Ranking The World’s Best Mobile Operators

© 2009, Portio Research. All Rights Reserved

1
Ranking The World’s Best Mobile Operators

Portio Research Limited.
Published June 2009 by Portio Research Limited © Copyr...
Ranking The World’s Best Mobile Operators

Contents
Introduction ............................................................
Ranking The World’s Best Mobile Operators
Formula and Rationale..............................................................
Ranking The World’s Best Mobile Operators

List of Figures
Figure 1:
Figure 2:
Figure 3:
Figure 4:
Figure 5:
Figure 6:
Fig...
Ranking The World’s Best Mobile Operators
Figure 52:
Figure 53:
Figure 54:
Figure 55:
Figure 56:
Figure 57:
Figure 58:
Fig...
Ranking The World’s Best Mobile Operators
Figure 104: Top 3 MNOs Worldwide – Measuring Subscriber Loyalty (2008) ............
Ranking The World’s Best Mobile Operators
Figure 157:
Figure 158:
Figure 159:
Figure 160:
Figure 161:
Figure 162:
Figure 1...
Ranking The World’s Best Mobile Operators

List of Tables
Table 1:
Table 2:
Table 3:
Table 4:
Table 5:
Table 6:
Table 7:
T...
Ranking The World’s Best Mobile Operators
Table 50:
Table 51:
Table 52:
Table 53:
Table 54:
Table 55:
Table 56:
Table 57:
...
Ranking The World’s Best Mobile Operators

Chapter 1
Introduction

© 2009, Portio Research. All Rights Reserved

11
Ranking The World’s Best Mobile Operators

Introduction
Around the world, the market conditions that mobile network operat...
Ranking The World’s Best Mobile Operators
•

Total Revenues
Subscriber Base
ARPU

•
•

Total Revenues: The revenue generat...
Ranking The World’s Best Mobile Operators
market, as emerging markets generally yield low revenue per user compared to dev...
Ranking The World’s Best Mobile Operators
ARPU: The ARPU (Average Revenue Per User) achieved by an operator reflects the
p...
Ranking The World’s Best Mobile Operators
The key features of this report include the following:
• A comparative analysis ...
Ranking The World’s Best Mobile Operators

Chapter 2
Performance Measurement 1 – MNO ARPU PPP

© 2009, Portio Research. Al...
Ranking The World’s Best Mobile Operators

Performance Measurement 1 – MNO
ARPU PPP
MNO ARPU (Average Revenue Per User) is...
Ranking The World’s Best Mobile Operators
Purchasing Power Parity – the normalising factor used in this index to compare M...
Ranking The World’s Best Mobile Operators
Table 4:

Rank

MNOs Worldwide Ranked 1 to 20 – MNO Monthly ARPU PPP (2008)

MNO...
Ranking The World’s Best Mobile Operators

Table 6:

MNOs Worldwide Ranked 51 to 170 – MNO Monthly ARPU PPP (2008)

Rank

...
Ranking The World’s Best Mobile Operators

Table 7:

MNOs Worldwide Ranked 171 to 204 – MNO Monthly ARPU PPP (2008)

Rank
...
Ranking The World’s Best Mobile Operators
MNO Strategies
Nextel Brazil
Ownership: NII Holdings Ltd.
Launched: 1997
st

Sub...
Ranking The World’s Best Mobile Operators
operator generates ARPU greatly above both the country’s average and that of its...
Ranking The World’s Best Mobile Operators
Focus on enterprise segment
Nextel has developed various enterprise solutions wh...
Ranking The World’s Best Mobile Operators
3 The UK
Ownership: Hutchison Whampoa Limited
Launched: 2003
st

Subscriber Base...
Ranking The World’s Best Mobile Operators
•
•
•

Leader in 3G market
Focus on higher valued postpaid subscribers
Innovativ...
Ranking The World’s Best Mobile Operators
Innovative approach to mobile broadband, content and new services
3 is known to ...
Ranking The World’s Best Mobile Operators
Rogers Canada
Ownership: Rogers Communications
Launched: 1985
st

Subscriber Bas...
Ranking The World’s Best Mobile Operators
Focus on postpaid subscribers
The operator has the highest percentage of postpai...
Ranking The World’s Best Mobile Operators
represented 16 percent of the network’s revenue, compared to 13 percent in 2007....
Ranking The World’s Best Mobile Operators

Chapter 3
Performance Measurement 2 – ARPU as a
Percentage of Disposable Income...
Ranking The World’s Best Mobile Operators

Performance Measurement 2 – ARPU as
a Percentage of Disposable Income
The reven...
Ranking The World’s Best Mobile Operators
The figure above indicates that there is a strong correlation between the dispos...
Ranking The World’s Best Mobile Operators
Table 8: MNOs Worldwide Ranked 1 to 20 – ARPU as a Percentage of Disposable Inco...
Ranking The World’s Best Mobile Operators
Table 10: MNOs Worldwide Ranked 51 to 170 – ARPU as a Percentage of Disposable I...
Ranking The World’s Best Mobile Operators
Table 11: MNOs Worldwide Ranked 171 to 204 – ARPU as a Percentage of Disposable ...
Ranking The World’s Best Mobile Operators
MNO Strategies
MTN Nigeria

Ownership: MTN Group (76.1 percent)
Launched: 2001
s...
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Ranking The World's Best MNOs. 2009. Portio Research Ltd
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An innovative look at the major performance metrics of hundreds of Mobile Network Operators worldwide, comparing their performance across a 'level playing field' once Purchasing Power parity (PPP) is used to level off differences in the value of regional and national economies.

