1Tariff Plans Benchmarking – 2H15
Voice and MBB Services
Tariff Plans Benchmarking
Europe, US, Middle East
Second Half 201...
2Tariff Plans Benchmarking – 2H15
Arthur D. Little presents the 4th Edition of MNOs tariff plans benchmarking study
Situat...
3Tariff Plans Benchmarking – 2H15
Agenda
1 Context & Methodology
2 Executive Summary
3 Tariff Benchmarking per Country
Nor...
4Tariff Plans Benchmarking – 2H15
The mobile industry keeps experiencing a generalized increase in both connections and tr...
5Tariff Plans Benchmarking – 2H15
America
Voice min/month/avg.user
Average Revenue per User shows a decreasing trend, whil...
6Tariff Plans Benchmarking – 2H15
After a steep increase between 2008 and 2014, Mobile Connections will keep growing smoot...
7Tariff Plans Benchmarking – 2H15
5
0
50
45
40
35
30
25
20
15
10
2021202020192018201720162015
 Global Mobile Traffic, dri...
8Tariff Plans Benchmarking – 2H15
1 Context and Methodology - Global Mobile Traffic
Source: Cisco VNI Mobile, 2015
 Smart...
9Tariff Plans Benchmarking – 2H15
Arthur D. Little uses a proven methodology to analyze the tariff landscape in order to
b...
10Tariff Plans Benchmarking – 2H15
Agenda
Tariff Plans Benchmarking for Voice and Mobile Broadband Services
1 Context & Me...
11Tariff Plans Benchmarking – 2H15
 Decrease in prices is still due to a strong competition mainly based on “commoditized...
12Tariff Plans Benchmarking – 2H15
2 Executive Summary - 3G vs. LTE data plans composition: Country comparison
It can be o...
13Tariff Plans Benchmarking – 2H15
Overview of Analyzed Markets, by Region (1/3)
2 Executive Summary
Main considerations o...
14Tariff Plans Benchmarking – 2H15
Overview of Analyzed Markets, by Region (2/3)
2 Executive Summary
Main considerations o...
15Tariff Plans Benchmarking – 2H15
Overview of Analyzed Markets, by Region (3/3)
2 Executive Summary
Main considerations o...
16Tariff Plans Benchmarking – 2H15
Undervalued by
> 50%
25-50%
10-25%
Overvalued by
10-25%
25-50%
>50%
+ / - 10%Bahrain
Ir...
17Tariff Plans Benchmarking – 2H15
10 20 30 40 50 60 70 80 90 100 110 120 130 140 150
0 €
2 €
4 €
6 €
8 €
10 €
12 €
14 €
1...
18Tariff Plans Benchmarking – 2H15
10 15 20 25 30 35 40 45 50
0 €
5 €
10 €
15 €
20 €
25 €
30 €
35 €
0 1 2 3 4 5 6 7 8 9 10...
19Tariff Plans Benchmarking – 2H15
2 Executive Summary - Average GB Price: Country comparison
Percentage evolution in coun...
20Tariff Plans Benchmarking – 2H15
2 Executive Summary - Average GB Size and Price: Country comparison
Both LTE data and L...
21Tariff Plans Benchmarking – 2H15
2 Executive Summary - Trends in 4 to 3 MNO Markets – Focus on Ireland
After completion ...
22Tariff Plans Benchmarking – 2H15
Agenda
Tariff Plans Benchmarking for Voice and Mobile Broadband Services
1 Context & Me...
23Tariff Plans Benchmarking – 2H15
2 Executive Summary – Average GB Price: Country comparison
Average GB Price per country...
24Tariff Plans Benchmarking – 2H15
2 Executive Summary – Average GB Price: Country comparison
Average GB Price per country...
25Tariff Plans Benchmarking – 2H15
2 Executive Summary – Average GB Price: Country comparison
Average GB Price per country...
26Tariff Plans Benchmarking – 2H15
2 Executive Summary – Average GB Price: Country comparison
Average GB Price per country...
27Tariff Plans Benchmarking – 2H15
2 Executive Summary – Average GB Price: Country comparison
Average GB Price per country...
28Tariff Plans Benchmarking – 2H15
2 Executive Summary – Average GB Price: Country comparison
Average GB Price per country...
29Tariff Plans Benchmarking – 2H15
2 Executive Summary – Average GB Price: Country comparison
Average GB Price per country...
30Tariff Plans Benchmarking – 2H15
2 Executive Summary – Average GB Price: Country comparison
Average GB Price per country...
31Tariff Plans Benchmarking – 2H15
Agenda
Tariff Plans Benchmarking for Voice and Mobile Broadband Services
1 Context & Me...
32Tariff Plans Benchmarking – 2H15
LTE BENCHMARK: Data plans pricing strategies (Price per GB vs country average)
2 Execut...
33Tariff Plans Benchmarking – 2H15
28% 38% 29% 29% 25% 14% 35% 12% 14% 13% 31% 31% 34% 16% 32% 37% 31%
LTE BENCHMARK: Voic...
