Data-thirsty mobile owners burn through 5GB a month

Three sees 50% YoY increase - Google and Facebook to blame

CK Hutchison’s Three network says each customer burns through 5GB of mobile data a month, on average, and around half of that is YouTube traffic*.

Three carries 42 per cent of the UK’s mobile bits, and it has seen an increase of 1.7GB per customer per month from last year. The UK network disclosed its financial results today along with some interesting data points on voice and roaming.

With consumer data demand exploding, all mobile networks have to run to stand still, and Three UK’s limited spectrum options mean it can’t afford to engage in price wars any more.

“Three played the role of a challenger keeping down prices,” said Three UK CEO David Dyson, “but our badge of being a maverick is one we no longer wear. We have increasing constraints in our ability to be the maverick - we’re spectrum constrained and therefore capacity constrained”.

ARPU was down, and Three talked up margins-per-user instead. The network spent more £321m on network capex last year than it did in 2014, which Dyson said was down to an expanded rollout of 4G and capacity improvements. There were 137,000 net additions, so both average revenue per user and acquisition rates are slowing.

Instead of competing aggressively on price and value, as it did for years, Three has focused on boosting customer satisfaction ratings. Ofcom says the mobile network received far fewer complaints than EE and Vodafone, and RootMetrics rates it the most reliable of UK operators with the fewest drops calls. (EE trounces the rest on speed, where Three comes bottom.) At least Three UK now has 800Mhz spectrum to work with, which it can use for 4G and better indoor coverage.

Three is also gearing up to block adverts across its networks, another part of its push to make itself customer-friendly. The block could include apps as well as ads that are on show in web pages.

VoLTE quietly rolled out last year – Three brands it as “4G Super Voice” – and the network says around 1.5 million customers have VoLTE-compliant handsets.

Three says its “Feel at Home” roaming initiative, which pre-empted Brussels’ pricing intervention, has now saved punters £2.5bn in 2015 alone. Depending on your tariff, it’s still cheaper to use data and voice abroad on Three than under the EU-mandated pricing. Feel at Home users also use a lot more data abroad, not surprisingly, with the average roamer burning through 3G abroad. (An amount that has almost doubled in the past year).

“inevitably the cost of data will increase,” Dave Dyson told financial analysts today, and sating data demand is one of the reasons Three UK’s owner, CK Hutchison (it lost the Whampoa last year), wants to take over Telefonica’s O2.®

Bootnote

*Streaming makes up 60 per cent of data traffic, and “most of that is YouTube”, Dyson explained. Facebook makes up 18 per cent of traffic, and Snapchat and Facebook’s Instagram service make up three per cent each.

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