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  1. 1. Ranking The World’s Best Mobile Operators © 2009, Portio Research. All Rights Reserved 1
  2. 2. Ranking The World’s Best Mobile Operators Portio Research Limited. Published June 2009 by Portio Research Limited © Copyright 2009. www.portioresearch.com info@portioresearch.com Disclaimer and Legal Notices Disclaimer Every care has been taken in the preparation of this study to ensure that the information contained herein is accurate, factual and correct to the best of our knowledge, at time of publishing. All opinions, suppositions, estimates and recommendations included in this document are solely the opinions of the authors unless otherwise stated. Portio Research Limited accepts no liability for any loss or damage or unforeseen consequential loss or damage arising from the use of the information contained within this document. The opinions, suppositions, estimates and recommendations within this document cannot be guaranteed, and readers use this information at their own risk. The information published in this document is subject to change without notice at any time, and Portio Research Limited accepts no liability or obligation to inform the reader of such changes. Portio Research Limited do not promote or endorse any specific companies or products, the views and opinions we express in this document are wholly our own assessments, and independent from any external interest or influence. Many terms and phrases and trade names used in this document are proprietary and Portio Research Limited recognises and acknowledges that all trademarks are copyright, belonging to their respective owners. Where possible, this document accords such terms and phrases and trade names to their respective owners. All Rights Reserved. No part of this document can be copied, shared, redistributed, transmitted, displayed in the public domain, stored or displayed on any internal or external company or private network or electronic retrieval system, nor reprinted, republished or reconstituted in any way without the express written permission of the publisher. Forwarding of this electronic document without the correct legal licence is theft. It’s unethical, immoral and against the law. If you have any questions about the legal licence conditions under which this document has been distributed, please contact Portio Research on info@portioresearch.com If you did not buy this document and a colleague or associate has sent it to you, do not assume you are legally entitled to read it, it is your responsibility to ensure you have the correct legal licence to read this document. 2 © 2009, Portio Research. All Rights Reserved
  3. 3. Ranking The World’s Best Mobile Operators Contents Introduction ............................................................................................................................12 Performance Measurement 1 – MNO ARPU PPP ................................................................18 Formula and Rationale....................................................................................................................... 18 Rankings ............................................................................................................................................ 19 MNO Strategies ................................................................................................................................. 23 Nextel Brazil .................................................................................................................................... 23 3 The UK ......................................................................................................................................... 26 Rogers Canada ............................................................................................................................... 29 Performance Measurement 2 – ARPU as a Percentage of Disposable Income...............33 Formula and Rationale....................................................................................................................... 33 Rankings ............................................................................................................................................ 34 MNO Strategies ................................................................................................................................. 38 MTN Nigeria .................................................................................................................................... 38 Zain Sudan ...................................................................................................................................... 41 Maroc Telecom Morocco ................................................................................................................. 43 Safaricom Kenya ............................................................................................................................. 45 Performance Measurement 3 – Revenue Growth of the MNO ...........................................49 Formula and Rationale....................................................................................................................... 49 Rankings ............................................................................................................................................ 51 MNO Strategies ................................................................................................................................. 55 life:) Ukraine .................................................................................................................................... 55 BITE Lithuania................................................................................................................................. 60 Oi Brazil........................................................................................................................................... 64 Performance Measurement 4 – MNO Profitability...............................................................69 EBITDA Margin .................................................................................................................................. 69 MNO Strategies ................................................................................................................................. 75 Globe Telecom The Philippines ...................................................................................................... 75 Djezzy Algeria ................................................................................................................................. 78 KPN The Netherlands ..................................................................................................................... 82 Additional Reference Material ............................................................................................................ 86 Average Profit Per User (APPU) ..................................................................................................... 86 Formula and Rationale .................................................................................................................... 86 Performance Measurement 5 – MNO Growth vs. Market Growth .....................................89 Formula and Rationale....................................................................................................................... 89 Rankings ............................................................................................................................................ 90 MNO Strategies ................................................................................................................................. 94 Wind Italy ........................................................................................................................................ 94 TDC Denmark ................................................................................................................................. 97 Vodafone Ireland ........................................................................................................................... 100 Performance Measurement 6 – Significance of the MNO ................................................104 Formula and Rationale..................................................................................................................... 104 Rankings .......................................................................................................................................... 105 MNO Strategies ............................................................................................................................... 109 du The UAE................................................................................................................................... 109 Movistar Venezuela ....................................................................................................................... 114 Mobily Saudi Arabia ...................................................................................................................... 118 Performance Measurement 7 – Successful Growth of Revenue from Data Services ...124 Formula and Rationale..................................................................................................................... 124 Rankings .......................................................................................................................................... 125 MNO Strategies ............................................................................................................................... 129 Smart Communications The Philippines........................................................................................ 129 Telkomsel Indonesia ..................................................................................................................... 133 NTT DOCOMO Japan ................................................................................................................... 138 Performance Measurement 8 – Measuring Subscriber Loyalty ......................................144 © 2009, Portio Research. All Rights Reserved 3
  4. 4. Ranking The World’s Best Mobile Operators Formula and Rationale..................................................................................................................... 144 Rankings .......................................................................................................................................... 145 MNO Strategies ............................................................................................................................... 149 KDDI Japan ................................................................................................................................... 149 SingTel Singapore ......................................................................................................................... 153 Chunghwa Telecom Taiwan .......................................................................................................... 158 Performance Measurement 9 – Postpaid Penetration Measure ......................................163 Formula and Rationale..................................................................................................................... 164 Rankings .......................................................................................................................................... 164 MNO Strategies ............................................................................................................................... 169 Telefonica Moviles Peru ................................................................................................................ 169 Comcel Colombia .......................................................................................................................... 172 Vodafone Egypt............................................................................................................................. 175 Performance Measurement 10 – Technology Measure ....................................................180 Formula and Rationale..................................................................................................................... 180 Rankings .......................................................................................................................................... 181 MNO Strategies ............................................................................................................................... 186 Vodacom DR Congo ..................................................................................................................... 186 MTN Sudan ................................................................................................................................... 189 Etisalat Misr................................................................................................................................... 192 Other Leading MNOs’ Strategies ........................................................................................197 China Mobile .................................................................................................................................... 198 AT&T The US .................................................................................................................................. 