UK mobile market Q1 2017: EE leads the way

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UK mobile market Q1 2017: EE leads the way

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UK mobile market Q1 2017: EE leads the way
UK mobile service revenue growth continued to improve, with reported growth reaching 0.4%. The rate of improvement has, however, started to slow. Pricing remains solid and data traffic continues to grow healthily
Looking forward, there will be some rare regulatory relief from next quarter, as the regulated MTR cuts drop to de minimis levels, helping service revenue growth by about 0.5ppts, and there is a brief respite from the impact of regulated EU roaming cuts before the full effect of their abolition on 15 June. Q3 will not be so comfortable, with the EU roaming abolition taking full effect during the main holiday season
All the operators have rolled out RPI-linked price rises in Q2 for existing customers, perhaps encouraged by RPI being so much higher than recent years. We estimate a full impact on service revenue of around 1-2%, with the net impact on the trend for EE and O2 about half this given their (more modest) increases last year
The short/medium term outlook thus remains healthy, with the above price increases likely to more than compensate for roaming cuts in the latter part of the year, pricing remaining firm, and data volume growth levelling out at a very healthy 45% per annum
Looking further forward, while some of the claims of 5G evangelists should be taken with more than a pinch of salt, the launch of 5G could still be disruptive simply due to the introduction of copious capacity using the large blocks of spectrum in the 3.4-3.8GHz range. Hence the results of the upcoming auction (and H3G’s use of its recently acquired spectrum) will be key for the sector post-2020