Market revenue growth accelerated to 3% in Q4, but it might never reach this level again, being helped by a never-to-be-repeated BT overlapping price rise

With price rises becoming more challenging in general, and superfast pricing under pressure in particular, maintaining/increasing ARPUs is becoming more difficult despite superfast volumes surging

Openreach’s ultrafast roll-out has accelerated, challenging Virgin Media and bringing the prospect of further price premia, but perhaps too late to be of significant benefit in 2019

Contents

Executive summary: High speed accelerates, but pricing under pressure

Market trends and outlook

• Product volume growth still slowing
• Market revenue growth benefits from BT’s last bumper price rise
• Underlying growth flatlining at all operators
• ARPU watch – struggling to grow, difficulties to come
• New customer pricing: Superfast getting tougher
• Existing customer pricing changes
• Q4 2018 trends: broadband – not a lot of net adds for anyone
• High speed broadband accelerates again
• Ultrafast roll-out…and copper withdrawal
• Q4 2018 trends: telephony – net adds very low
• Q4 2018 trends: pay TV – weak at the low end

Appendix

• Broadband subscribers
• Consumer revenue
• Wholesale price control and Openreach’s new discounted pricing
• Short-term pricing tactics
• Subscriber and subscriber ARPU growth
• Pricing outside the ‘big four’
• EU5 high speed comparison
• EBITDA and costs growth
• Additional selected pricing changes

List of charts/tables

Figure 1. Market net additions (000)

Figure 2. RGU and subscriber growth

Figure 3. RGU ARPU, volume and revenue growth

Figure 4. Subscriber ARPU, volume and revenue growth

Figure 5. Average RGU growth by operator

Figure 6. Consumer revenue growth by operator

Figure 7. Subscriber ARPU growth

Figure 8. RGU ARPU growth

Figure 9. Broadband entry level dual-play pricing, new customers (£/month)

Figure 10. Broadband high speed dual-play pricing, new customers (£/month)

Figure 11. Existing customer price increase impact periods

Figure 12. Broadband organic net adds (000)

Figure 13. Broadband organic subscriber growth

Figure 14. High speed net adds (000)

Figure 15. High speed penetration of broadband bases

Figure 16. Premises passed by Openreach (m)

Figure 17. Line rental net additions (000)

Figure 18. Line rental subscriber growth

Figure 19. Pay TV net additions (000)

Figure 20. Outlook for change in mobile trends in 2019 by operator

Figure 21. Broadband subscribers

Figure 22. Consumer revenue

Figure 23. Openreach wholesale pricing (£/month, excluding VAT)

Figure 24. New customer unlimited dual-play entry-level pricing (£/month)

Figure 25. New customer unlimited dual-play 30Mbps+ entry-level pricing (£/month)

Figure 26. Average subscriber growth by operator

Figure 27. Subscriber ARPU growth by operator

Figure 28. Unlimited broadband dual-play, new customer pricing (£/month)

Figure 29. High speed (30Mbps+) share of broadband, Q4 2017

Figure 30. High speed (30Mbps+) share of broadband

Figure 31. Cash operating costs growth

Figure 32. EBITDA margin

Figure 33. Selected recent and planned price changes for existing customers

Figure 34. Selected recent price changes