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3Q11 United Kingdom Mobile Forecast  Executive Summary
 

3Q11 United Kingdom Mobile Forecast Executive Summary

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This FreeSight report contains an executive summary of our 3Q11 United Kingdom Mobile Operator Forecast, 2011 - 2015. ...

This FreeSight report contains an executive summary of our 3Q11 United Kingdom Mobile Operator Forecast, 2011 - 2015.



IEMR’s Mobile Operator Forecast on the United Kingdom provides over 50 operational and financial metrics for the UK wireless market and is one of the best forecasts in the industry. We provide five-year forecasts at the operator level going out to 2015. We also provide quarterly historical and forecast data starting in 1Q2003 and ending in 2Q2013. Operators covered for the UK include Vodafone U.K. (Vodafone Limited), Telefónica O2 UK Limited, Everything Everywhere Ltd. (Orange and T-Mobile), Hutchison 3G UK Limited, Virgin Mobile UK (Virgin Mobile Telecoms Ltd.), and Tesco Mobile Ltd. Our Mobile Operator Forecasts are updated quarterly and are available for one-time delivery or through regular updates.



Notable highlights of the 3Q11 United Kingdom Mobile Operator Forecast include:



· Subscriber growth is declining in the UK. The operator-wide average subscriber growth (YoY) was 2.6% in 2Q.2011, up from -0.9% in 2Q.2010. Telefónica O2 UK saw its subscriber growth decrease from 4.7% in 2Q.2010 to 3.9% in 2Q.2011. Vodafone’s subscriber growth (YoY) fell to 1.9% in 2Q.2011, down from 2.1% in 2Q.2010.



The industry average monthly ARPU was US$ 32.67 in 2Q.2011, an improvement with the decline narrowing to -1.5% in 2Q.2011 from a decline of -6.0% in 2Q.2010. Wireless carriers in the United Kingdom continue to lower their ARPUs. Orange (Everything Everywhere)’s monthly ARPU declined by -2.8% (YoY) to reach US$ 30.50 in 2Q.2011. Monthly ARPU at Telefónica O2 UK was US$ 33.71 in 2Q.2011, down -6.1% YoY.

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    3Q11 United Kingdom Mobile Forecast  Executive Summary 3Q11 United Kingdom Mobile Forecast Executive Summary Presentation Transcript

