Telecommunication market italy 2013 part 1

Telecommunication Market Italy 2013

M O B I L E N E T W O R K O P E R A T O R

Every quarter AGCOM (Autorità per le Garanzie nelle COMunicazioni) provides fascinating data about Telecommunication Market in Italy.

But every quarter I find the slides too busy and quantitative.

This is my humble attempt at redesigning them. !

Moreover data are aggregated on yearly base and integrated with public information available on Operators’ websites

so that information is easily understandable by everyone.

Redesign AGCOM Telecommunication Markets Observatory

60.6 mln Italians

Italy demographics

91.6 mln Mobile customers

24.6 mln Families

Source: ISTAT 2011, Source: AGCOM Quarterly Telecommunication Markets Observatory 31 December 2013

FIXED BROADBAND

customers

MOBILE customers 31.2

6.9 1.8

28.5 9.7 22.3

2.2

Mobile Network Operator at a glanceMobile and Fixed Customers (wedges represent postpay share), only MNO (mln)

postpay prepay

Source: elaboration on AGCOM Quarterly Telecommunication Markets Observatory 31 December 2013

A “mature” Mobile Market flat YoYMobile customers evolution (mln)

Mob

ile C

usto

mer

s (m

ln)

0

25

50

75

100

2010 2011 2012 2013

5.24.53.73.5

91.792.792.490.6

94.1 96.0 97.2 96.9

MNO MVNO

Source: AGCOM Quarterly Telecommunication Markets Observatory 31 December 2013

Mobile Broadband continue to growthMobile Broadband customers evolution (mln), Data Traffic (petabyte)

Dat

a Tr

affic

(pet

abyt

e)

0

100

200

300

400

Mob

ile C

usto

mer

s (m

ln)

0

25

50

75

100

2010 2011 2012 2013

342.8

258.3

190.3

123.9

39.532.1

19.016.7

96.997.296.094.1

123.9

190.3

258.3

342.8

16.7 19.0

32.139.5

94.1 96.0 97.2 96.9

YoY

x1.3

x1.2

Mobile Customers Mobile broadband Customers Data traffic


Mobile customers evolution by Operator, excl. MVNO (mln)Operators acquire customers with MNP and Churn

Telecom Italia Vodafone Wind 3 Italia

Mob

ile C

usto

mer

s evo

lutio

n, e

xcl. M

VNO

(mln

)

0

25

50

75

100

2010 2011 2012 2013

9.79.59.29.1

22.321.620.919.9

28.529.430.030.6

31.232.232.331.0

+3%

-3%

-3%

+2%

YoY


Customers by segment and contract Type (%)About 80% Prepay Customer

85.8% 79.6%

20.4%14.2%

Consumer

Business

Prepay

Postpay


Mob

ile C

usto

mer

s (m

ln)

0

25

50

75

100

2010 2011 2012 2013

78.680.380.779.7

13.112.411.710.9

Consumer market = 6 x BusinessMobile customers evolution by type of Contract, excl. MVNO (mln)

YoY

Consumer Business

-1.7 mln

+5%

-2%

+0.6 mln


Prepay and Postpay mobile customers, excl. MVNO (share)

Mixed share in Residential, Telecom leader in Business

Consumer customers 2013 (in brackets 2012)

Business customers 2013 (in brackets 2012)

31.7%

27.3%11.4%

29.6%

78.6 mln

(30.9)

(10.8)

(26.1)

(32.2)

(6.8)

26.9%

6.5%5.7%

60.9%

13.1 mln

(59.2)(5.8)

(28.2)



Mob

ile C

usto

mer

s (m

ln)

0

25

50

75

100

2010 2011 2012 2013

72.974.876.476.3

18.717.916.014.3

Prepay Market at 80%, slightly decreasing YoYMobile customers evolution by type of Contract, excl. MVNO (mln)

YoY

-1.9 mln

+4%

-2%

+0.8 mln

Postpay Prepay


Prepay and Postpay mobile customers, excl. MVNO (share)Vodafone first in Prepay, Telecom leader in Postpay

Prepay Customer 2013 (in brackets 2012)

31.7%

28.3%8.4%

31.5%

72.9 mln

(32.7)

(8.4)

(26.8)

(32.1)

Postpay Customer 2013 (in brackets 2012)

28.4%

8.7%

19.0%

43.9%18.7 mln (43.0)

(18.3)

(8.8)

(29.9)



What’s happened in 2013H3G launched a disruptive Prepay bundle offer with SMS, Minutes, Data starting at 4€/month

Source: 3 Italia Web site (2013)

Price war on PrepayAggressive price reduction by all Carrier in the attempt to defend their share

€

min, sms (1 GB included)

4

6

10

400

20

200 300100

ALL IN medium

ALL IN large

TUTTO sec FULL

TUTTO sec FULL

XL

TUTTI 250

ALL Inclusive

120

ALL Inclusive

300

Before

ALL Inclusive

120

ALL Inclusive

300TUTTI 250

After

TUTTO sec FULL

TUTTO sec FULL

XL

Source: Telecom Italia, Vodafone, 3 Italia Web site (2013)


ALL IN small

Price war increased MNP and Churn in 2013

0.26

0.32

0.38

0.44

0.5

Q1'13 Q2'13 Q3'13 Q4'13Vodafone TIM

Source: AGCOM AGCOM Quarterly Telecommunication Markets Observatory 31 December 2013. (*) Churn data as Vodafone financial data, Preliminary result FY14, May 20th 2014 and TIM 1Q result, May 13th 2014

H3G “All In” Offer

Prepay Price War

Back to Rational Market

2

4

6

Q1'13 Q2'13 Q3'13 Q4'13MNP Total

Mobile number portability (mln) and churn (%)

Mobile number Portability 16.2 mln in 2013

Costumer Churn (%) increased as Price war result (*)

What’s new in 2014

A new way to look at prepayPrepay bundle create a potential basin to up-sell customers

Mobile Prepay

Mobile Postpay (with Handset subsidy)

Mobile Prepay

Mobile Postpay (with Handset subsidy)

Prepay bundle

cust

omer

val

ue

Mobile Prepay

Content

Prepay bundle

Fixed 4GHandset

Competition on price Competition on service

2013 2014< 2013

Get ready for Ultra BroadbandTelecom and Vodafone start commercial push for both Fiber and 4G to uplift ARPU

Source: Telecom Italia Web site (2014), Vodafone Web site (2014)

Increased Coverage 4G Try & Buy

Convergence, a “Smart” move to grow on Fixed“TIM Smart” a convergent offer with Fixed, Mobile, Data starting at 39€/month

Source: Telecom Italia Web site, Vodafone Italy website (2014), Image from Telefonica

2GB Data 400 Min 400 SMS

ADSL Unlimited Voice 0 Cent

TIM Smartstarting at 39€/mo

Super ADSLstarting at 29€/mo

ADSL Unlimited Voice 0 Cent

1GB Data

TIM branded services Connectivity included

Announced partnership with Sky

New focus on ContentsTelecom and Vodafone revamped their content Offer

Source: Telecom Italia Web site (2014), Vodafone Web site (2014)

Infinity

Calcio

Spotify

Newspaper RCS

Partnership with major Service provider “Try & Buy” and Monthly discount

• complete offer on IPTV • mobile SkyGo with “connectivity included” • Sky Online (OTT offer coming soon)

TIMvision

TIMmusic

cubolibri

Sky partnership

Thanks!

All data are public and provided by: AGCOM, Quarterly Telecommunication Markets Observatory, 31 December 2013

Carrier Web site and presentation to investors

Telecommunication market italy 2013 part 1

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