34Tariff Plans Benchmarking – 2H15
Agenda
1 Context & Methodology
2 Executive Summary
3 Tariff Benchmarking per Country
35Tariff Plans Benchmarking – 2H15
3 Key
Key
The following slides show competitors positioning in terms of data allowance,...
36Tariff Plans Benchmarking – 2H15
Agenda
1 Context & Methodology
2 Executive Summary
3 Tariff Benchmarking per Country
3....
37Tariff Plans Benchmarking – 2H15
3 Austria - Country Summary
Austria
 Market penetration of mobile broadband reached 67...
38Tariff Plans Benchmarking – 2H15
10060
R² = 0,862
R² = 0,8246
0 €
10 €
20 €
30 €
40 €
50 €
60 €
70 €
0 5 10 15 20 25 30 ...
39Tariff Plans Benchmarking – 2H15
2H13 2H14 2H15
4G
3G 2.0 2.0
4G 1.5
3G 1.0 2.0 1.5
4G
3G 1.8 1.8 1.5
4G 1.5
3G 1.6 1.9 ...
40Tariff Plans Benchmarking – 2H15
R² = 0,739
R² = 0,8779
0 €
10 €
20 €
30 €
40 €
50 €
60 €
70 €
80 €
90 €
100 €
0 1 2 3 4...
41Tariff Plans Benchmarking – 2H15
2H13 2H14 2H15
4G
3G 34.9
4G 11.5
3G 23.0
4G
3G
4G 11.5
3G 28.9
Average
Operator
3 1
1
...
42Tariff Plans Benchmarking – 2H15
3 Denmark - Country Summary
Denmark
 Mobile broadband rates in Denmark are much higher...
43Tariff Plans Benchmarking – 2H15
R² = 0,922
R² = 0,9395
0 €
10 €
20 €
30 €
40 €
50 €
60 €
0 2 4 6 8 10 12 14 16 18 20 22...
44Tariff Plans Benchmarking – 2H15
2H13 2H14 2H15
4G 6.6
3G 13.3
4G 13.3
3G
4G 6.6
3G
4G 9.2 9.2 4.0
3G
4G 9.7 9.2 5.3
3G ...
45Tariff Plans Benchmarking – 2H15
VOICE + DATA PLANS: Strategy, prices and GB included in the offers analysis
3 Denmark -...
46Tariff Plans Benchmarking – 2H15
R² = 0,9625
R² = 0,9923
0 €
2 €
4 €
6 €
8 €
10 €
12 €
14 €
16 €
18 €
0 1 2 3 4 5 6 7 8 ...
47Tariff Plans Benchmarking – 2H15
3 France - Country Summary
France
 The rollout of LTE mobile networks started relative...
48Tariff Plans Benchmarking – 2H15
Free does not offer Data Plans (only voice
+ data) but theSIM card could also be used
o...
49Tariff Plans Benchmarking – 2H15
2H13 2H14 2H15
4G 5.7 3.1 3.1
3G
4G 4.2 2.0
3G
4G 2.5 3.7 3.7
3G
4G
3G
4G 4.1 3.5 3.2
3...
50Tariff Plans Benchmarking – 2H15
R² = 0,3959
R² = 0,3222
0 €
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20 €
30 €
40 €
50 €
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70 €
80 €
0 2 4 6 8 10 12 14 ...
51Tariff Plans Benchmarking – 2H15
2H13 2H14 2H15
4G 15.5 15.0 25.0
3G 15.0
4G 20.0
3G
4G
3G
4G
3G
4G 15.5 15.0 22.5
3G 15...
52Tariff Plans Benchmarking – 2H15
3 Germany - Country Summary
Germany
 Market penetration of mobile broadband reached 65...
53Tariff Plans Benchmarking – 2H15
R² = 0,6366
R² = 0,8572
0 €
5 €
10 €
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30 €
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50 €
0 1 2 3 4 ...
54Tariff Plans Benchmarking – 2H15
2H13 2H14 2H15
4G 9.0 13.0
3G 15.0 15.0 15.0
4G
3G 15.0 15.0 15.0
4G 20.0 12.5 12.5
3G
...
55Tariff Plans Benchmarking – 2H15
R² = 0,8727
R² = 0,9376
0 €
10 €
20 €
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50 €
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70 €
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90 €
100 €
0 1 2 3 ...
56Tariff Plans Benchmarking – 2H15
2H13 2H14 2H15
4G 20.0 30.0 27.0
3G 20.0 20.0
4G
3G 20.0 22.5 21.3
4G 42.4 26.6 20.0
3G...
