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Belgian mobile market still in need of a shake-up

Tuesday 8 July 2014 | 11:10 CET | Background

The Belgian mobile market, including MVNOs but excluding M2M, saw a quarterly decline of 1.4 percent in customers during the first quarter of 2014. Mobistar was the only operator to gain customers, but this was entirely due to its wholesale MVNO customers (mainly Telenet). Excluding wholesale, Mobistar lost 79,000 customers. Proximus also lost customers, but remains market leader with 39 percent of all subscribers.

Compared to Q1 2013, the number of Belgian mobile users decreased by 0.8 percent, with a large drop in prepaid offsetting some growth in postpaid. The number of prepaid customers fell by 8.3 percent, while postpaid gained 5.4 percent. This could be due to prepaid customers with more than one SIM card changing to a single postpaid subscription. Proximus and Base lost a significant number of prepaid customers, both in the past quarter and compared to a year ago, while Mobistar’s prepaid base only went down by 1,000 customers on a yearly basis and actually increased by 17,000 in the past quarter. However, this was again thanks to an increase in prepaid MVNO customers, as Mobistar’s own prepaid base fell by 37,000 in Q1 2014.

 

Repricing effecting revenues

Last year the Belgian government agreed with the MNOs and Telenet to contact all their customers and offer them their newest tariffs. As the majority of new plans offer lower prices and/or include higher allowances, this repricing has had a negative effect on mobile revenues. Overall, the mobile service revenues declined by 10 percent year-on-year in Q 12014 and were down by 4.3 percent compared to the previous quarter. Prepaid revenues declined much faster than the gain in postpaid revenues. All three operators lost prepaid revenue, while Base was the only operator to see a very small increase in postpaid revenues compared to a year ago. Looking at the split between voice and data, data did show some growth, but only small, while voice revenues dropped by 18.3 percent on a yearly basis.

Data usage and smartphone penetration in Belgium remain on the low side compared to neighbouring countries. According to a recent study by Havas Media Brussels, 40 percent of Belgians own a smartphone, compared to more than 70 percent in the Netherlands.  However, smartphone adoption is increasing and the continued roll-out and promotion by the operators of their 4G networks should help data usage grow faster.

4G could increase revenue but Belgian smartphone penetration still much lower than surrounding countries

The operators are all focusing on their 4G roll-out and expect 4G to give them a boost in usage and therefore revenue, although Mobistar said that it doesn’t expect this to happen before the end of 2014. Handset subsidies have been allowed for a while now, but the operators only offer certain handsets and plans as a combined subscription, making purchasing a new handset, especially a high-end smartphone like the latest iPhone or Samsung S5, a hefty one-off expense for Belgian consumers.

While the pricing environment is gradually improving for Belgian consumers, Telecompaper’s recent comparison of mobile prices across various European countries shows a mixed picture for Belgium. Plans with up to 360 minutes per month cost similar to other European countries, but plans with a lot of minutes (1,000 or more) are more expensive. This combination of high prices for plans with large volumes and having to pay upfront for a handset makes it more difficult for Belgian consumers to change their mobile behaviour to the data-intensive smartphone usage observed in many other European countries.

A fourth operator now highly unlikely

The long-awaited entry of a new network operator to shake up the market is becoming increasingly unlikely as well. According to the regulator BIPT, Telenet and VOO, via their joint venture Bidco, will be handing back the spectrum in the 2,100 MHz band they bought in 2011. The operators said that the current mobile legislation does not make it commercially viable to become a fourth network operator. The BIPT told Telecompaper that any interested party can request the BIPT to start an auction for the spectrum given back by Bidco. Mobistar could be interested in buying (some of) that spectrum, as it reportedly has the worst 3G network of the three MNOs. It could also use the frequencies to strengthen its LTE network further. 

The regulator and government wanted a fourth operator to increase competition and bring down prices. As this now seems highly unlikely, more competition can only come from the existing operators. Telenet already forced the MNOs to reduce prices when it started its King and Kong offer, but it seems content to stick with its current offer aimed at its existing customer base. With Mobistar planning to offer fixed services again from Q4 2014, it could introduce quad-play offers to entice fixed and mobile customers away from Belgacom, Base, Telenet and VOO. Another possible shake-up of the market could be the rumoured sale of Base to Altice (Numericable). Numericable is a small cable player active only around Brussels, but via Base it could become a nationwide player in both the fixed and mobile market.



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