202 Summary and Conclusions .................................................................................................206 Traditional KPIs................................................................................................................................ 208 Ranking 1: Traditional Approach ...................................................................................................... 212 Ranking 2: Normalised Approach .................................................................................................... 217 Ranking 3: Blended Approach ......................................................................................................... 227 Notes covering a few anomalies, outliers and interesting observations ........................................... 231 Objective Analysis of Regional Performance in Three Core Areas of Success ............................... 234 Overall Ranking 1 – Best MNOs by region for size and growth..................................................... 236 Overall Ranking 2 – Best MNOs by region for extracting revenues from subscribers ................... 237 Overall Ranking 3 – Best MNOs by region for advancing non-voice mobile services ................... 238 Methodology .........................................................................................................................241 Appendices ...........................................................................................................................249 Glossary ........................................................................................................................................ 251 Portio Research Classifications ..................................................................................................... 262 Companies Mentioned in this Report ............................................................................................ 263 About the Authors.......................................................................................................................... 268 Also available from Portio Research Limited ................................................................................. 270 4 © 2009, Portio Research. All Rights Reserved
  5. 5. Ranking The World’s Best Mobile Operators List of Figures Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Figure 6: Figure 7: Figure 8: Figure 9: Figure 10: Figure 11: Figure 12: Figure 13: Figure 14: Figure 15: Figure 16: Figure 17: Figure 18: Figure 19: Figure 20: Figure 21: Figure 22: Figure 23: Figure 24: Figure 25: Figure 26: Figure 27: Figure 28: Figure 29: Figure 30: Figure 31: Figure 32: Figure 33: Figure 34: Figure 35: Figure 36: Figure 37: Figure 38: Figure 39: Figure 40: Figure 41: Figure 42: Figure 43: Figure 44: Figure 45: Figure 46: Figure 47: Figure 48: Figure 49: Figure 50: Figure 51: Performance Measurement Indices Used to Measure the Performance of MNOs Worldwide ......................................................................................................................... 12 Monthly ARPU vs. Monthly ARPU PPP – Worldwide Markets (In USD, 2008) ................. 18 Top 20 MNOs Worldwide – MNO Monthly ARPU PPP (2008) ......................................... 19 Top 3 MNOs Worldwide – MNO Monthly ARPU PPP (2008) ........................................... 22 MNOs’ Monthly ARPU and Monthly ARPU PPP – Brazil (In USD, 2008) ......................... 23 MNOs’ Postpaid Subscribers as a Percentage of Total Subscriber Base – Brazil (In Percent, End-2008)........................................................................................................... 24 MNOs’ Blended Monthly Churn – Brazil (In Percent, 2008) .............................................. 24 MNOs’ Monthly ARPU and Monthly ARPU PPP – The UK (In USD, 2008) ...................... 26 MNOs’ 3G Subscriber Base – The UK (In Million, End-2008)........................................... 27 MNOs’ Postpaid Subscribers as a Percentage of Total Subscriber Base – The UK (In Percent, End-2008)........................................................................................................... 27 MNOs’ Monthly Data ARPU – The UK (In USD, 2008) ..................................................... 28 MNOs’ Monthly ARPU and Monthly ARPU PPP – Canada (In USD, 2008) ..................... 29 MNOs’ Postpaid Subscribers as a Percentage of Total Subscriber Base – Canada (In Percent, End-2008)........................................................................................................... 30 MNOs’ Gross Postpaid Subscriber Additions – Canada (In Million, 2008)........................ 30 Data Revenue as a Percentage of ARPU – Rogers Canada (In Percent, 2008) .............. 31 Scatter Plot of Monthly ARPU vs. Monthly Disposable Income – Worldwide Markets (2008) ............................................................................................................................... 33 Top 20 MNOs Worldwide – ARPU as a Percentage of Disposable Income (2008) ........... 34 Top 3 MNOs Worldwide – ARPU as a Percentage of Disposable Income (2008) ............. 37 Subscriber Base and Penetration – Nigeria (2006-2008) .................................................. 38 Factors Hampering Quality of Service in Nigeria ............................................................... 39 Demographic Break-out – Sudan (End-2008) ................................................................... 41 Subscriber Base and Monthly ARPU – Morocco (2006-2008) .......................................... 43 Utilisation of 3.5G Networks by Maroc Telecom (June 2007- February 2008) .................. 44 MNOs’ Subscriber Base – Kenya (In Million, End-2008) ................................................... 45 Safaricom’s Strategies ...................................................................................................... 46 Safaricom’s Targeted Marketing Strategy ......................................................................... 46 Top 10 MNOs Worldwide – Total Revenue & Revenue Growth (2008)............................. 50 Top 20 MNOs Worldwide – Revenue Growth of the MNO (2008) ..................................... 51 Top 3 MNOs Worldwide – Revenue Growth of the MNO (2008) ....................................... 54 MNOs’ Market Share – Ukraine (In Percent, 2006-2008) .................................................. 55 MNOs’ Total Revenue – Ukraine (In USD Million, 2006-2008) .......................................... 56 life:)’s Success Strategies ................................................................................................. 56 life:)’s Innovative Products................................................................................................. 57 life:)’s Range of Services ................................................................................................... 58 MNOs’ Total Revenues – Lithuania (In USD Billion, 2007-2008) ...................................... 60 BITE’s Success Strategies ................................................................................................ 61 BITE’s Key Milestones (2003-2008) .................................................................................. 62 MNOs’ Subscriber Base – Brazil (In Million, End-2008) .................................................... 64 Key MNOs’s Total Revenues –Brazil (In USD Billion, 2006-2008) ................................... 65 MNOs’ Revenue Growth – Brazil (In Percent, 2007-2008) ................................................ 65 Oi’s Revenue Growth Strategies ....................................................................................... 66 Oi’s Subscriber Acquisition Strategies............................................................................... 66 Oi’s Services ..................................................................................................................... 67 Factors Affecting EBITDA Margin...................................................................................... 69 MNOs’ EBITDA Margin and Market Share (In Percent, 2008)........................................... 70 Top 20 MNOs Worldwide – MNO Profitability (2008) ........................................................ 71 Top 3 MNOs Worldwide – MNO Profitability (2008) .......................................................... 74 EBITDA Margin and Total Revenue – Globe Telecom (2006-2008).................................. 75 Globe Telecom’s Success Strategies ................................................................................ 76 Globe Telecom’s Service Innovations ............................................................................... 77 MNOs’ Subscriber Base – Algeria (In Million, End-2008) .................................................. 78 © 2009, Portio Research. All Rights Reserved 5
  6. 6. Ranking The World’s Best Mobile Operators Figure 52: Figure 53: Figure 54: Figure 55: Figure 56: Figure 57: Figure 58: Figure 59: Figure 60: Figure 61: Figure 62: Figure 63: Figure 64: Figure 65: Figure 66: Figure 67: Figure 68: Figure 69: Figure 70: Figure 71: Figure 72: Figure 73: Figure 74: Figure 75: Figure 76: Figure 77: Figure 78: Figure 79: Figure 80: Figure 81: Figure 82: Figure 83: Figure 84: Figure 85: Figure 86: Figure 87: Figure 88: Figure 89: Figure 90: Figure 91: Figure 92: Figure 93: Figure 94: Figure 95: Figure 96: Figure 97: Figure 98: Figure 99: Figure 100: Figure 101: Figure 102: Figure 103: 6 EBITDA Margin and Total Revenue – Djezzy Algeria (2006-2008) .................................. 79 MNOs’ Monthly ARPU – Algeria (In USD, 2008) ............................................................... 80 MNOs’ Postpaid Subscribers as a Percentage of Total Subscriber Base of the MNO – Algeria (In Percent, 2007 & 2008)..................................................................................... 80 EBITDA Margin and Total Revenue – KPN The Netherlands (2006-2008) ...................... 82 KPN’s Success Strategies ................................................................................................. 83 Market Share of MNOs – The Netherlands (2008) ............................................................ 83 KPN’s Segment Strategies ................................................................................................ 84 Top 10 MNOs Worldwide – Monthly APPU and Monthly ARPU (In USD, 2008) ............... 86 Top 10 Countries Worldwide – Y-o-Y Subscriber Growth (2007 to 2008) and Penetration (End-2008) ........................................................................................................................ 89 Top 20 MNOs Worldwide – MNO Growth vs. Market Growth (2008) ................................ 90 Top 3 MNOs Worldwide – MNO Growth vs. Market Growth (2008) .................................. 93 MNOs’ Market Share – Italy (In Percent, December 2006-December 2008)..................... 94 Wind’s Strategies .............................................................................................................. 95 TDC’s Success Strategies ................................................................................................. 97 Revenue by Business Segment – TDC (2008) .................................................................. 98 Vodafone Ireland’s Success Strategies ........................................................................... 100 MNOs’ Market Share - Ireland (2007 & 2008) ................................................................. 101 Top 10 MNOs Worldwide – Market Share (In Percent, End-2008) .................................. 104 Top 20 MNOs Worldwide – Significance of the MNO (2008) .......................................... 105 Top 3 MNOs Worldwide – Significance of the MNO (2008) ............................................ 108 Demographic Break-out – The UAE Worldwide (End-2008) ........................................... 110 du’s Key Success Factors Summarized Worldwide ........................................................ 110 du’s First-time Products in The UAE Market.................................................................... 111 du’s Strategic Marketing Initiatives .................................................................................. 112 MNOs’ Subscriber Base – Venezuela (In Million, End-2008) ......................................... 114 Movistar’s Success Strategies......................................................................................... 115 MNOs’ Market Share – Venezuela (2007 & 2008) .......................................................... 116 MNOs’ Market Share – Saudi Arabia (2007 & 2008) ....................................................... 119 Mobily’s Success Factors ................................................................................................ 120 Mobily’s First Time Services ............................................................................................ 121 Subscriber Base – Mobily (In Million, 2006-2008) ........................................................... 121 Voice Revenue as a Percentage of Service Revenue – Worldwide (In Percent, 20042013F) ............................................................................................................................ 124 Top 20 MNOs Worldwide – Data Revenue Measure (2008) ........................................... 125 Top 3 MNOs Worldwide – Data Revenue Measure (2008) ............................................. 128 MNOs’ Subscriber Base – The Philippines (In Million, End-2008) ................................... 129 Data Revenue Measure – Smart Communications (2006-2008) .................................... 130 SMS Volume – Smart Communications (In Billion, 2006-2008) ...................................... 131 SMS Revenue – Smart Communications (In USD Billion, 2006-2008)............................ 131 SMS Revenue as a Percentage of Data Revenue – Smart Communications (In Percent, 2006-2008) ..................................................................................................................... 132 Voice Tariff-per-Minute to per-message SMS Cost Ratio of Asian MNOs (April 2009) ... 132 MNOs’ Subscriber Base – Indonesia (In Million, End-2008)............................................ 133 Data Revenue Measure – Telkomsel Indonesia (2006-2008) ....................................... 134 SMS Revenue – Telkomsel (In USD Billion, 2007 & 2008) ............................................. 135 SMS Revenue as a Percentage of Data Revenue – Telkomsel (In Percent, 2007 & 2008)............................................................................................... 135 Telkomsel’s Initiatives in Mobile Content Market ............................................................. 136 MNOs’ Subscriber Base – Japan (In Million, End-2008) ................................................. 138 Data Revenue Measure – NTT DOCOMO Japan (2006-2008) ....................................... 139 FOMA and i-mode Subscribers – NTT DOCOMO (In Million, End-2008) ........................ 140 NTT DOCOMO’s Strategies ............................................................................................ 141 NTT DOCOMO’s Handset Series Launched in 2008 ...................................................... 142 Top 10 MNOs Worldwide – Monthly Churn Rate and EBITDA Margin (In Percent, 2008) ........................................................................................................... 144 Top 20 MNOs Worldwide – Measuring Subscriber Loyalty (2008) .................................. 145 © 2009, Portio Research. All Rights Reserved