57Tariff Plans Benchmarking – 2H15
3 Ireland - Country Summary
Ireland
 Both mobile broadband penetration (82% as of Dece...
58Tariff Plans Benchmarking – 2H15
R² = 0,6097
R² = 0,6754
0 €
10 €
20 €
30 €
40 €
50 €
60 €
70 €
0 1 2 3 4 5 6 7 8 9 10 1...
59Tariff Plans Benchmarking – 2H15
2H13 2H14 2H15
4G
3G 8.0 8.0
4G 11.0 20.0
3G 7.2 7.2 15.0
4G
3G
4G
3G
4G 11.0 20.0
3G 7...
60Tariff Plans Benchmarking – 2H15
R² = 0,167
R² = 0,5246
0 €
5 €
10 €
15 €
20 €
25 €
30 €
35 €
40 €
45 €
50 €
0 1 2 3 4 5...
61Tariff Plans Benchmarking – 2H15
2H13 2H14 2H15
4G 32.5 23.8 30.0
3G
4G
3G
4G 26.8 25.0
3G
4G
3G 31.3 23.8
4G 29.6 24.2 ...
62Tariff Plans Benchmarking – 2H15
3 Italy - Country Summary
Italy
 LTE networks deployment is progressing quickly, with ...
63Tariff Plans Benchmarking – 2H15
R² = 0,515
R² = 0,6257
0 €
5 €
10 €
15 €
20 €
25 €
30 €
0 1 2 3 4 5 6 7 8 9 10 11 12 13...
64Tariff Plans Benchmarking – 2H15
2H13 2H14 2H15
4G 5.0 5.0 4.0
3G 4.0 4.0
4G 3.3 3.3
3G
4G 3.0 2.6
3G 3.0
4G 2.7 2.7 1.5...
65Tariff Plans Benchmarking – 2H15
R² = 0,2384
R² = 0,2019
0 €
10 €
20 €
30 €
40 €
50 €
60 €
70 €
80 €
0 1 2 3 4 5 6 7 8
V...
66Tariff Plans Benchmarking – 2H15
2H13 2H14 2H15
4G
3G
4G
3G
4G 2.9
3G
4G 1.6
3G 1.5
4G 1.6 2.9
3G 1.5
Operator
Average
2...
67Tariff Plans Benchmarking – 2H15
3 Netherlands - Country Summary
Nether-
lands
 Reached 100% in both mobile broadband p...
68Tariff Plans Benchmarking – 2H15
R² = 0,9217
R² = 0,8201
0 €
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0 1 2 3 4 ...
69Tariff Plans Benchmarking – 2H15
4G
3G
4G
3G
4G
3G
4G
3G
4G
3G
Average
18.0 15.7
20.0 15.0
17.5
16.0
Operator 1H14 2H15
...
70Tariff Plans Benchmarking – 2H15
R² = 0,7251
R² = 0,6444
0 €
5 €
10 €
15 €
20 €
25 €
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0 1 2 3 4 ...
71Tariff Plans Benchmarking – 2H15
4G
3G
4G
3G
4G
3G
4G
3G
4G
3G
25.0 30.0
16.3
Average
Operator 1H14 2H15
16.5
22.3 23.9
...
72Tariff Plans Benchmarking – 2H15
3 Spain - Country Summary
Spain
 Both LTE coverage (76%) and mobile broadband penetrat...
Pricing Benchmark 4^Edition 2015
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Pricing Benchmark 4^Edition 2015

Published on: Mar 4, 2016
Source: www.slideshare.net


Transcripts - Pricing Benchmark 4^Edition 2015

  • 1. 1Tariff Plans Benchmarking – 2H15 Voice and MBB Services Tariff Plans Benchmarking Europe, US, Middle East Second Half 2015, 4th Edition December 2015 Arthur D. Little www.adlittle.com
  • 2. 2Tariff Plans Benchmarking – 2H15 Arthur D. Little presents the 4th Edition of MNOs tariff plans benchmarking study Situation Questions Analysis Limitations Overview  The benchmark analysis was executed considering a set of comparable Voice and Data tariff plans (Unlimited Voice and Sms, no device subsidies, consumer segment)  The study scope is referred to 17 Countries (USA, Western Europe and Middle East)  The study considers a snapshot at October 2015, tracing trends back to December 2013  What are the different price strategies among MNOs for each analyzed country?  Are there different pricing trends and strategies across different countries?  Are plans differentiated in terms of Value Added Services offered ?  What is the current offer for 3G vs. LTE? Is there any specific trend?  Arthur D. Little carried out the 4th Edition MNOs Tariff Plans desk study to analyze and benchmark the trends and the “state of the art” of tariff plan landscape for Data and Voice commercial offers
  • 3. 3Tariff Plans Benchmarking – 2H15 Agenda 1 Context & Methodology 2 Executive Summary 3 Tariff Benchmarking per Country North America Western Europe Middle East USA Austria Netherlands Bahrain Denmark Spain KSA France Sweden Kuwait Germany UK Oman Ireland Qatar Italy UAE
  • 4. 4Tariff Plans Benchmarking – 2H15 The mobile industry keeps experiencing a generalized increase in both connections and traffic, remarkably evident in smartphone and video data, yet not paired with an improvement in ARPU 1 Context and Methodology – Global Market Trends Global Market Trends Source: 1) Ericsson Mobility Report Nov 2014, Nov. 2015; 2) Cisco VNI Mobile, 2015; 3) Merrill Lynch Bank of America Global Wireless Matrix - Global Selection of Countries among APAC, Europe, North America, Emerging Asia, EEMEA e LATAM Regions (Note: Dollar - Euro exchange rate 0.896 at 31.09.2015) Devices & Uses 71% of mobile traffic on smartphones with a 48% CAGR foreseen until 2019 (2) Connections 7.4 Bln worldwide mobile connections by end of 2015 (1) Global ARPU and Smartphone