very competitive market where incumbent operators were keen to copy the

unlimited initiatives of the newcomers. Attempts to ‘rationalise’ the market seem to have failed as

the ‘discipline’ isn’t present. All the three major Taiwanese operators FarEasTone, Taiwan Mobile and

Chunghwa have had fast ARPU decrease in Q1 2018. Note that as the Q2 data isn’t yet reported, the

Taiwanese trends are only for Q1.


Conclusion

In this analysis, we are presenting twelve

ranking charts and two correlation plots and

we hope these are useful for you in

understanding how mobile data usage,

traffic and service revenues are developing

globally.

But it’s the Christmas tree graph that we’d like

you to remember. It shows that data usage

grows for all operators – and that 40% of

these operators have been able to turn that

into ARPU growth. They have delivered on a

“more for more” promise. They are the

operators that have proven their capability to

monetise an increasing mobile data usage.

In some cases, this follows on an overall market trend – several operators are sharing the same

positive development. Nothing wrong in that.

But it’s when one operator stands out from the crowd it is interesting to go deeper and understand

what that operator has done to turn customers’ data usage growth into ARPU growth. There are

many initiatives taken to change mobile data monetisation or customer loyalty to the better –

unlimited, zero-rating passes, rollover, speed tiers, video tiers, priority tiers, inclusive service tiers,

inclusive content, bundling with fixed – to name a few. But which of them work?

To understand the underlying drivers is a complex and sometimes market-specific quest beyond

the scope of this public analysis.

International telco competitiveness specialist providing operators and suppliers with analysis, benchmarks and go-to-

market preparation. Expertise in quad-play, data monetisation, customer loyalty, Nonstop Retention®, mobile video, Wi-

Fi business models and high margin equipment sales.

www.tefficient.com

http://www.tefficient.com/

Industry analysis #2 2018 full year 2017 and 1H 2018 More ... · tefficient AB 8 September 2018 1...

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Transcript of Industry analysis #2 2018 full year 2017 and 1H 2018 More ... · tefficient AB 8 September 2018 1...