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01 Jul 2020
Trends Tracker: 2Q20 Mobile Pricing
Bouygues SA (EN:WBO), 0 | Swisscom AG (0QKI:LON), 0 | Telecom Italia S.p.A. (TIT:WBO), 0 | BT Group plc (BT.A:LON), 105 | Telefonica SA (TEF:WBO), 0 | Royal KPN NV (KPN:WBO), 0 | Vodafone Group Plc (VOD:LON), 66.8 | Deutsche Telekom AG (DTE:WBO), 0 | Orange SA (ORA:WBO), 0 | Tele2 AB Class B (NCYD:FRA), 0 | Orange Belgium SA (OBEL:BRU), 0 | Elisa Oyj Class A (ELISA:HEL), 0 | Telia Company AB (TELIA1:HEL), 0 | Telenor ASA (TEQ:FRA), 0 | United Internet AG (UTDI:WBO), 0 | Proximus SA (PROX:WBO), 0 | freenet AG (FNTN:WBO), 0 | 1&1 AG (DRI:WBO), 0 | Telefonica Deutschland Holding AG (O2D:WBO), 0 | Masmovil Ibercom (MAS:BME), 0 | Cellnex Telecom S.A. (CLNX:WBO), 0 | Infrastrutture Wireless Italiane S.p.A. (WI8:BER), 0 | Altice USA, Inc. Class A (15PA:FRA), 0 | Airtel Africa Plc (AAF:LON), 108 | Liberty Global Ltd. Class A (LBTYAN:MEX), 0
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Trends Tracker: 2Q20 Mobile Pricing
Bouygues SA (EN:WBO), 0 | Swisscom AG (0QKI:LON), 0 | Telecom Italia S.p.A. (TIT:WBO), 0 | BT Group plc (BT.A:LON), 105 | Telefonica SA (TEF:WBO), 0 | Royal KPN NV (KPN:WBO), 0 | Vodafone Group Plc (VOD:LON), 66.8 | Deutsche Telekom AG (DTE:WBO), 0 | Orange SA (ORA:WBO), 0 | Tele2 AB Class B (NCYD:FRA), 0 | Orange Belgium SA (OBEL:BRU), 0 | Elisa Oyj Class A (ELISA:HEL), 0 | Telia Company AB (TELIA1:HEL), 0 | Telenor ASA (TEQ:FRA), 0 | United Internet AG (UTDI:WBO), 0 | Proximus SA (PROX:WBO), 0 | freenet AG (FNTN:WBO), 0 | 1&1 AG (DRI:WBO), 0 | Telefonica Deutschland Holding AG (O2D:WBO), 0 | Masmovil Ibercom (MAS:BME), 0 | Cellnex Telecom S.A. (CLNX:WBO), 0 | Infrastrutture Wireless Italiane S.p.A. (WI8:BER), 0 | Altice USA, Inc. Class A (15PA:FRA), 0 | Airtel Africa Plc (AAF:LON), 108 | Liberty Global Ltd. Class A (LBTYAN:MEX), 0
- Published:
01 Jul 2020 -
Author:
Alexandre Roncier -
Pages:
32
Our quarterly Trends Tracker compiles over 600 mobile price points across 11 markets, reviewing pricing trends over the past 4 years to help inform our outlook for future MSR growth. Combined with our other sector periodicals, Valuation Station (monthly consensus revisions), and European Phonebook (quarterly review of the sector), we use this to identify inflection points in individual markets. Together with our flagship thematic reports, STAMP 2020 and the 1, 3 and 5-year view, this framework seeks to provide investors with a range of ST and LT investment opportunities.
Mobile pricing debate is more complicated than it seems
Our work shows that median mobile prices increased +6.5% in Europe in 2Q20 with frontbook prices now 17% above last year''s backbook ARPUs. However this doesn''t tell the full story as (1) QoQ pricing saw the first sequential deterioration since 1Q19; (2) there is now enough data headroom to stream an extra 1h of Netflix every day; (3) pricing in the key 5-30GB segment fell -16% yoy; and (4) incumbents continue to raise prices, but challengers are maintaining their discounts to continue to take share. Excess data supply, and the low marginal cost in supplying more GBs, still leave us cautious on MSR growth. We forecast a -3.2% mobile service revenue decline in 2Q20 (down from -1.3% in 1Q20) as COVID-19 takes its toll.
There''s still a wide variance between ''good'' and ''bad'' markets
France continues to improve following the hefty promotional levels of last year, despite a slight sequential deterioration (Year of the Rat with ILD+ EN+ and ATC+). Norway, Finland (ELISA+ Irresistible Force Meets Immovable Object?) and Sweden (TEL2B+ The Winner Takes It All) continue to retain some ''safe haven'' status as should Germany (O2D+ Appetite for construction?), Switzerland (SRCG+) and the Netherlands to a lesser degree. Conversely, the UK (BT/A- How bad could it be?) screens poorly, following a rapid growth in data allowances and...