2017 will go down as a year of considerable changes on the Dutch mobile market. T-Mobile and Tele2 introduced plans with unlimited calls, SMS and data in both the Netherlands and EU. In April, VodafoneZiggo launched its converged offering with advantages for customers taking both fixed and mobile services. In May, new consumer credit rules under the Law on Financial Supervision meant increased disclosure and reporting requirements for sales of handsets over EUR 250. New roaming rules took effect in the EU in June, so mobile users no longer pay extra to use their bundle or prepaid credit when roaming in the EU. And just at the end of the year, T-Mobile and Tele2 announced plans to merge. What does all this mean for the mobile market going forward?
Shift to SIM-only
The changes in mobile pricing and regulation set off multiple trends in the market. The first is a clear shift towards Sim-only sales, where handsets are acquired separately from the mobile service subscription. Consumers are holding on to their phones longer, and those who do buy a new device pay more upfront. Many consumers, especially the age group 30-39, are concerned about the new credit reporting requirements for phone purchases in installments and are choosing instead to buy a phone below the limit of EUR 250.
Demand for no-frills and fixed-mobile offers
Mobile providers are starting to run out of ways to differentiate their offers, while customers are still searching for cheap offers. No-frills providers have benefitted, such as Simpel, which showed substantial growth in the past year. Other consumers took advantage of the extras offered from bundling their fixed and mobile services at the same provider. These quad-play packages are now used by 30% of Dutch households. This has helped the premium providers maintain their market share.
More data roaming
After the introduction of 'roam like at home' in the EU in June, Dutch consumers started using mobile data much more when traveling. Providers were the main losers, as they could no longer charge extra for roaming services.
Revenues still falling
The above trends contributed to a continued fall in mobile service revenues. Revenues in the third quarter of 2017 were down by EUR 46 million year-on-year. Tele2, which has yet to make a profit from its 4G network, threw in the towel and agreed to a takeover by T-Mobile.
Customer is the winner?
The big winner from all this appears to be the consumer. Mobile customers are getting more gigabytes, minutes and SMS for the same or less money.
At the same time, all the mobile networks scored good to very good in various quality tests and international comparisons. Customer satisfaction is also improving at nearly all the providers, based on NPS and Word of Mouth scores. The Dutch mobile providers have reached an average score of 21. Nevertheless, providers still need to earn high enough margins to continue to invest in network development and services. The disappaearnace of one mobile network in the next year makes it unclear whether the same service and price levels came be expected to continue.