    • 3Q.2011 United Kingdom MobileOperator ForecastUK to have 95 million mobile subscriber connections in 2015 with EverythingEverywhere taking 38.4% market shareOctober 2011
    • Subscriber growth is declining in the UK 2.6% industry average subscriber growth in 2Q.2011INDUSTRY AVERAGE Chart 1: Subscriber Growth (4Q08 – 2Q11), %SUBSCRIBER GROWTH IN THE UKWIRELESS MARKET HAS TURNED 100%POSITIVE 90% The operator-wide average 80%subscriber growth (YoY) was 2.6% in 70%2Q.2011, up from -0.9% in 2Q.2010. 60% Telefónica O2 UK saw its 50%subscriber growth decrease from 40%4.7% in 2Q.2010 to 3.9% in 2Q.2011. 30% Vodafone’s subscriber growth (YoY) 20%fell to 1.9% in 2Q.2011, down from 10%2.1% in 2Q.2010. 0% Due to the merger between Orange -10%and T-Mobile, subscriber growth at -20%Orange (now Everything Everywhere) 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11has been significantly higher than atthe other operators. However, in the Vodafone Telefónica O2 UKlatest quarter, it did not fare better Orange (Everything Everywhere) T-Mobile UKthan the others. Everything Hutchison 3G UK Industry TotalEverywhere’s subscriber growth(YoY) was -1.0% in 2Q.2011. Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 2
    • ARPU growth in the United Kingdom made a rebound -1.5% industry average ARPU growth in 2Q.2011THE INDUSTRY AVERAGE ARPU IN Chart 2: ARPU Growth (4Q08 – 2Q11), %THE UNITED KINGDOM ISSTABILIZING 25% 20% The industry average monthly ARPUwas US$ 32.67 in 2Q.2011, an 15%improvement with the decline 10%narrowing to -1.5% in 2Q.2011 from a 5%decline of -6.0% in 2Q.2010. 0% Wireless carriers in the United -5%Kingdom continue to lower their -10%ARPUs. Orange (Everything -15%Everywhere)’s monthly ARPU declinedby -2.8% (YoY) to reach US$ 30.50 in -20%2Q.2011. -25% -30% Monthly ARPU at Telefónica O2 UK 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q10 2Q11was US$ 33.71 in 2Q.2011, down -6.1% YoY. Vodafone Telefónica O2 UK Orange (Everything Everywhere) T-Mobile UK Hutchison 3G UK Industry Total Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 3
    • Minutes of Use per Subscriber is increasing Industry average MOU/Sub is 204 minutes per month The operator-wide average Minute of Chart 3: MOU/Sub Growth (4Q08 – 2Q11), % Use (MOU) per subscriber was 204 15% minutes per month in 2Q.2011, up + 0.7% YoY. 10% MOU/Sub growth rate at both Vodafone and Telefónica O2 UK was 5% 0% in 2Q11. MOU per subscriber at Vodafone, 0% Telefónica O2 UK, and Orange (Everything Everywhere) was 188 -5% minutes, 223 minutes, 199 minutes respectively in 2Q.2011. -10% -15% 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Vodafone Telefónica O2 UK Orange (Everything Everywhere) T-Mobile UK Industry Total Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 4
    • Negative EBITDA growth at Vodafone in 2Q.2011 +4.4% INDUSTRY-AVERAGE EBITDA Chart 4: EBITDA Growth (4Q08 – 2Q11), % GROWTH IN 2Q.2011 60% • The industry average EBITDA growth rate (YoY) in 2Q.2011 was 4.4%, up 40% from -0.1% in 2Q.2010. • EBITDA growth at Vodafone 20% improved. In 2Q.2011, Vodafone’s EBITDA growth was 13.7% (up from 0% 6.0% in 2Q.2010). -20% • Telefónica O2 UK weakened with EBITDA growth (YoY) of 1.4% in 2Q.2011, down from 6.6% in 2Q.2010. -40% -60% 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Vodafone Telefónica O2 UK Orange (Everything Everywhere) T-Mobile UK Industry Total Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 5
    • So what is IEMR’s Forecast? Total mobile subscriber connections in the UK to reach 95.5 million in 2015 We forecast that the number of total Chart 5: Subscribers by operator (CY09 – CY15F) wireless subscriber connections in United Kingdom will increase from 40,000 81.7 million in the end of 2010 to 95.5 35,000 million in the end of 2015. With the merger between Orange 30,000 and T-Mobile, we expect that the subscribers (000s) merged company, Everything 25,000 Everywhere, will have approximately 36.6 million mobile subscribers in 20,000 2015. 15,000 We forecast that Telefónica O2 UK will have 25.6 million wireless 10,000 subscribers in 2015 (26.9% market share). 5,000 We expect that the number of 0 wireless subscribers of Hutchison 3G CY09 CY10 CY11F CY12F CY13F CY14F CY15F UK will continue to increase, reaching Vodafone Telefónica O2 UK 6.5 million by the end of 2015. Orange (Everything Everywhere) T-Mobile UK Hutchison 3G UK Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 6
    • So what is IEMR’s Forecast? ARPU levels in the United Kingdom to remain stable WE EXPECT THE OPERATOR-WIDE Chart 6: Average Revenue per User (ARPU) AVERAGE ARPU LEVEL TO per month (CY09 – CY13F), GBP REMAIN AT APPROXIMATELY GBP 20 OVER THE NEXT TWO YEARS 25 Our forecasting model does not predict major changes in the industry 20 average ARPU over the next two Monthly ARPU (GBP) years. The industry average ARPU will be 15 GBP 20.13 per month in 2013, according to our model. 10 We expect that Vodafone’s ARPU level will be the highest among the UK operators over the next two years. 5 0 CY09 CY10 CY11F CY12F CY13F Vodafone Telefónica O2 UK Orange (Everything Everywhere) T-Mobile UK Hutchison 3G UK Average Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 7