  7. 7. Ranking The World’s Best Mobile Operators Figure 104: Top 3 MNOs Worldwide – Measuring Subscriber Loyalty (2008) ................................... 148 Figure 105: MNOs’ Subscriber Base – Japan (In Million, End-2008) ................................................. 149 Figure 106: Monthly Churn and Postpaid Subscribers as a Percentage of Total Subscriber Base – Japan (In Percent, 2008) ................................................................................................ 150 Figure 107: Monthly Churn and Postpaid Subscribers as a Percentage of Total Subscriber Base – KDDI (In Percent, Q1 2008 – Q4 2008) .......................................................................... 150 Figure 108: KDDI’s Total Customer Satisfaction Policy...................................................................... 151 Figure 109: KDDI’s Retention Measures ............................................................................................ 152 Figure 110: MNOs’ Subscriber Base – Singapore (In Million, End-2008) ........................................... 153 Figure 111: Monthly Churn and Postpaid Subscribers as a Percentage of Total Subscriber Base – Singapore (In Percent, 2008) .......................................................................................... 154 Figure 112: SingTel’s Subscriber Satisfaction and Retention Strategies............................................ 155 Figure 113: SingTel’s Postpaid Plans ................................................................................................. 155 Figure 114: SingTel’s Customised Services ....................................................................................... 156 Figure 115: MNOs’ Subscriber Base – Taiwan (In Million, End-2008)................................................ 158 Figure 116: Chunghwa Telecom’s Subscriber Satisfaction Strategies ............................................... 159 Figure 117: Monthly Churn and Postpaid Subscribers as a Percentage of Total Subscriber Base – Taiwan (In Percent, 2008) .............................................................................................. 159 Figure 118: Chunghwa Telecom’s Initiatives ...................................................................................... 160 Figure 119: Benefits of Postpaid Subscriptions for MNOs .................................................................. 163 Figure 120: Top 10 Mobile Markets Worldwide – Postpaid Subscribers and Mobile Penetration (In Percent, 2008) ................................................................................................................ 164 Figure 121: Top 20 MNOs Worldwide – Postpaid Penetration Measure (2008) ................................. 165 Figure 122: Top 3 MNOs Worldwide – Postpaid Penetration Measure (2008) ................................... 168 Figure 123: MNOs’ Subscriber Base – Peru (In Million, End-2008).................................................... 169 Figure 124: Telefonica’s Strategies .................................................................................................... 170 Figure 125: Postpaid Subscriber Base – Peru (In Million, End-2008)................................................. 170 Figure 126: MNOs’ Subscriber Base – Colombia (In Million, End-2008) ............................................ 172 Figure 127: Comcel’s Strategies ........................................................................................................ 173 Figure 128: Postpaid Subscriber Base – Colombia (In Million, 2006-2008) ....................................... 173 Figure 129: Vodafone Egypt’s Success Strategies............................................................................. 176 Figure 130: Postpaid Subscriber Base – Egypt (In Million, End-2008) ............................................... 176 Figure 131: Vodafone Egypt’s Product Portfolio ................................................................................. 177 Figure 132: Advantages of Technology Evolution .............................................................................. 180 Figure 133: Evaluation of an MNO based on Network Technology and Mobile Penetration .............. 181 Figure 134: Top 20 MNOs Worldwide – Technology Measure (2008)................................................ 182 Figure 135: Top 3 MNOs Worldwide – Technology Measure (2008).................................................. 185 Figure 136: Vodacom DR Congo’s Success Strategies ..................................................................... 186 Figure 137: MNOs’ Market Share – DR Congo (End-2008) ............................................................... 187 Figure 138: Capital Expenditure – Vodacom (In USD Million, 2003-2008) ......................................... 187 Figure 139: Vodacom’s Network Expansion in DR Congo ................................................................. 188 Figure 140: MTN Sudan’s Success Strategies ................................................................................... 189 Figure 141: Subscriber Base – MTN Sudan (In Million, 2006-2008) .................................................. 190 Figure 142: Capital Expenditure – MTN Sudan (In USD Million, 2006-2008) ..................................... 190 Figure 143: MTN Sudan Pay as You Talk – Option Plans .................................................................. 191 Figure 144: MNOs’ Subscriber Base – Egypt (In Million, End-2008) .................................................. 192 Figure 145: Network Deployment – Egypt .......................................................................................... 193 Figure 146: Market Share – Egypt (In Percent, December 2006 - December 2008) .......................... 193 Figure 147: Etisalat’s Strategies ......................................................................................................... 194 Figure 148: MNO Choice – Egypt (December 2007)* ....................................................................... 195 Figure 149: Monthly Churn – MobiNil (In Percent, Q1 2007 – Q4 2008) ............................................ 195 Figure 150: Top 5 MNOs Worldwide – Subscriber Base (In Million, End-2008) ................................. 198 Figure 151: China Mobile’s Success Strategies ................................................................................. 199 Figure 152: China Mobile’s Industry-specific Applications .................................................................. 200 Figure 153: Capital Expenditure – China Mobile (In USD Billion, 2008-2011F).................................. 201 Figure 154: Top 10 MNOs Worldwide – Monthly Average Profit Per User (In USD, 2008) ................ 202 Figure 155: AT&T’s Success Strategies ............................................................................................. 203 Figure 156: Top 20 MNOs Worldwide – Overall Ranking Using Traditional Approach (2008)........... 213 © 2009, Portio Research. All Rights Reserved 7
  8. 8. Ranking The World’s Best Mobile Operators Figure 157: Figure 158: Figure 159: Figure 160: Figure 161: Figure 162: Figure 163: Figure 164: Figure 165: Figure 166: Top 20 MNOs Worldwide – Overall Ranking Using Normalised Approach (2008) ......... 218 Top 20 MNOs Worldwide – Overall Ranking Using Blended Approach (2008) .............. 227 Regional Count of Top 10 Operators for Different Approaches ...................................... 230 Focus Areas of the Three Overall Rankings .................................................................... 235 Methodology for Calculating MNO Score for a Performance Measurement Index .......... 243 Methodology for Calculating Normalised Overall MNO Score ......................................... 244 Assignment of weights to different Performance Measurement Indices .......................... 245 Methodology for Calculating Traditional Overall MNO Score .......................................... 246 Methodology for Calculating Blended Overall MNO Score .............................................. 246 Focus Areas of the Overall Rankings and Constituting Performance Measurement Indices. ................................................................................................................................... 247 Figure 167: Methodology for Calculating Overall MNO Rankings – 1, 2 & 3 ...................................... 247 8 © 2009, Portio Research. All Rights Reserved
  9. 9. Ranking The World’s Best Mobile Operators List of Tables Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Table 13: Table 14: Table 15: Table 16: Table 17: Table 18: Table 19: Table 20: Table 21: Table 22: Table 23: Table 24: Table 25: Table 26: Table 27: Table 28: Table 29: Table 30: Table 31: Table 32: Table 33: Table 34: Table 35: Table 36: Table 37: Table 38: Table 39: Table 40: Table 41: Table 42: Table 43: Table 44: Table 45: Table 46: Table 47: Table 48: Table 49: Top 50 MNOs Worldwide – Total Revenue (In USD Billion, 2008) ................................... 13 Top 50 MNOs Worldwide – Subscriber Base (In Million, End-2008)................................. 14 Top 50 MNOs Worldwide – Monthly ARPU (In USD, 2008) ............................................. 15 MNOs Worldwide Ranked 1 to 20 – MNO Monthly ARPU PPP (2008) ............................ 20 MNOs Worldwide Ranked 21 to 50 – MNO Monthly ARPU PPP (2008) ......................... 20 MNOs Worldwide Ranked 51 to 170 – MNO Monthly ARPU PPP (2008) ........................ 21 MNOs Worldwide Ranked 171 to 204 – MNO Monthly ARPU PPP (2008) ...................... 22 MNOs Worldwide Ranked 1 to 20 – ARPU as a Percentage of Disposable Income (2008) ............................................................................................................................... 35 MNOs Worldwide Ranked 21 to 50 – ARPU as a Percentage of Disposable Income (2008) ............................................................................................................................... 35 MNOs Worldwide Ranked 51 to 170 – ARPU as a Percentage of Disposable Income (2008) ............................................................................................................................... 36 MNOs Worldwide Ranked 171 to 204 – ARPU as a Percentage of Disposable Income (2008) ............................................................................................................................... 37 MNOs Worldwide Ranked 1 to 20 – Revenue Growth of the MNO (2008) ....................... 51 MNOs Worldwide Ranked 21 to 50 – Revenue Growth of the MNO (2008) .................... 52 MNOs Worldwide Ranked 51 to 170 – Revenue Growth of the MNO (2008) ................... 53 MNOs Worldwide Ranked 171 to 204 – Revenue Growth of the MNO (2008) ................. 54 MNOs Worldwide Ranked 1 to 20 – MNO Profitability (2008) .......................................... 71 MNOs Worldwide Ranked 21 to 50 – MNO Profitability (2008) ....................................... 72 MNOs Worldwide Ranked 51 to 170 – MNO Profitability (2008) ...................................... 73 MNOs Worldwide Ranked 171 to 204 – MNO Profitability (2008)..................................... 74 MNOs Worldwide Ranked 1 to 20 – MNO Growth vs. Market Growth (2008) .................. 91 MNOs Worldwide Ranked 21 to 50 – MNO Growth vs. Market Growth (2008) ............... 91 MNOs Worldwide Ranked 51 to 170 – MNO Growth vs. Market Growth (2008).............. 92 MNOs Worldwide Ranked 171 to 204 – MNO Growth vs. Market Growth (2008)............ 93 MNOs Worldwide Ranked 1 to 20 – Significance of the MNO (2008) ............................. 106 MNOs Worldwide Ranked 21 to 50 – Significance of the MNO (2008) .......................... 106 MNOs Worldwide Ranked 51 to 170 – Significance of the MNO (2008) ........................ 