Traffic 700 1.400 1.000 212325 +41% CAGR2013 2014 2015 ~5 EB/mth by 2015, with voice constituting a small part (<250 PB/mth) of overall traffic (1) Mobile Traffic Avg. Traffic per Active Smartphone (MB/month) (1) Industry studies show a generalized increase in mobile connections (7.4 Bln as of 2015) and in mobile traffic (~5 EB/mth), mostly generated by smartphones (71%) and driven by video streaming (57%). These trends are, however, accompanied by a decreasing tendency in Average Revenue per User. -7% Avg. ARPU (€/month) (3) 4% expected CAGR in worldwide mobile connections between 2014 and 2020 (1) >70% predicted mobile traffic CAGR in the Middle East & Africa regions between 2014 and 2019 (2) 57% of data traffic is generated by video, a ratio expected to grow to 72% by 2019 (2)
  • 5. 5Tariff Plans Benchmarking – 2H15 America Voice min/month/avg.user Average Revenue per User shows a decreasing trend, while voice consumption maintains a slightly increasing tendency 31 35 19 31 1519 44 262323 32 1817 31 24 19 2731 17 26 1517 43 24 28 18 27 1516 232017 -6,4% -0,5% -1,6% -8,6% -7,2% -5,7% -7,1% -0,7% -2,2% -5,1% -4,7% -6,1% -3,2% -7,5% +6,3%-9,6% 153110 338 187 241 154156179 130 229222 176 136 13788 348 261 189 298 175171 240 180167 -5,3% +6,8% 925929 -1,7% +4,6% -6,8% +10,3% +0,4%+3,1% +4,4% +1,5% -10,5% -0,2% +7,3% 1 Context and Methodology - ARPU and average Voice usage trends for analyzed Countries 2012 2014 20152013 Source: Merrill Lynch Bank of America Global Wireless Matrix 2Q15, Middle Eastern TRA’s websites, Arthur D. Little Analysis (Note: Dollar – Euro exchange rate 0.896 at 31.09.2015) USAAustria Denmark France Germany Spain Sweden UKItaly UAEQatar OmanKuwaitKSABahrain Western Europe Middle EastAmerica ARPU/month (€) Western Europe Middle East … CAGR Netherlands USAAustria Denmark France Germany Spain Sweden UKItaly UAEOmanBahrainNetherlands
  • 6. 6Tariff Plans Benchmarking – 2H15 After a steep increase between 2008 and 2014, Mobile Connections will keep growing smoothly, with developing countries holding for most connections, especially in African & Asian regions 1 Context and Methodology - Global Mobile Connections 9,08,8 8,5 8,2 7,9 7,5 7,1 6,7 6,4 6,0 5,3 4,6 4,0 20122011201020092008 20202019201820172016201520142013 Mobile Connections by Region(2) (3Q15 - Mln) 995 1.300 1.395 955 385 730 395 545580 Central& Eastern Europe Middle East APAC*North America Western Europe LATAM* ChinaAfrica India Source: 1) The Mobile Economy 2015 – GSMA (excluding M2M); 2) Ericsson Mobility Report Nov. 2015 * LATAM= Latin America; APAC = Asia-Pacific excluding China and India 10% CAGR 2008-2014 4% CAGR 2014-2020  Mobile Connections are forecasted to reach 9 billion by 2020 (growing at a ~4% CAGR)  African and Asian regions hold the most Mobile Connections (cumulatively 4.6 billion)
  • 7. 7Tariff Plans Benchmarking – 2H15 5 0 50 45 40 35 30 25 20 15 10 2021202020192018201720162015  Global Mobile Traffic, driven by smartphone data, is expected to grow to ~50 EB/month by 2021  Traffic should increase with particular intensity in the Middle East and Africa regions (72% CAGR) Mobile traffic is booming. It is expected to grow to ~25 EB/mth by 2019 and ~50 EB/mth by 2021 (nearly a tenfold increase since 2015). The highest CAGR is forecasted in Middle East and Africa 1 Context and Methodology - Global Mobile Traffic Global Mobile Traffic (both voice and data) (1) Source: 1) Ericsson Mobility Report Dec. 2015; 2) Cisco VNI Mobile, 2015 Data: mobile PCs, tablets and mobile routers Data: smartphones Voice Global Mobile Data Traffic by Region (2) 20 25 0 5 10 15 Western Europe+48% ME & Africa +72% Latin America +59% C & E Europe +71% 2014 2,5 North America +47% Asia Pacific +58% 2019 24,3 2018 16,1 2017 4,2 6,8 2015 10,7 2016 Exabytes per MonthExabytes per Month Relatively steady and low traffic for voice usage while data usage strongly increases Region CAGR 2014-’19
  • 8. 8Tariff Plans Benchmarking – 2H15 1 Context and Methodology - Global Mobile Traffic Source: Cisco VNI Mobile, 2015  Smartphone generated traffic - 18 EB/mth by 2019 - is expected to drive the tenfold overall increase  Video streaming - already accounting for 57% of mobile traffic is forecasted to reach 72% by 2019 Global Mobile Data Traffic by Device Type 25 20 15 10 5 0 Nonsmart phones +27% Smart phones +60% Laptops +22% Tablets +83% M2M +103% 2019 24,3 2018 16,1 2017 10,7 2016 6,8 2015 4,2 2014 2,5 Exabytes per Month CAGR 2014-’19 Global Mobile Data Traffic by Type of Usage 10 0 20 5 15 25 16,1 2018 24,3 2016 6,8 2015 4,2 2014 2,5 File Sharing +76% Audio Streaming +53% Web/Data/VoIP +39% Video +66% 20192017 10,7 Exabytes per Month Type of Usage The sharp increase in Mobile Traffic, is foreseen to be mostly generated by smartphones and to be primarily utilized for video streaming CAGR 2014-’19
