Unlimited mobile data plans are a new thing on the Dutch market since the start of this year. T-Mobile started with an offer of unlimited calls, SMS and data for EUR 35 per month, and Tele2 followed in May with its own offer for EUR 25. In a market where it's increasingly difficult for providers to differentiate their offers and networks offer similar quality, this forms a new, de facto ceiling. We look below at the impact of unlimited data on the market so far, based on data from Telecompaper's Postpaid Insights report.
Take-up limited, but data usage growing
Penetration of the new unlimited plans is still limited. Our data shows just one in 20 T-Mobile postpaid customers subscribe to the Unlimited offer. The share is slightly higher at Tele2. The low levels are not so surprising given that the plans were only introduced this year and many mobile customers are on one- or two-year contracts, making it costly to switch.
In the overall postpaid market, there is a clear migration towards bigger bundles. Two years ago, almost half the market had a plan with no more than 500 MB, and three-quarters were on 1 GB or less. The share with 500 MB or less has fallen since then to just a quarter, and almost half have more than 1 GB now. A quarter of Dutch mobile users with a data plan subscribe to over 4 GB per month.
Sim-only spend increasing
An important driver for unlimited plans is increasing customer spend. The idea of not having to worrying about data limits tempts customers into paying for the higher-cost plan. Our data shows that spending among T-Mobile customer increased slightly in the past year, from an average EUR 29 per month to around EUR 30 per month. These figures also include any fees for a handset.
For Sim-only customers, average spend at T-Mobile rose over the same period from EUR 17.50 to EUR 19. Tele2's Sim-only figures for the third quarter also show growth, from less than EUR 15 per month to around EUR 17. This brings Tele2 in line with the total Sim-only market.
Another question is whether the Unlimited plans are attracting new customers to the operators, or is it just existing customers upgrading. T-Mobile's share of the postpaid market has been relatively stable at around 20 percent. Tele2's share showed a small increase over the past year, from 7 to 8 percent. Both providers have largely gained share among Generation Z (12-19 year-olds) and Young Millennials (20-24). Roughly half their customers on the unlimited plans were already subscribers.
Other market developments also may be playing a role in the above figures:
- T-Mobile has its offer of zero-rated data for music streaming. It's the only operator offering this.
- The handset market has changed following the implementation of consumer credit rules for phone purchases from May. This has depressed handset sales at most operators - as much as 40 percent at Tele2.
- Operators have implemented the EU's 'roam like at home' rules, so customers can now use their bundles while roaming in the EU. This has made it more difficult to compare the costs of roaming bundles.
- Big operators like KPN, Telfort and VodafoneZiggo are offering perks such as extra mobile data when taking a quad-play subscription.
Conclusion: still early days
The unlimited bundles have not yet led to a major shake-up of the Dutch market. This is partly because they are still new, and many customers are in long-term contracts. However, there is a clear trend towards bigger data bundles in the past two years. Sixty percent of 20-29 year-olds now have a data bundle of more than 2 GB per month.
T-Mobile and Tele2 do show a small increase in customer spend among Sim-only clients. Whether this is enough to convince the other providers to join the unlimited bandwagon is still unclear. We will look again at the figures in the new year, after the plans have been on the market a full year and more customers have had a chance to change contract.