107 MNOs Worldwide Ranked 171 to 204 – Significance of the MNO (2008) ...................... 108 MNOs Worldwide Ranked 1 to 20 – Data Revenue Measure (2008).............................. 126 MNOs Worldwide Ranked 21 to 50 – Data Revenue Measure (2008)........................... 126 MNOs Worldwide Ranked 51 to 170 – Data Revenue Measure (2008)......................... 127 MNOs Worldwide Ranked 171 to 204 – Data Revenue Measure (2008)....................... 128 MNOs Worldwide Ranked 1 to 20 – Measuring Subscriber Loyalty (2008) .................... 146 MNOs Worldwide Ranked 21 to 50 – Measuring Subscriber Loyalty (2008) ................. 146 MNOs Worldwide Ranked 51 to 170 – Measuring Subscriber Loyalty (2008) ............... 147 MNOs Worldwide Ranked 171 to 204 – Measuring Subscriber Loyalty (2008) ............. 148 MNOs Worldwide Ranked 1 to 20 – Postpaid Penetration Measure (2008) ................... 166 MNOs Worldwide Ranked 21 to 50 – Postpaid Penetration Measure (2008) ................ 166 MNOs Worldwide Ranked 51 to 170 – Postpaid Penetration Measure (2008) .............. 167 MNOs Worldwide Ranked 171 to 204 – Postpaid Penetration Measure (2008) ............ 168 MNOs Worldwide Ranked 1 to 20 – Technology Measure (2008) .................................. 183 MNOs Worldwide Ranked 21 to 50 – Technology Measure (2008) ............................... 183 MNOs Worldwide Ranked 51 to 170 – Technology Measure (2008) .............................. 184 MNOs Worldwide Ranked 171 to 204 – Technology Measure (2008) ............................ 185 Top 10 Operators by Subscribers – Regional (End-2008) .............................................. 208 Top 10 Operators by Total Revenues – Regional (2008) ............................................... 209 Top 10 Operators by Monthly ARPU – Regional (2008) ................................................. 210 Top 20 Operators by different KPIs - Worldwide (2008) ................................................. 211 MNOs Worldwide Ranked 1 to 20 – Overall Ranking Using Traditional Approach (2008) ... ................................................................................................................................... 213 MNOs Worldwide Ranked 21 to 50 – Overall Ranking Using Traditional Approach (2008) ................................................................................................................................... 214 © 2009, Portio Research. All Rights Reserved 9
  10. 10. Ranking The World’s Best Mobile Operators Table 50: Table 51: Table 52: Table 53: Table 54: Table 55: Table 56: Table 57: Table 58: Table 59: Table 60: Table 61: Table 62: Table 63: Table 64: Table 65: Table 66: 10 MNOs Worldwide Ranked 51 to 170 – Overall Ranking Using Traditional Approach (2008) ............................................................................................................................. 215 MNOs Worldwide Ranked 171 to 204 – Overall Ranking Using Traditional Approach (2008) ............................................................................................................................. 216 MNOs Worldwide Ranked 1 to 20 – Overall Ranking Using Normalised Approach (2008) . ................................................................................................................................... 219 MNOs Worldwide Ranked 21 to 50 – Overall Ranking Using Normalised Approach (2008) ............................................................................................................................. 219 MNOs Worldwide Ranked 51 to 170 – Overall Ranking Using Normalised Approach (2008) ............................................................................................................................. 220 MNOs Worldwide Ranked 171 to 204 – Overall Ranking Using Normalised Approach (2008) ............................................................................................................................. 221 Top 3 Operators Worldwide for Performance Measurements – Normalised Approach (2008) ............................................................................................................................. 222 Key Strategies Identified for Performance Measurements – Normalised Approach ....... 223 Regional Mix of MNOs in Top 20 List for Each Performance Measurement – Normalised Approach (2008) ............................................................................................................. 225 MNOs Worldwide Ranked 1 to 20 – Overall Ranking Using Blended Approach (2008) 228 MNOs Worldwide Ranked 21 to 50 – Overall Ranking Using Blended Approach (2008) ... ................................................................................................................................... 228 MNOs Worldwide Ranked 51 to 170 – Overall Ranking Using Blended Approach (2008) . ................................................................................................................................... 229 MNOs Worldwide Ranked 171 to 204 – Overall Ranking Using Blended Approach (2008) ................................................................................................................................... 230 Top 10 Regional Operators by Overall Ranking 1 (OR1)................................................ 236 Top 10 Regional Operators by Overall Ranking 2 (OR2)................................................ 237 Top 10 Regional Operators by Overall Ranking 3 (OR3)................................................ 238 Top 20 Worldwide Operators by Different Overall Rankings .......................................... 239 © 2009, Portio Research. All Rights Reserved
  11. 11. Ranking The World’s Best Mobile Operators Chapter 1 Introduction © 2009, Portio Research. All Rights Reserved 11
  12. 12. Ranking The World’s Best Mobile Operators Introduction Around the world, the market conditions that mobile network operators (MNOs) operate in vary considerably depending on different economic and developmental factors. Therefore, key performance indicators (KPIs) reported by MNOs cannot simply be taken at face value as a means for evaluating their performance or comparing their successes against those of other MNOs in different markets. A level playing field is required to judge the performance of MNOs through the use of suitable performance measurement indices. This study involves evaluating the performance of MNOs using ten all-new performance measurement indices (PMIs). These are shown in the figure below. Figure 1: Performance Measurement Indices Used to Measure the Performance of MNOs Worldwide Significance of the MNO Measuring Subscriber Loyalty Postpaid Penetration Measure MNO Growth vs. Market Growth MNO Profitability MNO Ranking Data Revenue Measure Technology Measure MNO ARPU PPP Revenue Growth of the MNO ARPU as a Percentage of Disposable Income Source: Portio Research Ltd. The rationale behind the selection of these PMIs has been explained later in the report. These PMIs cover a wide range of performance indicators and include normalising factors such as PPP (Purchasing Power Parity), GDP (Gross Domestic Product) growth, population growth, market penetration, number of years of operation, technology employed, etc. MNOs worldwide have been ranked on these ten performance measurement indices and an overall ranking of 204 major mobile network operators worldwide has been calculated from these results. This study also includes a brief analysis of the strategies adopted by high-ranking MNOs after each individual performance measurement chapter. Standard KPIs In this report, we have taken a different approach and normalised each performance measurement index to create a level playing field for MNOs. By doing this we eliminate the undue advantage gained by certain MNOs because of varying market environments. However, industry practice is to evaluate operators on the basis of the following three KPIs: 12 © 2009, Portio Research. All Rights Reserved We have taken a different approach and normalised each performance measurement index to create a level playing field for MNOs.
  13. 13. Ranking The World’s Best Mobile Operators • Total Revenues Subscriber Base ARPU • • Total Revenues: The revenue generated by an operator gives an indication of the success of the business model deployed to drive revenues. Total revenues have two components: service revenues and equipment (or handset) revenues. Mobile service revenue is further divided into two segments: voice services and data services. In emerging markets, an MNO focuses on voice services; whereas in developed markets, the focus is on complementing voice services with a range of value added voice and data services. Handset sales – as a source of revenue generation – have more relevance for CDMA-based operators and for MNOs providing handsets at subsidised costs to push the uptake for new services. Operators innovate with these products and service offerings to increase their revenues. The table below shows the 50 MNOs worldwide with the highest total revenue. Table 1: Top 50 MNOs Worldwide – Total Revenue (In USD Billion, 2008) MNO Total Revenue (In USD Billion) Rank MNO Total Revenue (In USD Billion) 1 China Mobile 57.5 2 AT&T The US 49.3 26 TIM Brasil 7.7 27 Bouygues France 7.6 3 Verizon The US 4 NTT DOCOMO Japan 49.3 28 VimpelCom Russia 7.4 43.9 29 MegaFon Russia 7.1 5 Sprint The US 30.4 30 Turkcell Turkey 7.0 6 KDDI Japan 27.2 31 Bharti Airtel India 6.6 7 T-Mobile The US 22.0 32 Claro Brazil 6.4 8 Orange France 15.8 33 Rogers Canada 6.0 9 SoftBank Japan 15.2 34 T-Mobile The UK 6.0 10 Movistar Spain 14.2 35 Vodacom South Africa 5.9 11 Telecom Italia 14.1 36 Telstra Australia 5.7 12 SFR France 13.6 37 Wind Italy 5.6 13 Telcel Mexico 12.3 38 O2 Germany 5.3 14 T-Mobile Germany 11.4 39 Orange Spain 5.2 15 Vodafone Germany 10.9 40 E-Plus Germany 4.7 16 SK Telecom South Korea 10.8 41 KPN The Netherlands 4.6 17 O2 The UK 10.4 42 LG Telecom South Korea 4.5 18 Vodafone Spain 10.3 43 Telus Mobility Canada 4.4 19 Vodafone The UK 10.0 44 4.2 20 China Unicom 10.0 45 21 Vodafone Italy 9.1 46 Bell Mobility Canada Reliance Communication India Movistar Venezuela 22 Vivo Brazil 8.8 47 Optus Australia 4.1 23 Orange The UK 8.8 48 MTN South Africa 4.0 24 MTS Russia 8.0 49 Telkomsel Indonesia 4.0 25 KTF South Korea 7.8 50 Orange Poland 3.8 Rank Limitations Total revenue helps visualise the scale of an MNO’s operations. However, it fails to indicate how successful an operator has been in growing its total revenues. It also fails to take into consideration the state of GDP growth of the country; as higher GDP growth provides more chances for an operator to grow its revenues. Market conditions, such as mobile penetration, also need to be considered to evaluate an operator’s performance in the © 2009, Portio Research. All Rights Reserved 13 4.2 4.1
  14. 14. Ranking The World’s Best Mobile Operators market, as emerging markets generally yield low revenue per user compared to developed markets. Therefore, comparing MNOs on the basis of total revenues generated – without considering the market conditions of their country of operation – might not be an effective way of evaluating the operators’ efforts at increasing their revenues. Subscriber Base: The size of an MNO’s subscriber base highlights the popularity and perception of its brand in the minds of users in the market, and illustrates the extent of its hold over and strength within the local wireless market. The rate of subscriber growth also informs us whether an operator is gaining or losing popularity in the market. The table below highlights the 50 MNOs worldwide that have developed the largest subscriber bases. Table 2: Top 50 MNOs Worldwide – Subscriber Base (In Million, End-2008) Rank MNO Subscribers (In Million) Rank MNO Subscribers (In Million) 1 China Mobile 457.3 26 KDDI Japan 30.6 2 China Unicom 179.0 27 TCI Iran 29.8 3 Bharti Airtel India 85.7 28 AIS Thailand 27.7 4 AT&T The US 77.0 29 Comcel Colombia 27.4 5 Verizon The US 72.1 30 Vodacom South Africa 26.5 6 Telkomsel Indonesia 64.7 31 Orange France 26.4 7 63.4 32 Excelcomindo Indonesia 26.0 61.3 33 Globe The Philippines 24.7 9 MTS Russia Reliance Communication India Vodafone India 60.9 34 Oi Brazil 24.4 10 Telcel Mexico 56.4 35 Movistar Spain 23.6 11 NTT DOCOMO Japan 54.2 36 Kyivstar Ukraine 23.5 12 Sprint The US 49.3 37 Vodafone Italy 23.1 13 VimpelCom Russia 46.1 38 SK Telecom South Korea 23.0 14 Vivo Brazil 45.0 39 21.4 15 MegaFon Russia 43.6 40 16 T-Mobile Germany 39.1 41 MTN Nigeria GrameenPhone Bangladesh MobiNil Egypt 17 Claro Brazil 38.7 42 SoftBank Japan 20.0 18 Turkcell Turkey 37.0 43 O2 The UK 19.5 19 TIM Brasil 36.4 44 Telenor Pakistan 19.4 20 Vodafone Germany 36.2 45 SFR France 19.4 21 Smart The Philippines 35.6 46 Vodafone The UK 19.2 22 Telecom Italia 34.8 47 DTAC Thailand 18.7 23 Idea Cellular India 34.2 48 Mobily Saudi Arabia 18.2 24 T-Mobile The US 32.8 49 MTS Ukraine 18.1 25 Mobilink Pakistan 31.6 50 E-Plus Germany 17.8 8 Limitations Although subscriber base is an industry standard used to evaluate an MNO, we believe it does not present a fair picture of efforts made by an operator in a particular market. We intend to support this argument by highlighting the huge dependence that subscriber base has on the population of a country. For instance, the top two operators in the above table are from China - the country with the highest population. The fact that two operators with the highest subscriber base are from a country with the highest population cannot be mere coincidence. This means that an operator could have a large subscriber base even without doing anything extraordinary in the market. 14 © 2009, Portio Research. All Rights Reserved 21.0 20.1