  • 9. 9Tariff Plans Benchmarking – 2H15 Arthur D. Little uses a proven methodology to analyze the tariff landscape in order to benchmark Data and Voice Tariff plans We executed the benchmark analysis in 3 macro phases Identify relevant Markets and MNOs Identify comparable Tariff plans Analysis of Tariff plans 1 2 3 ■ Markets in scope: 17 countries (US, W. Europe, Middle East) ■ Operators in scope: 58 MNOs ■ Comparable tariff plans were selected according to the following criteria: ̶ Data plans criteria - no dongle included and GB allowances*: 339 tariff plans (out of which 220 Postpaid, 100 Prepaid and 19 both Pre and Postpaid) ̶ Voice + Data plans criteria - unlimited voice/sms, no device included, GB allowances*: 193 tariff plans (out of which 171 Postpaid, 14 Prepaid and 8 both Pre and Postpaid) ■ Tariff plans were compared to identify, both for Smartphone and Data selected plans: ̶ Analysis of GB price consistency among MNOs for each country ̶ Analysis of other offered services ̶ Analysis of 3G vs. LTE offer and premium price for LTE 1 Context and Methodology - Methodology overview *Scope of the analysis include plans with data allowance > 500 MB per month
  • 10. 10Tariff Plans Benchmarking – 2H15 Agenda Tariff Plans Benchmarking for Voice and Mobile Broadband Services 1 Context & Methodology 2 Executive Summary 2.1 Main results per Country per MNO 2.2 Main results per Country per TLC Group 3 Tariff Benchmarking per Country
  • 11. 11Tariff Plans Benchmarking – 2H15  Decrease in prices is still due to a strong competition mainly based on “commoditized” mobile services (voice or data) or on the customer acquisition strategy of “low cost” players  The rapid increase of the availability of smart devices and the OTTs’ offering of new services and application generate new data traffic needs and drive a general increase in data allowance by operators  LTE tariffs almost completely replaced the ‘‘3G only’’ and some Operators exploit the traffic explosion introducing new “data-centric” offers and commercial models to improve revenues, retain customers and monetize network investments. Such offers succeed only if paired with reliable LTE network  Ongoing and expected market consolidation with reduction of the number of MNOs from 4 to 3 would lead to possible change in the tariff trend ̶ Both LTE data and LTE voice + data plans keep showing a generalized increasing trend in average allowance size ̶ The only countries in which this trend is not evident are Germany, where the wireless market is fairly static after the 4 to 3 consolidation, and Bahrain, where competition and therefore new offering seems to be focused on mid-sized data bundles for home-usage As Data usage is booming, MNOs start competing on offer differentiation rather than on pricing 2 Executive Summary Main considerations on Offers - ADL Benchmark Source: Arthur D. Little Analysis ̶ In countries where the offering is based on commoditized mobile services (voice or data) prices tend to be decreasing (e.g. Italy, Spain) ̶ Low cost MNOs (such as, Yoigo in Spain, Free in France, Tele2 in Netherlands) have been shown to drive down the overall market pricing ̶ Longer committments vs. discounts practice to retain customers (mostly in EU, while in ME committment is generally linked to device subsidies) ̶ In Ireland, after the 3 and O2 merger, tariff prices have increased in several data allowance segment, mainly on data plans ̶ In Germany the ongoing merger between O2 and E-Plus reduced the number of MNOs from 4 to 3 and may lead to competitive implications ̶ Other mergers are expected both in the Italian market (between H3G and Wind) and in the UK market (between 3 UK and O2) ̶ T-Mobile USA is pursuing a niche positioning through zero-rating on both audio and video streaming, open to every provider without restrictions ̶ The Vodafone group, extensively includes VAS such as Spotify or Netflix in order to promote a premium network experience (speed & coverage) ̶ The USA market shows a family oriented approach to mobile services (e.g. share plans), in Europe, instead, the more personal approach, leads some MNOs to focus on multi-device offering for single customers (e.g. Wind Magnum offering 1 extra data-SIM in addition to voice + data plans)
