Dutch low-cost mobile providers step up competition on data bundles

Thursday 8 February 2018 | 16:12 CET | Background

Dutch low-cost mobile providers are increasingly competing on the size of data bundles. While average monthly prices changed little in 2017, the size of data bundles increased, according to an analysis by Telecompaper of the total cost of ownership in the mobile postpaid market. Simpel kicked off the trend with a significant increase in its data bundles, and Hollandsnieuwe, Simyo, Ben and Youfone have since followed. 

The independent MVNO Simpel shows how the market has changed. At the start of 2017, Simpel had the least attractive price per GB but the cheapest average price based on all subscriptions. By the end of the year, Simpel had the best deals per GB as well as the cheapest average plan price. While the price increased slightly, Simpel offered a lot more data in its bundles by year-end.

Vodafone's brand Hollandsnieuwe cut its lowest price per GB by more than half, from EUR 6.00 to EUR 2.80. Its average plan price was unchanged, meaning the provider doubled its allowances.

Hollandsnieuwe's pricing is different from the rest of the market, as it uses units of minutes, SMS and MB. So all usage is deducted from the same bundle, and the amount of data available is reduced whenever the customer calls or sends a text. The other no-frills providers have separate data bundles. This makes the offer at Hollandsnieuwe difficult to compare at first glance for consumers. 

Simyo showed little change over the year. The KPN subsidiary focuses on the customer experience, quick service and the possibility for customers to change their bundle on a month-to-month basis. Nevertheless, the company was forced in Q4 2017 to introduce an 8 GB bundle in order to remain competitive. While Simyo is not the cheapest for data, the 8 GB bundle helps it stay competitive with a low price per GB. Its average plan price fell slightly, but it still remains somewhat more expensive than the other providers. 

Ben feels the heat

T-Mobile's brand Ben was one of the best positioned low-cost providers at the start of 2017, but was being overtaken by Simpel by the end of the year, based on the price per GB. The lowest price per GB fell at Ben from EUR 3.6 to EUR 2.0, and the average plan price was down slightly, by around EUR 1.50. Even with only minor changes, Ben still has one of the best offers in the low-cost segment, based on the average plan price and lowest price per GB. 

The MVNO Youfone has targeted the lowest price per GB. The company is not the cheapest but offers the biggest data plans for the lowest price. Its lowest price per GB (EUR 1.47) is the unlimited data plan with 125 minutes/SMS. While this is marketed as unlimited, the speed is cut after 15 GB per month. Youfone is an independent company, so its pricing is dependent on its wholesale agreement with KPN. 

Conclusion: no-frills provider competing on data bundle

The no-frills providers have chosen to largely compete on the size of data bundles. Especially Simpel is driving this trend, and this has helped the company take an around 10 percent share of the Sim-only market. The other low-cost providers have been forced to follow, and competition has intensified on the mid- to high-end data bundles. The question is how long this can continue. The proposed merger of Tele2 and T-Mobile, which are both offering unlimited data, may reduce the pressure somewhat. 

This article is based on data from Telecompaper's Telecom proposition insights database, which offers historical and current data on all fixed and mobile plans in the Dutch market. An analysis of the data is available through Telecompaper products such as Mobile Proposition Insights and Total Cost of Ownership (TCO). A real-time dashboard is also available for customers to access the database. For more information, please contact research@telecompaper.com.

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