  15. 15. Ranking The World’s Best Mobile Operators ARPU: The ARPU (Average Revenue Per User) achieved by an operator reflects the popularity of the services it offers. This KPI can be used to judge the acceptance level of an operator’s offerings among its subscribers. High ARPU levels suggest that the operator has been successful in penetrating its services with innovative and user friendly features. The 1 table below shows the 50 MNOs worldwide with the highest ARPU. Table 3: Top 50 MNOs Worldwide – Monthly ARPU (In USD, 2008) Rank MNO Monthly ARPU (In USD) Rank MNO Monthly ARPU (In USD) 1 3 The UK 74.2 26 Orange France 50.5 2 Bouygues France 63.9 27 Swisscom Switzerland 50.2 3 Vodafone Ireland 63.7 28 T-Mobile The US 50.0 4 O2 Ireland 63.6 29 Mobistar Belgium 47.6 5 Orange Switzerland 61.5 30 Vodafone Spain 47.5 6 Rogers Canada 60.5 31 TDC Denmark 47.0 7 Orange Austria 60.5 32 Orange The UK 46.9 8 Netcom Norway 59.4 33 46.7 9 Telus Mobility Canada 59.2 34 10 3 Austria 58.5 35 Vodafone Australia Partner Communications (Orange) Israel Movistar Spain 11 Meteor Ireland 58.0 36 O2 The UK 44.1 12 Nextel Brazil 58.0 37 KPN The Netherlands 43.2 13 KDDI Japan 57.4 38 Telstra Australia 43.1 14 Telenor Norway 57.2 39 Telenor Sweden 42.7 15 NTT DOCOMO Japan 57.0 40 Sonofon Denmark 42.0 16 55.8 41 Cellcom Israel 41.7 55.6 42 Mobilkom Austria 41.6 18 Sunrise Switzerland Proximus (Belgacom) Belgium SFR France 54.7 43 Nextel Argentina 41.0 19 Etisalat The UAE 54.3 44 SoftBank Japan 40.6 20 53.7 45 3 Italia 40.1 52.8 46 SK Telecom South Korea 40.0 22 Sprint The US Vodafone The Netherlands Telia Denmark 52.1 47 Vodafone The UK 39.7 23 Verizon The US 51.6 48 Elisa Finland 38.8 24 Bell Mobility Canada 51.3 49 Optus Australia 38.5 25 AT&T The US 50.6 50 T-Mobile The UK 38.3 17 21 Limitations Like subscriber base, ARPU too is subject to various local conditions, creating a favourable bias towards some MNOs. In a particular market, ARPU is directly linked to the disposable income of users. This explains why most of the operators in the above table are from Europe and North America, wherein operators can easily generate high ARPU from their higherearning subscribers. However, if an MNO has been successful in generating comparable ARPU in low income markets, such as those in Africa, it deserves extra credit for this. Apart from disposable income, ARPU worldwide varies according to the PPP (Purchasing Power Parity) of a country. ARPU is reported in USD after conversion from the local currency; however, this conversion does not take PPP into consideration, which gives an edge to operators in those countries whose non-PPP exchange rates are high. 1 Please note: Unless otherwise stated, ARPU stands for average revenue per user per month. © 2009, Portio Research. All Rights Reserved 15 46.7 44.7
  16. 16. Ranking The World’s Best Mobile Operators The key features of this report include the following: • A comparative analysis of the performance of 204 MNOs worldwide using ten allnew performance measurements. • A brief description of why each performance measurement index has been used to evaluate the MNOs. • An overview of the strategies employed by 33 MNOs who ranked highly across different performance measurement indices. • An overall ranking of all 204 MNOs assessed in this report, calculated on the basis of their results across the ten performance measurement indices. Please note: From an initial assessment of 700-plus MNOs, this complex report has involved extensive data collection for 204 mobile network operators worldwide. Obtaining data for over 200 operators is an understandably lengthy process, and during our collection window in Q1 2009 the latest complete set of available data was for full year end-2008. For this reason, MNOs in this report are ranked on their full year 2008 performance, not 2009. 16 © 2009, Portio Research. All Rights Reserved
  17. 17. Ranking The World’s Best Mobile Operators Chapter 2 Performance Measurement 1 – MNO ARPU PPP © 2009, Portio Research. All Rights Reserved 17
  18. 18. Ranking The World’s Best Mobile Operators Performance Measurement 1 – MNO ARPU PPP MNO ARPU (Average Revenue Per User) is an important measure of an operator’s performance and its ability to tap the market potential. Operators worldwide have focused on extending the utility of mobile services to increase mobile usage per subscriber and thereby increase ARPU. However, an operator’s efforts are not truly reflected through ARPU values in terms of USD. These values do not take into account the purchasing power of subscribers in different countries, and therefore an observer might overlook the different levels of effort required for pushing the same value of mobile products and services in different countries. The figure below compares the ARPU and ARPU PPP (Purchasing Power Parity) for some of the markets during 2008. 60 50 40 30 20 10 Monthly ARPU Turkey The US The UK Russia South Africa Country Japan India Egypt China Canada Brazil 0 Australia Monthly ARPU and Monthly ARPU PPP (In USD) Figure 2: Monthly ARPU vs. Monthly ARPU PPP – Worldwide Markets (In USD, 2008) Monthly ARPU PPP Source: Portio Research Ltd. The figure shows that markets such as Brazil, Egypt and South Africa – despite having low ARPU compared to developed markets in Western Europe and North America – have ARPU PPP in the ‘above USD 25’ bracket. Therefore, the efforts of MNOs operating in these countries are commendable. As a result, we need to normalise the ARPU values with PPP factor to provide a just picture of an operator’s performance at promoting its services and driving revenues, compared to operators in other markets. Formula and Rationale The formula used for the calculation of this performance measurement is given below: Value = MNO ARPU (In USD) * Purchasing Power Parity Factor for the Country 18 © 2009, Portio Research. All Rights Reserved Brazil, Egypt and South Africa have ARPU PPP in the ‘above USD 25’ bracket.
  19. 19. Ranking The World’s Best Mobile Operators Purchasing Power Parity – the normalising factor used in this index to compare MNOs worldwide – when multiplied with real ARPU, scales the ARPU values for MNOs depending on the PPP of the market of operation. An operator might get ahead of the competition using a variety of different approaches, such as a focus on pushing data services, attracting postpaid subscribers, subsidising handsets to enable Value-added service (VAS) uptake, targeting the enterprise segment, effecting network upgrades to create new opportunities of revenue generation. Regardless of whether an MNO is operating in a developed or an emerging market, the operators ranking high in this performance measurement index are the ones who have innovated with their offerings to suit the market requirements. As such there is great value in looking at their strategies. Rankings The figure below shows the Top 20 MNOs based on this performance measurement index. Figure 3: Top 20 MNOs Worldwide – MNO Monthly ARPU PPP (2008) 2 Rank 1 to 10 Rank 11 to 20 1 Bell Mobility Canada, 7.3 Verizon The US, 7.3 MTN Syria, 7.4 Starhub Singapore, 7.4 Sprint The US, 7.4 3Austria, 7.4 Telefonica Slovakia, 7.5 Bouygues France, 7.5 Orange Austria, 7.5 SingTel Singapore, 7.5 Orange Slovakia, 7.7 Partner Communications Israel, 7.6 2 Telus Mobility Canada, 7.7 3 SK Telecom South Korea, 7.7 4 Vodafone Czech Republic, 7.7 5 Rogers Canada, 7.8 Score 6 3The UK, 7.9 7 Nextel Peru, 8.1 8 Nextel Argentina, 9.5 9 Nextel Brazil, 10.0 10 0 Operator Source: Portio Research Ltd. The rankings of MNOs based on this performance measurement index are given below. 2 Please note: The scores were calculated to four decimal places with each MNO securing a distinct value. Due to rounding off to one decimal place, a few MNOs appear to secure the same score. For a full and detailed explanation of our calculations in this report please see the Methodology section. © 2009, Portio Research. All Rights Reserved 19
  20. 20. Ranking The World’s Best Mobile Operators Table 4: Rank MNOs Worldwide Ranked 1 to 20 – MNO Monthly ARPU PPP (2008) MNO Score Rank MNO Score 1 Nextel Brazil 10.00 11 SingTel Singapore 7.53 2 Nextel Argentina 9.48 12 Orange Austria 7.51 3 Nextel Peru 8.08 13 Bouygues France 7.51 4 3 The UK 7.89 14 Telefonica Slovakia 7.46 5 Rogers Canada 7.77 15 3 Austria 7.42 6 Vodafone Czech Republic 7.74 16 Sprint The US 7.42 7 SK Telecom South Korea 7.72 17 Starhub Singapore 7.38 8 Telus Mobility Canada 7.70 18 MTN Syria 7.37 9 Orange Slovakia Partner Communications Israel 7.67 19 Verizon The US 7.31 7.55 20 Bell Mobility Canada 7.29 10 Table 5: MNOs Worldwide Ranked 21 to 50 – MNO Monthly ARPU PPP (2008) Rank Score Rank MNO Score 21 O2 Czech Republic 7.26 36 Vodafone The Netherlands 7.07 22 AT&T The US 7.26 37 Movistar Spain 7.04 23 T-Mobile Slovakia 7.25 38 M1 Singapore 7.03 24 Cellcom Israel 7.24 39 Promonte Montenegro 7.01 25 T-Mobile The US 7.23 40 Meteor Ireland 6.99 26 Vodafone Ireland 7.22 41 Movistar Venezuela 6.97 27 O2 Ireland 7.22 42 Tele2 Croatia 6.94 28 Proximus Belgium 7.20 43 KTF South Korea 6.94 29 Vodafone Spain 7.19 44 Orange Switzerland 6.92 30 T-Mobile Czech Republic 7.17 45 Vodafone Australia 6.92 31 KDDI Japan 7.17 46 Pelephone Israel 6.91 32 NTT DOCOMO Japan 7.15 47 Orange France 6.91 33 LG Telecom South Korea 7.13 48 Netcom Norway 6.88 34 Hutch Thailand 7.12 49 Mobistar Belgium 6.83 35 20 MNO SFR France 7.10 50 T-Mobile Croatia 6.82 © 2009, Portio Research. All Rights Reserved
  21. 21. Ranking The World’s Best Mobile Operators Table 6: MNOs Worldwide Ranked 51 to 170 – MNO Monthly ARPU PPP (2008) Rank MNO Rank MNO Rank MNO 51 Cosmote Greece 91 Vodafone Portugal 131 T-Mobile Montenegro 52 Telenor Norway 92 Telenor Sweden 132 Vodafone Italy 53 Vodafone Hungary 93 Asiacell Iraq 133 Globacom Nigeria 54 Telstra Australia 94 Zain Iraq 134 China Mobile 55 Taiwan Mobile 95 Vodafone The UK 135 Vodacom South Africa 56 SmarTone Hong Kong 96 Vodafone New Zealand 136 Sibir Telecom Russia 57 FeT Taiwan 97 137 Tele2 Lithuania 58 Vodafone Egypt 98 138 BITE Lithuania 59 Sunrise Switzerland 99 TIM Brasil CSL New World Mobility Hong Kong PCCW Mobile Hong Kong 139 Omnitel Lithuania 60 Orange The UK 100 Movilnet Venezuela 140 Telecom Italia 61 Orange Spain 101 TDC Denmark 141 MTS Belarus 62 Pannon Hungary 102 T-Mobile The Netherlands 142 HTIL Hong Kong 63 Digitel Venezuela 103 Mobily Saudi Arabia 143 Kyivstar Ukraine 64 DiGi Malaysia 104 VIPnet Croatia 144 Wind Italy 65 T-Mobile Hungary 105 T-Mobile The UK 145 3 Sweden 66 Maxis Malaysia 106 Tunisiana Tunisia 146 Claro Brazil 67 VIP Serbia 107 Tunicell Tunisia 147 Iusacell Mexico 68 Telenor Serbia 108 MegaFon Russia 148 Celtel DR Congo 69 mt:s Serbia 109 Wind Hellas Greece 149 Telcel Mexico 70 Celcom Malaysia 110 VimpelCom Russia 150 MTS Russia 71 KPN The Netherlands 111 Elisa Finland 151 DTAC Thailand 72 Mobiltel Bulgaria 112 MTN South Africa 152 Globul Bulgaria 73 Mobilkom Austria 113 Polkomtel Poland 153 Claro Argentina 74 TCI Iran 114 Entel PCS Chile 154 Bharti Airtel India 75 Etisalat The UAE 115 Telia Sonera Finland 155 Beeline Ukraine 76 Zain Jordan 116 Vivatel Bulgaria 156 Maroc Telecom Morocco 77 O2 The UK 117 MobiNil Egypt 157 Telia Sonera Sweden 78 Zain Sudan 118 Vodafone Romania 158 O2 Germany 79 Chunghwa Taiwan 119 159 MTS Ukraine 80 Telia Denmark 120 160 Claro Chile 81 Orange Poland 121 Movistar Chile Telecom Personal Argentina TMN Portugal 161 Turkcell Turkey 82 3 Italia 122 MTN Iran 162 Vodafone India 83 Vodafone Greece 123 Cell C South Africa 163 Base Belgium 84 Optus Australia 124 Velcom Belarus 164 Vodafone Germany 85 Swisscom Switzerland 125 Sonofon Denmark 165 Movistar Colombia 86 MTN Nigeria 126 DNA Finland 166 Oi Brazil 87 Etisalat Misr Egypt 127 Optimus Portugal 167 Tigo DR Congo 88 T-Mobile Austria 128 Movistar Argentina 168 AIS Thailand 89 PTC Poland 129 Vivo Brazil 169 Zain Nigeria 90 SoftBank Japan 130 Brasil Telecom 170 Tigo Colombia © 2009, Portio Research. All Rights Reserved 21
  22. 22. Ranking The World’s Best Mobile Operators Table 7: MNOs Worldwide Ranked 171 to 204 – MNO Monthly ARPU PPP (2008) Rank MNO Rank MNO Rank MNO 171 Safaricom Kenya 183 195 MTN Afghanistan 172 E-Plus Germany 184 196 Globe The Philippines 173 T-Mobile Germany 185 Movistar Mexico Reliance Communication India Claro Peru 197 life:) Ukraine 174 Comcel Colombia 186 Djezzy Algeria 198 175 Tele2 Sweden 187 Telkomsel Indonesia 199 176 188 Vodafone Turkey 200 189 MTN Sudan 201 Mobilink Pakistan 178 Telefonica Peru Telecom Mobile New Zealand Idea Cellular India Nedjma Algeria GrameenPhone Bangladesh Telenor Pakistan 190 Zain Kenya 202 True Move Thailand 179 Avea Turkey 191 China Unicom 203 Excelcomindo Indonesia 180 du The UAE 192 Meditel Morocco 204 Banglalink Bangladesh 181 Tele2 Russia 193 Smart The Philippines 182 Vodacom DR Congo 194 Sun The Philippines 177 The figure below shows the Top 3 MNOs judged on this performance measurement index. Figure 4: Top 3 MNOs Worldwide – MNO Monthly ARPU PPP (2008) Nextel Brazil 1 Nextel Argentina 2 3 Nextel Peru Source: Portio Research Ltd. 22 © 2009, Portio Research. All Rights Reserved