  • 12. 12Tariff Plans Benchmarking – 2H15 2 Executive Summary - 3G vs. LTE data plans composition: Country comparison It can be observed how, for Western Europe and USA, the progressive shift from “3G Only” to LTE commercial offers, has not supported a growth of ARPU nor a growth of tariff pricing Data Tariffs: Evolution in LTE Plans %, ARPU, Adj. Avg. €/GB, Avg. GB, by Country Sources: 1) Arthur D. Little Analysis; 2) The Economist - Big Mac Index; 3) Merrill Lynch Bank of America Global Wireless Matrix; 4) Comreg (Ireland ARPU - data on 2015 expected not available) Notes: countries depicted are the ones included since the first edition of the study (Bahrain, Oman, KSA, Kuwait, Netherlands, Oman, Qatar and UAE not depicted) Total Offers 2H13 2H152H14 2H13 2H152H142H13 2H152H142H13 2H152H142H13 2H152H142H13 2H152H14 2H13 2H152H14 2H13 2H152H14 2H13 2H152H14 2H13 2H152H14 2H13 2H152H14 50€ 45€ 40€ 30 4428 25 3817 11 88 8 44 5 66 22 4318 11 1010 5 33 133 8580 13 1918 Evolution in Share of LTE Plans (1) Evolution in Share of ‘‘3G Only’’ Plans (1) Adjusted Average Revenue Per User (2,3,4) Adjusted Average €/GB for LTE plans (1,2) xx Average GB included for LTE plans (1) 29 2520 € € € 0 5 10 15 20 25 30 0 10 20 30 0 10 20 30
  • 13. 13Tariff Plans Benchmarking – 2H15 Overview of Analyzed Markets, by Region (1/3) 2 Executive Summary Main considerations on Offers - ADL Benchmark - Western Europe Austria All plans offer 4G connectivity, in addition to 3G, at no extra fee with generalized decrease in price per GB, paired with an increase in the size of data allowances. TIM and Vodafone are positioned as the prime players, with premium priced tariffs running on reliable networks, and generally including Value Added Services such as media on demand, music, gaming and news. Wind and Three hold a no frills value-for-price positioning. The 2 operators announced an agreement to form a joint venture of their telecoms businesses, which would reduce the number of MNOs from 4 to 3 and lead to possible competitive implications. Italy Decrease in plans or significant increase in data allowance for the same price Market leaders’ strategies: Tele2 (price leader) has further lowered prices, Telia (mid- to-high prices) has doubled data allowances. The two smaller players (Three and Telenor) have reliable LTE network, and apply mid-to-high tariffs Value added services: Telia offers Spotify subscriptions with contracts, Tele2 offers Viaplay, 3 offers free data for music streaming Germany Sweden Converging pricing and data allowances for most contracts Strong demand for data usage by customers - both at home and on-the-move Value added services: Telia offers entertainment services (HBO, Storytel, Spotify), Telenor productivity services (cloud storage, Office 365), TDC leisure services (TV-streaming), 3 offers Netflix with its larger data bundles Denmark Prices have stabilized with an increase of data allowance. ARPU increase due to consumers exceeding their data package Established MNOs compete through main brands, but also through low cost second brands - Sosh for Orange, Red for SFR, B&You for Bouygues - while Free focuses on a unique value-for-money plan including unlimited voice and 50GB of 4G data (but only 3GB on 3G) Value added services are widely included: music, TV, cloud storage, international roaming, Wifi hotspot, etc. UK The acquisition of O2 Ireland by 3 significantly increasing 3’s market share Tariff prices have marginally increased in the ‘‘data only’’ market, while pricing per GB increased for unlimited voice + data plans. 3G tariffs remain widespread in the ‘‘data only’’ market Differentiation between operators is mostly evident for tariffs that include low data bundles Ireland France Generalized increase in the size of data allowances, paired with an increase in prices, with the exception of Yoigo that presents an aggressive low-price strategy Vodafone offering (premium player) covers all user profiles, from light to heavy users In stand-alone mobile price plans, all competitors, except Yoigo, have started to use value added services (cloud, content) as differentiator; roaming starts to be a factor in high-end price plans Spain Source: Arthur D. Little Analysis Netherlands Reduced number of MNOs from 4 to 3 (O2 merged with E-Plus) may lead to competitive implications The offer of ‘‘Data only’’ tariffs remained fairly static, whereas with respect to ‘‘unlimited voice + data’’ plans, most