    • So what is IEMR’s Forecast? Telefónica O2 UK to enjoy the highest profitability Telefónica O2 UK will be enjoying Chart 7: EBITDA margins (CY09 – CY13F), % the highest level of profitability in the UK wireless market during the forecast 30% period. Our model is predicting that 25% Telefónica O2 UK’s EBITDA margins (calculated as EBITDA/service 20% revenue) will remain stable at about 30% from 2011 to 2013. 15% We forecast that Vodafones EBITDA margin will be about 27% from 2011 - 10% 2013. Hutchison 3G UK’s EBITDA margin 5% will remain lower than those of its competitors at about 8.3% in 2013. 0% CY09 CY10 CY11F CY12F CY13F Vodafone Telefónica O2 UK Orange (Everything Everywhere) T-Mobile UK Hutchison 3G UK Average Source: IEMR© 2011 IE Market Research Corp.All rights reserved. 8
    • IE Market Research What do we do? We Drive Enterprise Strategy in the telecoms domain by: Producing the BEST and most COMPREHENSIVE strategy coverage of the vendor and operator space in the world With over 800+ operators and 50+ vendors, we cover the strategies of more telecom operators, vendors, and markets than ALL of our competitors© 2011 IE Market Research Corp.All rights reserved. 9
    • About IEMR Blue Chip client base of over 100 customers across core telco value chain . . . Operators OEMs / ODMs Network Infrastructure Vendors© 2011 IE Market Research Corp.All rights reserved. 10
    • About IEMR And over 200 consulting and financial services institutions are IEMR customers© 2011 IE Market Research Corp.All rights reserved. 11
    • Thank you for reading our report. If you liked what you read, please letpeople know about this site by linking to us from your own website. Just copy the html code below and paste it either into a sidebar widget or a post on your own site. It would be much appreciated! Here is the code to copy/paste: <a href="https://www.iemarketresearch.com/Members/Reports/3Q11-United- Kingdom-Mobile-Operator-Forecast-2011--2015-UK-to-have-95-million-mobile-subscriber-connections-in-2015-with-Everything-Everywhere-taking-38-4-market- share-RID2713-1.aspx">United Kingdom Mobile Operator Forecast</a> © 2011 IE Market Research Corp. All rights reserved. 12
    • If you would like to purchase the full report together with the detailed Excel sheets and forecasts, please click here and sign up as a member client. You can also call us at +1 604 327 4367 or email us at info@iemarketresearch.com© 2011 IE Market Research Corp.All rights reserved. 13
    • IE Market Research Disclaimers and DisclosuresThe opinions expressed in this report are the true opinions of the analyst(s) and IE Market Research Corp. (IEMR) about the firm(s) and/or industry appearing inthis report. Any “forward looking statements” are the best estimates and opinions of the analyst(s) and IEMR based upon information that is publicly availableand that the analyst(s) and IEMR believes to be correct. There is no guarantee that forecasts appearing in this report will materialize.The analyst(s) responsible for preparing this research report received compensation that is based upon various factors, including total revenues of IEMR, aportion of which are or have been generated by consulting and contract research activities undertaken by IEMR for firm(s) appearing in this report. Theanalyst(s) and/or IEMR does not own any shares of the firm(s) appearing in this report, does not make or offer for sale shares of the firm(s) appearing in thisreport, and does not have any investment banking business with firm(s) appearing in this report. IEMR may have been contracted by firm(s) appearing in thisreport to undertake competitive intelligence, business strategy, market research, branding research, and/or public opinion research activities. No part of thecompensation of the responsible analyst(s) named herein is, or will be, directly or indirectly, related to the specific recommendations or views expressed by theresponsible analyst(s) in this report.Forward Looking StatementsThis report contains forward looking statements. Forward looking statements regarding firm(s) inherently involve risks and uncertainties that could cause actualresults to differ from such forward looking statements. Factors that could cause or contribute to such differences include, but are not limited to, continuedacceptance of the firm(s)’ products/services in the marketplace; acceptance in the marketplace of the firm(s)’ new products/services; competitive factors; newproducts/services introductions by others; technological changes; dependence on suppliers; mergers and acquisitions; systematic risks and other risksdiscussed in the firm(s)’ periodic report filings, including interim reports, annual reports, and annual information forms filed with the appropriate securitiesregulators. By making these forward looking statements, the analyst(s) and IEMR undertake no obligation to update these statements for revisions or changesafter the date of this report.WarrantiesThe information contained in this report has been compiled by IEMR from sources believed to be reliable, but no representation or warranty, express or implied,is made by IEMR or any other person as to its accuracy, completeness or correctness. IEMR does not make any warranties, expressed or implied, as to resultsto be obtained from using this information and makes no express or implied warranties or fitness for a particular use. Clients using this report assume fullresponsibility for whatever results they obtain from whatever use the information was put to. To the full extent permitted by law neither IEMR nor any otherperson accept any liability whatsoever for any direct or consequential loss arising from any use of this report or the information contained herein.© 2011 IE Market Research Corp.All rights reserved. 14
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