European Operator and Market Review Fourth Quarter 2010 PDF Free Download
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European Operator and Market Review
F th Q t 2010
F
our
th
Q
uar
t
er
2010
CCS Insight
1
European Operator and Market Review, Fourth Quarter 2010
Contents
•Summary
•Operator Insights
– Vodafone
–
O2/Telefonica
O2/Telefonica
– Deutsche Telekom
– France Telecom
– Everything Everywhere
–TIM
–
KPN
•Country Comparisons
– France
– Germany
– Italy
– Netherlands
– Spain
–UK
EOtCi
2
European Operator and Market Review, Fourth Quarter 2010
•
E
uropean
O
pera
t
or
C
ompar
i
sons
Vodafone: Analysis
Grou
p
or
g
anic service UK resur
g
ence, Challen
g
es
p
ersist in
•
Vodafone
'
s results for the third
quarter of its financial year
2010/11 were boosted by strong performance in the UK Turkey
pg
revenue up 2.5% to
£11.0 billion
g
service revenue up 7%,
ARPU up 6%
gp
Spain and Italy, service
revenue down again
•
Vodafones
results
for
the
third
quarter
of
its
financial
year
2010/11
were
boosted
by
strong
performance
in
the
UK
,
Turkey
and India, however on-going challenges in Southern Europe continue to weigh heavily on the group.
• Group organic service revenue grew by 2.5% to £10.96 billion, slightly above analyst expectations
• Vodafone upped its operating profit guidance to the "upper end" of the £11.8 billion to £12.2 billion range issued in November.
It stressed that this does not include the effect of the launch of the iPhone at Verizon Wireless
,
which is likel
y
to incur heav
y
,y
y
subsidy costs. It is notable that the projected impacts of such subsidies is so large that it may affect dividend payments to
Vodafone.
• Europe organic service revenue nudged up 0.2% to £7.66 billion. Strong data growth of 22.7% was mostly offset by lower
voice revenue resulting from the weak economic environment and regulatory pressures. Without the impact of mobile
termination rates (MTRs) gro th in the q arter o ld ha e reached 2 3%
termination
rates
(MTRs)
,
gro
w
th
in
the
q
u
arter
w
o
u
ld
ha
v
e
reached
2
.
3%
.
• As anticipated, Vodafone reported strong numbers for the UK. Service revenue was up 7% year-on-year on the back of an
almost 30% increase in data revenues, helped by iPhone sales. Vodafone reported strong contract net additions of 233,000
and that ARPU was up 6.3% to £21.7. Blended churn fell but remains high at 35.9%.
•
Vodafone continues to faces challenges in Southern Europe Despite tariff reductions in Spain service revenue fell 7 4% hit
Vodafone
continues
to
faces
challenges
in
Southern
Europe
.
Despite
tariff
reductions
in
Spain
,
service
revenue
fell
7
.
4%
,
hit
by economic and competitive pressure. ARPU was down more than 10% to €24.5. In Italy, Vodafone reported a 1.4% fall in
service revenue as it continues to suffer competitive pressures, notably from TIM.
• In Germany, service revenue growth of 1.1% was impacted by MTRs. Excluding this affect, growth would have been 2.3%,
boosted by the launch of iPhone in October. Service revenue was up 32% in Turkey.
• Vodafone reported service revenue growth of 9.3% in the Africa, Middle East and Asia Pacific region. India was the main
driver, with service revenue up 16.7% on the back of 8.7 million net additions.
• Vodafone reiterated that data remains central to its growth strategy. Smartphone penetration has now reached 17% of its
customer base, with a data attach rate of 46%.
5
European Operator and Market Review, Fourth Quarter 2010
• Group fixed revenue was up almost 5% to £0.88 billion.