  23. 23. Ranking The World’s Best Mobile Operators MNO Strategies Nextel Brazil Ownership: NII Holdings Ltd. Launched: 1997 st Subscriber Base: 1.8 million (31 December 2008) 3 ARPU: USD 58.0 (Monthly, 2008) ARPU PPP: USD 103.6 (Monthly, 2008) st Market Share: 1.2 percent (31 December 2008) st Brazil Mobile Penetration: 76.7 percent (31 December 2008) Technology: iDen Market Environment – Brazil: • The largest market in the Latin American region • Dominated by the big four – Vivo, Claro, TIM and Oi • Predominantly a prepaid market with nearly 81.4 percent of total mobile subscribers in the prepaid segment by end-2008 • 3.5G is operational in the market • Mobile number portability already introduced The figure below shows the ARPU and ARPU PPP of MNOs in Brazil. Figure 5: MNOs’ Monthly ARPU and Monthly ARPU PPP – Brazil (In USD, 2008) Monthly ARPU and Monthly ARPU PPP (In USD) 120 103.6 100 80 58.0 60 40 20 14.2 25.4 29.1 16.3 33.4 29.0 18.7 16.2 12.0 21.5 0 Claro Vivo Brasil Telecom Nextel TIM Oi Operator Monthly ARPU Monthly ARPU PPP Source: Portio Research Ltd. Nextel’s Strategies Nextel Brazil is headquartered in Sao Paulo and offers its services in all the major business centres of the country including Rio de Janeiro, Sao Paulo, Belo Horizonte and Brasilia. It is the only Brazilian MNO to operate through iDen technology (developed by Motorola). The 3 Please note: From an initial assessment of 700-plus MNOs, this complex report has involved extensive data collection for 204 mobile network operators worldwide. Obtaining data for over 200 operators is an understandably lengthy process, and during our collection window in quarter one 2009 the latest complete set of available data was for full year end-2008. For this reason, MNOs in this report are ranked on their 2008 performance, not 2009. © 2009, Portio Research. All Rights Reserved 23
  24. 24. Ranking The World’s Best Mobile Operators operator generates ARPU greatly above both the country’s average and that of its counterparts. This trend could be attributed to the following strategies: • Attract a high proportion of postpaid subscribers • Attract and retain high value subscribers • Focus on the enterprise segment • Offer high value products Attract a high proportion of postpaid subscribers Brazil is predominantly a prepaid market where most of the operators have nearly 80 percent prepaid subscribers. However, Nextel is the exception with nearly a full quota of postpaid subscribers. This unconventional approach in the Brazilian market has helped the operator to generate higher ARPU compared to the country’s other MNOs. Postpaid Subscribers as a Percentage of Total Subscriber Base (In Percent) Figure 6: MNOs’ Postpaid Subscribers as a Percentage of Total Subscriber Base – Brazil (In Percent, End-2008) 99.0 100 80 60 40 19.0 20.2 18.6 15.6 17.9 Vivo Claro TIM Oi Brasil Telecom 20 0 Nextel Operator Source: Portio Research Ltd. Attract and retain high value subscribers Nextel has further enhanced its services and products to attract new users and retain its existing high value subscribers, which in turn helped the operator to generate more revenues and higher ARPU with prolonged contracts. Figure 7: MNOs’ Blended Monthly Churn – Brazil (In Percent, 2008) Blended Monthly Churn (In Percent) 7 6.1 6 5 4 3 2.6 2.7 2 1.3 1 0 Vivo Claro Brasil Telecom Nextel Operator Source: Portio Research Ltd. 24 © 2009, Portio Research. All Rights Reserved
  25. 25. Ranking The World’s Best Mobile Operators Focus on enterprise segment Nextel has developed various enterprise solutions which have helped enterprises to improve their productivity. The operator also develops customised wireless business solutions. Furthermore, it has built a superior customer support team to assist these businesses in implementing its solutions and managing these applications. Recently, it introduced the BlackBerry Curve 8350i Smartphone in to the local market. The device, combined with the operator’s Push-to-Talk service, makes it ideal for businesses in the country. Offer innovative services and high value products The operator offers Motorola and BlackBerry handsets to its users, which include both enterprise and non-enterprise subscribers, and these devices tend to be more expensive than handsets offered by Nextel’s competitors. However, it also offers several value added services on these handsets enabling an enriched service experience for subscribers. One such solution developed by the operator is Nextel Direct Connect, a long range walkie-talkie service which initiates communication at the press of a button. It empowers the users to set up an instant conference which speeds up communication compared to other normal calls, and it enables the users to achieve efficiency. The table below highlights the importance of factors which enabled the operator to generate high ARPU. Factors Identified Nextel Brazil Focus on postpaid subscribers Focus on enterprise segment Retention of high valued subscribers Innovative services © 2009, Portio Research. All Rights Reserved 25 Nextel has built a superior customer support team to assist businesses in implementing and managing enterprise solutions.
  26. 26. Ranking The World’s Best Mobile Operators 3 The UK Ownership: Hutchison Whampoa Limited Launched: 2003 st Subscriber Base: 4.8 million (31 December 2008) ARPU: USD 74.2 (Monthly, 2008) ARPU PPP: USD 62.8 (Monthly, 2008) st Market Share: 6.4 percent (31 December 2008) st The UK Mobile Penetration: 125.5 percent (31 December 2008) Technology: WCDMA Market Environment – The UK: • One of the largest mobile markets in Europe with nearly 76.4 million subscribers at end-2008 • The UK is a highly competitive wireless market and is approaching saturation • Market is dominated by four big players namely – O2, Vodafone, T-Mobile and Orange • World’s most successful MVNO, Virgin Mobile is based in The UK • 3G network launched by all five MNOs • Competition has led to lower voice and data plan prices and the promotion of bundled packages The figure below shows the ARPU and ARPU PPP of MNOs in The UK. Figure 8: MNOs’ Monthly ARPU and Monthly ARPU PPP – The UK (In USD, 2008) 74.2 Monthly ARPU and Monthly ARPU PPP (In USD) 80 62.8 70 60 50 44.1 46.9 37.3 39.7 40 38.3 39.7 32.4 33.6 30 20 10 0 O2 Orange T-Mobile 3 Vodafone Operator Monthly ARPU Monthly ARPU PPP Source: Portio Research Ltd. 3’s Strategies 3 was the first operator to launch 3G networks in the UK. The company bought the largest 3G licenses reserved for any new entrant in the UK and started its operations in March 2003. Since then it has offered several innovative and interesting services to its subscribers over its high speed networks. The operator generates the highest ARPU among all MNOs in the country; this feat can be attributed to the following reasons: 26 © 2009, Portio Research. All Rights Reserved
  27. 27. Ranking The World’s Best Mobile Operators • • • Leader in 3G market Focus on higher valued postpaid subscribers Innovative approach to mobile broadband, content and new services Leader in 3G market The company pioneered 3G services in the UK. It has endeavoured to offer better user experiences to its subscribers in terms of data services use over its high speed networks, such as 3G and HSDPA. The MNO has also collaborated with other operators to expand its 3G network coverage. By end-2008 it had nearly 4.8 million 3G subscribers - the second highest in the country. The figure below compares the 3G subscriber bases of UK MNOs. Figure 9: MNOs’ 3G Subscriber Base – The UK (In Million, End-2008) 3G Subscriber Base (In Million) 6 5.1 4.8 5 4 3.5 3.4 T-Mobile Orange 3 2.0 2 1 0 O2 Vodafone 3 Operator Source: Portio Research Ltd. Focus on higher valued postpaid subscribers The operator has shifted its focus to the postpaid segment and limited its activities for the prepaid segment. This move has led to higher ARPU as the postpaid subscribers tend to spend more than their prepaid counterparts. The operator increased its postpaid subscriber base to nearly 68 percent of total subscribers by end-2008 as compared to 62 percent a year ago. As shown in the figure below, this number is the highest for any operator in the UK. Postpaid Subscribers as a Percentage of Total Subscriber Base (In Percent) Figure 10: MNOs’ Postpaid Subscribers as a Percentage of Total Subscriber Base – The UK (In Percent, End-2008) 80 67.9 70 60 50 41.1 39.0 37.7 40 24.4 30 20 10 0 O2 Vodafone T-Mobile Orange 3 Operator Source: Portio Research Ltd. © 2009, Portio Research. All Rights Reserved 27
  28. 28. Ranking The World’s Best Mobile Operators Innovative approach to mobile broadband, content and new services 3 is known to offer innovative services to its subscribers in the UK. To popularise and increase the uptake of these services it follows an interesting strategy of offering value added services bundled with voice and SMS services at relatively cheap rates, along with fixed free minutes and text messages. This incentivises subscribers to stick to its network, and thereafter it promotes other data services among its customers. The strategy of providing more value for money has also helped in bringing down monthly churn to 2.6 percent in 2008, compared to 3.6 in 2007. The figure below highlights the use of its data services with monthly data ARPU of USD 24.3 in 2008, again highest among the UK’s operators. Figure 11: MNOs’ Monthly Data ARPU – The UK (In USD, 2008) Monthly Data ARPU (In USD) 30 24.3 25 20 15.2 15 11.5 10.5 8.4 10 5 0 O2 Vodafone T-Mobile Orange 3 Operator Source: Portio Research Ltd. 3 has always set benchmarks in the UK wireless market with its innovative and user friendly services. These include: • 3 Skypephone: 3 and Skype launched a service in October 2007 which allows 3’s subscribers to make Skype to Skype calls and send Skype instant messages from mobile handsets to other Skype users for free. • Google Maps and Search: The company offers Google Search and Google Maps on its Planet 3 mobile portal. • WePay: The operator’s “WePay” service credits users’ account with a fixed amount for every call or SMS they receive. The table below highlights the importance of factors which enabled the operator to generate high ARPU. Factors Identified 3 The UK Leaders in 3G Focus on postpaid subscribers Innovation 28 © 2009, Portio Research. All Rights Reserved 3’s strategy of providing more value for money has also helped in bringing down monthly churn to 2.6 percent in 2008, compared to 3.6 in 2007.
  29. 29. Ranking The World’s Best Mobile Operators Rogers Canada Ownership: Rogers Communications Launched: 1985 st Subscriber Base: 7.9 million (31 December 2008) ARPU: USD 60.52 (Monthly, 2008) ARPU PPP: USD 60.52 (Monthly, 2008) 4 st Market Share: 35.8 percent (31 December 2008) st Canada Mobile Penetration: 66.8 percent (31 December 2008) Technology: GSM and WCDMA Market Environment – Canada: • Dominated by three players – Bell Mobility, Telus Mobility and Rogers Wireless (all of which made our Top 20 for this performance measurement) • Wireless data use is quite expensive when compared to other major markets • Higher prices for data-plans led to higher ARPU in the country • Operators are increasing their focus on subscriber retention • Increased demand for data services has led to network upgrades The figure below shows the ARPU and ARPU PPP of MNOs in Canada. Figure 12: MNOs’ Monthly ARPU and Monthly ARPU PPP – Canada (In USD, 2008) 60.5 60.5 Monthly ARPU and Monthly ARPU PPP (In USD) 62 60 59.2 59.2 58 56 54 52 51.3 51.3 50 48 46 Bell Mobility Rogers Telus Mobility Operator Monthly ARPU Monthly ARPU PPP Source: Portio Research Ltd. Rogers’ Strategies Rogers Canada is the largest mobile network operator in the country with nearly 8 million subscribers by end-2008. Canada is a high ARPU market, a fact which can be attributed to the high percentage of postpaid subscribers and expensive data plans. Rogers has adopted certain strategies which enable the operator to generate higher revenue per user. These are mentioned below: • Focus on postpaid subscribers • Promotion of data services in both consumer and enterprise segments • Roll out of several Smartphones 4 Please note: The conversion factors for PPP in the US and Canada are 1. © 2009, Portio Research. All Rights Reserved 29
  30. 30. Ranking The World’s Best Mobile Operators Focus on postpaid subscribers The operator has the highest percentage of postpaid subscribers in the country. Furthermore, it has launched various strategic plans to attract more postpaid subscribers and prolong their contracts. Rogers was successful in reducing postpaid churn from 1.2 percent in 2007 to 1.1 percent in 2008. The figure below compares the percentage of postpaid subscribers of the three major MNOs in Canada. Postpaid Subscribers as a Percentage of Total Subscriber Base (In Percent) Figure 13: MNOs’ Postpaid Subscribers as a Percentage of Total Subscriber Base – Canada (In Percent, End-2008) 80.3 85 82.3 Telus Rogers 72.3 68 51 34 17 0 Bell Operator Source: Portio Research Ltd. The operator’s postpaid monthly ARPU witnessed an increase of 5 percent in 2008 compared to that in 2007. The success of Rogers’ strategy to increase the percentage of postpaid subscribers is reflected in the figure below, which clearly shows that in 2008 Rogers experienced the highest number of gross postpaid additions. Gross Postpaid Susbscriber Additions (In Million) Figure 14: MNOs’ Gross Postpaid Subscriber Additions – Canada (In Million, 2008) 0.6 0.54 0.48 0.5 0.4 0.30 0.3 0.2 0.1 0.0 Bell Telus Rogers Operator Source: Portio Research Ltd. Promotion of data services in both consumer and enterprise segments Canadian operators, including Rogers, charge comparatively higher prices for mobile data services compared to other major operators worldwide; this is somewhat responsible for the country’s higher ARPU. Rogers has been able to grow the demand for its data services among its subscribers, a trend which is depicted in the figure below. The data revenue generated by Rogers’ subscribers in the year 2008 stood at approximately USD 893 million. In 2008, the operator’s data revenue increased by nearly 39 percent over 2007, and 30 © 2009, Portio Research. All Rights Reserved
