All three of Italy’s main mobile network operators felt the disruptive effects of low-cost challenger Iliad in the third quarter, with Wind Tre and Vodafone hit hardest, according to new data from Telecompaper. Total mobile service revenues in Italy fell by 6.3 percent year-on-year to EUR 3.18 billion in the third quarter of 2018, led by steep declines at Wind Tre and Vodafone, in spite of Iliad’s initial EUR 46 million contribution in the July to September period.
Iliad’s quarterly figures have been included in Telecompaper’s database for the first time, reflecting how the fourth mobile network operator surged from 635,000 customers at the end of June to 2.23 million on 30 September, giving it a nearly 3 percent market share. The operator had by far the lowest ARPU among Italy's MNOs, at EUR 7.7.
Blended average revenue per user (ARPU) across the market fell to EUR 14.2 in Q3 from EUR 14.9 a year earlier, hurt by Iliad’s new offer of 50GB of mobile data plus unlimited calls and SMS for EUR 7.99 a month and a series of similarly aggressive rival counter-offers intended to deflect the challenger.
Wind revenues fall most, TIM hurt least
Wind Tre, which leads the market in number of customers, saw the biggest losses in the quarter, with mobile service revenue down 10.7 percent year on year and a 6.8 percent annual decline in total mobile customers at its Wind and 3 Italia brands. Unlike TIM and Vodafone, Wind Tre has yet to introduce a discount brand to cushion the losses to Iliad and has the largest prepay customer base at over 86 percent of the total, according to the figures.
Vodafone’s large prepay base (82% of the total) has also left it exposed, as shown by a 10.0 percent year on year decline in mobile service revenues and a 924,000 fall in customers. The operator’s mobile ARPU fell to EUR 15.2 in Q3 from EUR 16.3 the previous year, as it sought to match its rivals’ high data offers via its main brand and new brand Ho.
The impact of Iliad’s offer on TIM appears to have been largely contained by its low-cost Kena brand, which reportedly hit the 1 million-customer milestone last month. TIM’s ARPU remained flat year on year at EUR 17.0 in Q3 and even inched up 3.4 percent sequentially, while total service revenues fell 2.7 percent. Customer numbers were down by 640,000 from a year ago to 22.74 million.
The above figures are based on Telecompaper’s database on the Italian mobile market, which is available for purchase. For more information, click here. For a customised analysis, please contact research@telecompaper.com.
