Belgian mobile market revenues stabilising after regulation causes prepaid share to drop significantly

Thursday 16 November 2017 | 11:53 CET | Background
The third-quarter results for the Belgian mobile market show the final impact from the regulation requiring prepaid users to register. The market lost over a quarter of its prepaid customers in the past year, and although prepaid has long accounted for only a small share of total mobile service revenues, prepaid revenues were still down 33 percent compared to a year ago. The number of postpaid Sims remained stable, and postpaid revenues were up by nearly 5 percent. With the operators reporting higher data usage and gaining quad-play customers, the market appears to be stabilising. Recent mobile pricing changes could lead to a return to revenue growth in the near term.

The biggest change on the mobile market in Belgium in the past year was the law requiring prepaid users to be registered with their provider. In Q3 2017, the operators had to deactivate the remaining unregistered prepaid cards. The new law caused some MVNOs to cease their activities after an initial registration deadline in June, and Scarlet, Proximus's low-cost brand, recently stopped offering prepaid to new customers.   

Prepaid Sims and revenues drop sharply

The number of prepaid Sims dropped by 26 percent year-on-year, while the prepaid service revenues were 33 percent lower than a year ago in Q3, according to the latest update to Telecompaper's Belgian mobile database. Prepaid now accounts for 21 percent of Sims and nine percent of revenue, compared to 26 percent and 13 percent respectively in Q3 2016. Telenet (Base) lost the most prepaid customers, with its base reduced by a third in a year’s time. That is however partly because of the sale of its brand Ortel to MVNO Lycamobile. Proximus saw its base decline by a quarter and Orange by about a fifth. In total, the number of Sims in the market decreased by 7 percent year-on-year, thereby reducing the rate of penetration to 90.4 percent.

Note: Q4 2015 represents Base only. Q1 2016 onwards represents Telenet/Base
Telenet’s drop in prepaid revenues was larger than its decline in customers, with its prepaid revenues going down by 50 percent, while Proximus lost 29 percent and Orange 19 percent in prepaid revenues over the past year. Postpaid revenues on the other hand increased by nearly 5 percent, so overall the total mobile service revenues were stable year-on-year. They came to EUR 742 million in Q3 2017, equivalent to a very small annual drop of 0.2 percent.

Operators focus on quad-play, increasing data usage and prices

With the operators’ focus now firmly on postpaid and quad-play, they are looking at ways to improve their earnings from these offerings. In recent months, we have seen Telenet revise the Base plans to offer customers more flexibility according to their monthly needs. In June Telenet increased the focus on its own quad-play bundles by enlarging the Wigo bundles while limiting the separate Telenet mobile bundles.  

Orange has doubled the amount of mobile data in its Love subscriptions (its fixed-mobile converged offer). Six percent of postpaid customers are now on converged offers. Orange also stated that the increase in data usage of its postpaid customers has resulted in an annual increase in postpaid ARPU of 2.7 percent. As the average mobile data usage in Belgium is still behind the OECD average according to Orange, the company sees more potential to profit from higher data usage.

Proximus appears to be getting concerned about Orange's success in the converged market. The company increased the amount of data on its plans from August, while also slightly upping prices, and more price increases are planned from January for customers on older plans. In November, Proximus also introduced a new type of multi-play plan, bundling fixed broadband and TV with mobile service. This is the same type of plan offered by Orange, without fixed telephony.   

Data usage in Belgium appears to be finally catching up, and the operators are ready to exploit the increased demand. The impact of the prepaid registration law and other regulatory changes should also diminish in the coming quarters. If the operators' latest changes to postpaid plans prove a winning formula, the mobile market could show a return to modest growth in the near term


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