  31. 31. Ranking The World’s Best Mobile Operators represented 16 percent of the network’s revenue, compared to 13 percent in 2007. This growth in revenue was due to increased uptake of services pertaining to mobile Internet. Data Revenue as a Percentage of ARPU (In Percent) Figure 15: Data Revenue as a Percentage of ARPU – Rogers Canada (In Percent, 2008) 20 17.5 14.4 15 11.2 10 5 0 2006 2007 2008 Year Source: Portio Research Ltd. The operator has targeted those subscribers which are more likely to use services such as voicemail, caller line ID, text messaging and other data services. Apart from the consumer segment, it has promoted its services among the enterprise segment by offering services such as mobile business solutions, corporate voice plans etc. Roll out of several Smartphones Rogers activated more than 1.2 million Smartphone devices in 2008. Approximately 57 percent of these activations were done for existing subscribers who upgraded their plans and signed multi-year contracts. These included both voice and data plans for most users thus enabling the operator to generate an above average ARPU. Furthermore, to better the experience of data services use for its subscribers, Rogers introduced higher speeds of 7.2 Mbps over its 3.5G networks. Smartphones accounted for 41 percent of device upgrades in 2008 for the operator, compared to 12 percent a year ago. The operator launched iPhone 3G in July 2008 and within six months had activated nearly 0.4 million devices. It introduced various voice and data plans specifically for iPhone 3G which offered data usage from 400 MB to 2 GB, and unlimited voice minutes in the evenings and at weekends. The table below highlights the importance of factors which enabled the operator to generate high ARPU. Factors Identified Rogers Canada Focus on postpaid subscribers Promotion of data services Roll out of Smartphones © 2009, Portio Research. All Rights Reserved 31 Rogers activated more than 1.2 million Smartphone devices in 2008. The operator launched iPhone 3G in July 2008 and within six months had activated nearly 0.4 million devices.
  32. 32. Ranking The World’s Best Mobile Operators Chapter 3 Performance Measurement 2 – ARPU as a Percentage of Disposable Income 32 © 2009, Portio Research. All Rights Reserved
  33. 33. Ranking The World’s Best Mobile Operators Performance Measurement 2 – ARPU as a Percentage of Disposable Income The revenue generated per subscriber by an MNO in a market depends on the disposable income of the users in the country and the operator’s ability to create revenue generating streams to cash-in on these opportunities. The more adaptive and pro-active operators are regarding the modeling of products, services, and pricing plans to suit local needs, the greater their chances to generate revenues. With the increasing maturity of developed as well as emerging markets in using voice as well as non-voice services, operators are offering products such as video calls, multimedia services, and information-related offerings. However, as far as judging an operator’s ability to tap market potential is concerned, ARPU is not a fair measure of an operator’s performance on a worldwide level. As ARPU alone may not accurately reflect an operator’s innovativeness to boost ARPU levels in a low income market, the ARPU as a percentage of disposable income may be a better permormence measure. Formula and Rationale The formula used for the calculation of this performance measurement is given below: Value = MNO ARPU (In USD) / Disposable Income per Person per Month (In USD) The figure below shows a scatter plot of a country’s monthly ARPU against ‘disposable income per head’ for the year 2008. Figure 16: Scatter Plot of Monthly ARPU vs. Monthly Disposable Income – Worldwide Markets (2008) 70 Monthly ARPU (In USD) 60 Japan 50 The US France The UK Israel 40 Australia 30 Venezuela South Africa Germany 20 10 India 0 0 Russia China 500 1000 1500 2000 2500 3000 3500 Disposable Income per head per month (In USD) Monthly ARPU Linear (Monthly ARPU ) Source: Portio Research Ltd. © 2009, Portio Research. All Rights Reserved 33
  34. 34. Ranking The World’s Best Mobile Operators The figure above indicates that there is a strong correlation between the disposable income of a country and ARPU. However, we can see there are some markets showing above average performance (plots lying above the linear correlation line) both in high ARPU as well as low ARPU markets. Therefore, to keep track of how innovative an operator may be in these markets, we will instead use ARPU as a percentage of disposable income. Limitations: This performance measurement index may be a bit biased for emerging countries with low penetration. As the mobile services in these markets have been primarily taken up by the early adopters (or urban population) who are willing to pay a premium for the services, the ARPU might be on the high side compared to what it would have been if the penetration were higher. Also, African markets have lower wireline penetration and wireless is proving a more effective and cost effective mode of telecommunication. Therefore, wireless is growing swiftly in these markets and is grabbing a larger share of the available spending power. Rankings The figure below shows the Top 20 MNOs based on this performance measurement index. Figure 17: (2008) Top 20 MNOs Worldwide – ARPU as a Percentage of Disposable Income 5 Rank 1 to 10 Rank 11 to 20 1 Etisalat Misr Egypt, 6.2 Tunicell Tunisia, 6.2 Tunisiana Tunisia, 6.2 Asiacell Iraq, 6.2 Zain Iraq, 6.2 Vodafone Egypt, 6.4 Nextel Peru, 6.4 Nextel Argentina, 6.5 Zain Jordan, 6.7 MTN Sudan, 6.7 Nextel Brazil, 6.8 MTN Afghanistan, 6.4 2 GrameenPhone Bangladesh, 6.7 3 Maroc Telecom Morocco, 7.0 4 Zain Kenya, 7.5 5 Zain Nigeria, 7.8 Score 6 Safaricom Kenya, 8.3 7 Globacom Nigeria, 8.9 8 Zain Sudan, 9.2 9 MTN Nigeria, 10.0 10 0 Operator Source: Portio Research Ltd. The rankings of MNOs based on this performance measurement index are given below. 5 Please note: The scores were calculated to four decimal places with each MNO securing a distinct value. Due to rounding off to one decimal place, a few MNOs appear to secure the same score. For a full and detailed explanation of our calculations in this report please see the Methodology section. 34 © 2009, Portio Research. All Rights Reserved
  35. 35. Ranking The World’s Best Mobile Operators Table 8: MNOs Worldwide Ranked 1 to 20 – ARPU as a Percentage of Disposable Income (2008) Rank MNO Score Rank MNO Score 1 MTN Nigeria 10.00 11 2 Zain Sudan 9.19 12 GrameenPhone Bangladesh Nextel Argentina 3 Globacom Nigeria 8.92 13 Nextel Peru 6.42 4 Safaricom Kenya 8.31 14 MTN Afghanistan 6.38 5 Zain Nigeria 7.84 15 Vodafone Egypt 6.37 6 Zain Kenya 7.49 16 Zain Iraq 6.23 7 Maroc Telecom Morocco 7.04 17 Asiacell Iraq 6.23 8 Nextel Brazil 6.83 18 Tunisiana Tunisia 6.21 9 MTN Sudan 6.73 19 Tunicell Tunisia 6.21 10 Zain Jordan 6.72 20 Etisalat Misr Egypt 6.19 6.68 6.54 Table 9: MNOs Worldwide Ranked 21 to 50 – ARPU as a Percentage of Disposable Income (2008) Rank MNO Score Rank MNO Score 21 Meditel Morocco 6.18 36 Telenor Pakistan 5.74 22 MTN Syria 6.14 37 Djezzy Algeria 5.72 23 Etisalat The UAE 6.09 38 Mobilink Pakistan 5.72 24 Bharti Airtel India 6.07 39 Smart The Philippines 5.62 25 Banglalink Bangladesh 6.05 40 Sun The Philippines 5.59 26 MobiNil Egypt 6.02 41 Globe The Philippines 5.57 27 Vodafone India 6.00 42 TIM Brasil 5.53 28 Hutch Thailand 5.96 43 du The UAE 5.49 29 China Mobile 5.93 44 DiGi Malaysia 5.49 30 MTN South Africa 5.91 45 Maxis Malaysia 5.48 31 Cell C South Africa 5.85 46 Celcom Malaysia 5.48 32 Idea Cellular India 5.84 47 China Unicom 5.46 33 Telkomsel Indonesia 5.82 48 Vivo Brazil 5.45 34 Vodacom South Africa Reliance Communication India 5.80 49 Brasil Telecom 5.45 5.79 50 Excelcomindo Indonesia 5.44 35 © 2009, Portio Research. All Rights Reserved 35
  36. 36. Ranking The World’s Best Mobile Operators Table 10: MNOs Worldwide Ranked 51 to 170 – ARPU as a Percentage of Disposable Income (2008) Rank MNO Rank MNO Rank MNO 51 91 Vodafone Hungary 131 T-Mobile Montenegro 92 3 The UK 132 Vodafone Spain 53 Movistar Colombia Telecom Personal Argentina DTAC Thailand 93 Pannon Hungary 133 Orange Austria 54 Nedjma Algeria 94 Claro Chile 134 Vodafone Portugal 55 Movistar Venezuela 95 T-Mobile Hungary 135 Polkomtel Poland 56 Movistar Argentina 96 Movistar Mexico 136 3 Austria 57 Tigo Colombia 97 Orange Slovakia 137 True Move Thailand 58 Comcel Colombia 98 Kyivstar Ukraine 138 Proximus Belgium 59 Claro Brazil 99 Pelephone Israel 139 Movistar Spain 60 Turkcell Turkey 100 KDDI Japan 140 SingTel Singapore 61 AIS Thailand 101 MegaFon Russia 141 Bell Mobility Canada 62 Mobily Saudi Arabia 102 NTT DOCOMO Japan 142 MTS Russia 63 SK Telecom South Korea 103 VimpelCom Russia 143 Globul Bulgaria 64 Digitel Venezuela 104 Telefonica Slovakia 144 SFR France 65 Telefonica Peru 105 Celtel DR Congo 145 Starhub Singapore 66 Entel PCS Chile 106 Tigo DR Congo 146 Telia Denmark 67 Claro Argentina 107 Vodacom DR Congo 147 KPN The Netherlands 68 Movistar Chile 108 MTN Iran 148 Vodafone Ireland 69 Iusacell Mexico 109 Vivatel Bulgaria 149 O2 Ireland 70 Claro Peru 110 Taiwan Mobile 150 TMN Portugal 71 Oi Brazil 111 Vodafone New Zealand 151 SoftBank Japan 72 Vodafone Czech Republic 112 FeT Taiwan 152 Vodafone Australia 73 Telcel Mexico 113 Beeline Ukraine 153 Optimus Portugal 74 Avea Turkey 114 Orange Poland 154 Orange The UK 75 Movilnet Venezuela 115 Velcom Belarus 155 Orange France 76 Promonte Montenegro 116 VIPnet Croatia 156 Cosmote Greece 77 117 T-Mobile Slovakia 157 Telenor Sweden 118 Rogers Canada 158 Mobistar Belgium 79 LG Telecom South Korea Partner Communications Israel Tele2 Croatia 119 MTS Ukraine 159 Orange Spain 80 TCI Iran 120 PTC Poland 160 Meteor Ireland 81 VIP Serbia 121 Chunghwa Taiwan 161 TDC Denmark 82 mt:s Serbia 122 162 Telstra Australia 83 Telenor Serbia 123 163 O2 The UK 84 KTF South Korea 124 Telus Mobility Canada Vodafone The Netherlands Bouygues France 164 Netcom Norway 85 T-Mobile Croatia 125 Sibir Telecom Russia 165 M1 Singapore 86 Mobiltel Bulgaria 126 BITE Lithuania 166 Elisa Finland 87 O2 Czech Republic 127 Tele2 Lithuania 167 Telenor Norway 88 Vodafone Turkey 128 Omnitel Lithuania 168 Telia Sonera Finland 89 Cellcom Israel 129 Vodafone Romania 169 T-Mobile The Netherlands 90 T-Mobile Czech Republic 130 MTS Belarus 170 3 Italia 52 78 36 © 2009, Portio Research. All Rights Reserved
  37. 37. Ranking The World’s Best Mobile Operators Table 11: MNOs Worldwide Ranked 171 to 204 – ARPU as a Percentage of Disposable Income (2008) Rank MNO Rank MNO Rank MNO 171 Sprint The US 183 195 172 Verizon The US 184 173 Vodafone Greece 185 T-Mobile The UK Telecom Mobile New Zealand SmarTone Hong Kong 197 PCCW Mobile Hong Kong CSL New World Mobility Hong Kong life:) Ukraine 174 Vodafone The UK 186 Sunrise Switzerland 198 Tele2 Sweden 175 Orange Switzerland 187 T-Mobile Austria 199 O2 Germany 176 Sonofon Denmark 188 Wind Hellas Greece 200 Vodafone Germany 177 DNA Finland 189 3 Sweden 201 Base Belgium 178 Optus Australia 190 Vodafone Italy 202 HTIL Hong Kong 179 Tele2 Russia 191 Swisscom Switzerland 203 E-Plus Germany 180 AT&T The US 192 Telia Sonera Sweden 204 T-Mobile Germany 181 T-Mobile The US 193 Telecom Italia 182 Mobilkom Austria 194 Wind Italy 196 The figure below shows the Top 3 MNOs judged on this performance measurement. Figure 18: Top 3 MNOs Worldwide – ARPU as a Percentage of Disposable Income (2008) MTN Nigeria 1 Zain Sudan 2 3 Globacom Nigeria Source: Portio Research Ltd. © 2009, Portio Research. All Rights Reserved 37
  38. 38. Ranking The World’s Best Mobile Operators MNO Strategies MTN Nigeria Ownership: MTN Group (76.1 percent) Launched: 2001 st Subscriber Base: 23.1 million (31 December 2008) ARPU (estimated): USD 16.5 (Monthly, 2008) Disposable Income per Person per Month: USD 30.3 (2008) st Market Share: 37.8 percent (31 December 2008) st Nigeria Mobile Penetration: 42.6 percent (31 December 2008) Technology: GSM and WCDMA Market Environment – Nigeria • Nigeria is witnessing a stupendous growth in its mobile subscriber base and is one of the leading mobile markets in the Middle East and African region. • The market experienced tremendous growth during 2006-2008 – with the subscriber base growing at a CAGR (Compound Annual Growth Rate) of 50.5 percent. Figure 19: Subscriber Base and Penetration – Nigeria (2006-2008) 50 43.1 60 40 50 40 26.2 23.5 63.0 30 20 10 30 20 Penetration (In Percent) Subscriber Base (In Million) 70 38.3 10 27.8 0 0 2006 2007 2008 Year Subscriber Base Penetration Source: Portio Research Ltd. • • Power infrastructure expansions in Nigeria have been inadequate to cope with the subscriber growth and required network capacity expansion to support the desired Quality of Service (QoS). • Provision of Unified Access Service licenses – which allow subscribers to roam outside the immediate service area of their operator – has lowered the entry-level barrier for entering operators and therefore intensified competition. • 38 Focus of the Nigerian operators is on low income consumers and per second billing is prevalent. The rising concern of the Nigerian regulatory body regarding sub-standard QoS among Nigerian MNOs led to its intervention in 2007. The regulatory body put a ban on the promotional campaigns run by the MNOs till it was convinced that the required level of quality had been reached. The factors which hampered QoS in the country are explained in the figure below. © 2009, Portio Research. All Rights Reserved

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