operators increased data allowances or slightly decreased prices Value added services: Vodafone & E-Plus offer Music & Cloud; O2 integrated landline service and additional sim card(s) for free, whereas T-Mobile includes (in some plans) VoIP and a Hotspot-Flat Premium strategy for A1, competitive strategy for T-Mobile and 3 Austria. Three with low prices Value added services: A1: cloud and additional sim card for free; T-Mobile: new device every year at cost of EUR 4,99 per month; Three: unused data can be taken into the following months and roaming units include whole Europe (instead of EU) No “3G only” tariffs available on ‘‘data only’’ and very few ‘‘voice+data’’ Little price differentiation between operators across both the “voice + data” and “data only” markets Value added services differentiation: O2 and Vodafone in particular are the most attractive (O2 priority moments application, Vodafone entertainment offerings) LTE tariffs almost completely replaced the ‘‘3G only’’ equivalents. Signficant decrease in prices in parallel with an increase in data allowance by operators (mainly for ‘‘data only’’) Tele2 entered the LTE market with a no frills, aggressive pricing strategy. While KPN, T-Mobile and Vodafone are the incumbents. KPN provides the most attractive Value Added Services (Entertainment, Spotify, WiFi hotsposts, etc.). Tele2 includes very limited value added services within its offer
  • 14. 14Tariff Plans Benchmarking – 2H15 Overview of Analyzed Markets, by Region (2/3) 2 Executive Summary Main considerations on Offers - ADL Benchmark – USA Source: Arthur D. Little Analysis USA  Clear positioning by all MNOs in ‘‘unlimited voice+data’’ tariffs - with At&t and Verizon offering premium pricing and focusing on family share plans - while T-Mobile and Sprint compete through a value-for-money proposition including plans with unlimited data  Fairly homogenous positioning for most MNOs in ‘‘data only’’ tariffs, with the exception of T-Mobile’s new aggressive and innovative strategy (doubled data bundles and launched zero-rating video streaming on major content providers)  Remarkable overall advancement in Value Added Services, with MNOs integrating their offers with: cloud storage, proprietary hotspots, Wifi calling and international connectivity (data, voice and SMS) but also several entertainment and music related services
  • 15. 15Tariff Plans Benchmarking – 2H15 Overview of Analyzed Markets, by Region (3/3) 2 Executive Summary Main considerations on Offers - ADL Benchmark – Middle East Source: Arthur D. Little Analysis  Low level of competition due to the presence of only 2 operators in the market  Highly static tariff landscape with no significant differentiation between operators or across semesters  Future pricing and differentiation are expected to be driven by advanced network services and VAS Oman UAE KSA Kuwait Qatar Bahrain  No full-fledged competition results in operators’ plans mostly matching in terms of pricing and data allowances  Decreasing pricing trend despite tariffs remaining high  LTE currently advertised only with data plans (du: only highest capacity data plan). No 3G vs LTE differentiation (Etisalat)  Shared data packages available (monetization is through monthly charges for extra SIMs)  Prices may decrease due to MNP made available in 2014, with both operators stepping up their marketing activities  Dynamic tariff landscape  Pricing is comparatively very high with respect to other countries  Simple offer strategy (Ooredoo) vs diversified offer strategy (Vodafone - entertainment products included in offers)  VIP services and priority customer service provided by both Ooredoo and Vodafone  Wide offering from the 3 service providers in terms of data allowances  MNOs competition resulting in pricing standing at the low end of the GCC region  Competition is expected to increase after the launch of 3 MVNOs  Future pricing is expected to be driven by new network and VAS services (e.g. Zain capitalizing on LTE, unlimited Youtube, etc.)  In spite of being an example of 3 MNOs Middle Eastern market, the higher level of competition is not shown to have a strong diminishing effect on pricing , which is similarly high as in other Middle Eastern markets with 2 players  Widely differentiated market for ‘’data only’’ tariffs, with small allowances, often prepaid, available for on-the-go use and larger allowances available for at-home use  Very high voice+data tariffs with respect to other markets, highly voice driven, with all MNOs demanding a significant price premium for unlimited local minutes, and relatively low premiums for large data allowances  Market rapidly moving towards high-value wireless and wireline data services, supported by the launch of LTE  Low level of strategy differentiation between the players – not in terms of offer nor in terms of pricing  Large broadband allowances offered as share plans for both home and ‘’on the go’’ use  Limited differentiation based on 3G / LTE