Vodafone UK: Charts
30%
3 000
Vodafone UK Revenue (£M)
Vodafone UK Capex Ratios
15%
20%
25%
30%
1
,
500
2,000
2,500
3
,
000
40%
60%
80%
10
15
20
0%
5%
10%
0
500
1,000
,
0%
20%
40%
0
5
10
1H08/09
2H08/09
1H09/10
2H09/10
1H10/11
• Service revenue growth of 7% in 4Q10
• Growth from smartphones, new prepaid and data-roaming offers • Capex/subscriber ratio up from 7.5 to 9.4 year-on-year
• Capex/service revenue ratio up from 5.6 to 6.9 year-on-year
1H08/09 2H08/09 1H09/10 2H09/10 1H10/11
Service Revenue EBITDA Capex EBITDA Margin
1H08/09
2H08/09
1H09/10
2H09/10
1H10/11
Capex/Subscriber Capex/Service Revenue %
50
%
60%
70%
20,000
25,000
Subscribers (K)
Prepaid
50%
60%
70%
Churn
Prepaid % Postpaid
20%
30%
40%
%
5 000
10,000
15,000 Blended
Postpaid
20%
30%
40%
Ttl t b flt
Ch d 1 t i t
Postpaid
0%
10%
0
5
,
000
0%
10%
6
European Operator and Market Review, Fourth Quarter 2010
•
T
o
t
a
l
cus
t
omer
b
ase
fl
a
t
year-on-year
• Postpaid proportion up 5.2 points to 49.2% •
Ch
urn
d
own
1
percen
t
age po
i
n
t
year-on-year
• 1.3 percentage point drop in contract churn, prepaid up 2.6 points
Spain: Summary
Spanish Market Year
-
on
-
Year Comparisons 4Q10
Revenue ARPU Total
subscribers Churn Gross
additions % Non-voice
services
Telefonica -6.15% -8.24% 3.28% n/a -96.80% 2.29%
Spanish
Market
Year on Year
Comparisons
4Q10
Vodafone -7.76% -10.28% 3.39% -3.90% -0.97% 1.67%
Orange -0.25% -1.13% 0.51% -1.60% -3.29% 1.50%
Yoigo 51.94% n/a 51.59% n/a n/a n/a
year-on-year % year-on-year % year-on-year % % points year-on-year % % points
• Total revenue for Spain's four network operators fell 4% in 4Q10 as the tough economic difficulties continued to weigh
heavily. Vodafone and Telefonica recorded falls of 8% and 6% respectively, although Yoigo increased revenue by more
than 50% thanks to strong subscriber growth.
• Vodafone and Telefonica also recorded heavy falls in ARPU, both reporting €24.5 in 4Q10. Orange's ARPU was almost flat
year-on-year, but at €22 is still lower than its competitors'.
• Overall subscribers grew 4% in 2010, with Telefonica and Vodafone both recording a small single-digit percentage
increase. Postpaid subscribers grew 7%, helping the split increase from 54% to 56%. The number of prepaid subscribers
was unchanged year-on-year at 24.5 million.
• Non-voice services continue to represent around 20% of revenue in Spain, a figure below rates in most other mature
western markets. Telefonica, Vodafone and Orange each reported a small percentage point increase during 2010.
• Vodafone and Orange both managed a slight reduction in blended churn in 2010, reaching 26% and 27% respectively in
4Q10.
33
European Operator and Market Review, Fourth Quarter 2010
Spain: Charts
2 500
Revenue (€M)
30
Blended ARPU (€)
1 000
1,500
2,000
2
,
500
15
20
25
30
0
500
1
,
000
0
5
10
Telefonica Vodafone Orange Yoigo Telefonica Vodafone Orange
20,000
25,000
30,000
Subscribers (K)
6,000
7,000
8,000
Gross Additions
5,000
10,000
15,000
1,000
2,000
3,000
4,000
5,000
0
Telefonica Vodafone Orange Yoigo
0
Telefonica Vodafone Orange
34
European Operator and Market Review, Fourth Quarter 2010