  • 16. 16Tariff Plans Benchmarking – 2H15 Undervalued by > 50% 25-50% 10-25% Overvalued by 10-25% 25-50% >50% + / - 10%Bahrain Iran Saudi- Arabia Oman Kuwait United Arab Emirates Ireland UK France Spain Italy Germany Denmark Sweden Austria United States Europe Middle East The Big Mac Adjusted Index: Countries analysis versus Euro (%)1 United States Qatar Wireless Penetration Rate (%) (2) The Big Mac Adjusted Index (%) (1) Source: 1) The Economist (Selected Base Currency: EUR - July 2015); 2) Merrill Lynch Bank of America Global Wireless Matrix 2Q15, Arthur D. Little Analysis Top 2 Operators Market Share (%) (2) -20 -15 -10 -5 0 5 10 15 Spain France UK USA Euro Area KSA Germany Ireland Denmark Netherlands Austria Sweden Italy % 0 8040 6020 180160140120100 Spain Italy Ireland UK Sweden France KSA Germany Austria Denmark Netherlands Euro Area USA % 0 10 20 30 40 50 60 70 80 90 Denmark Euro Area KSA Germany Ireland Netherlands Austria Italy Sweden Spain France UK USA % 2 Executive Summary – Purchasing power comparison among analyzed countries Wireless penetration rates and top 2 MNOs’ market concentrations are similar for analyzed countries, the Big Mac Adjusted indicator, however, varies largely among different markets Nether- lands
  • 17. 17Tariff Plans Benchmarking – 2H15 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 0 € 2 € 4 € 6 € 8 € 10 € 12 € 14 € 16 € 18 € 20 € 0 1 2 3 4 5 6 7 8 9 10 Source: Arthur D. Little Analysis 2 Executive Summary - Average GB Size and Price: Country comparison DATA: average GB bundle size and average adjusted price/GB for LTE tariffs, by country and GB allowance segment USA North America Austria Denmark France Germany Ireland Italy Spain Sweden UK Western Europe KSA Middle East Note: for Bahrain, Kuwait, Oman, Qatar and UAE Big Mac index is unavailable. Methodology:  Flag position on the x axis is given by the average GB size of plans offered, within each GB allowance, in a given country  Flag position on the y axis is given by the Adjusted average €/GB for those countries and segments (actual price corrected by the Big Mac index Euro adj valuation)  Theoretical €/GB curve - regression on EU observations - for the average GB size of plans offered within a given country and GB allowance segment <=2 GB 2-5 GB 5-10 GB > 10 GB Main considerations on Offers - ADL Benchmark Adj. €/GB Avg. GB by seg- ment
  • 18. 18Tariff Plans Benchmarking – 2H15 10 15 20 25 30 35 40 45 50 0 € 5 € 10 € 15 € 20 € 25 € 30 € 35 € 0 1 2 3 4 5 6 7 8 9 10 Source: Arthur D. Little Analysis 2 Executive Summary - Average GB Size and Price: Country comparison VOICE + DATA: average GB bundle size and average adjusted price/GB for LTE tariffs, by country and GB allowance segment <=2 GB 2-5 GB 5-10 GB > 10 GB Main considerations on Offers - ADL Benchmark Adj. €/GB Avg. GB by seg- ment USA North America Austria Denmark France Germany Ireland Italy Spain Sweden UK Western Europe KSA Middle East Note: for Bahrain, Kuwait, Oman, Qatar and UAE Big Mac index is unavailable. Methodology:  Flag position on the x axis is given by the average GB size of plans offered, within each GB allowance, in a given country  Flag position on the y axis is given by the Adjusted average €/GB for those countries and segments (actual price corrected by the Big Mac index Euro adj valuation)  Theoretical €/GB curve - regression on EU observations - for the average GB size of plans offered within a given country and GB allowance segment 1000
  • 19. 19Tariff Plans Benchmarking – 2H15 2 Executive Summary - Average GB Price: Country comparison Percentage evolution in country average price per GB for LTE plans, keeps showing a generalized price reduction trend for both data and voice + data plans Legend:  Cells are filled in white when no data was available or no changes were found between 2H 2014 and 2H 2015  Cells are highlighted in red when average price/GB ratio decreased between 2H 2014 and 2H 2015  Cells are highlighted in green when average price/GB ratio increased between 2H 2014 and 2H 2015 Out of the 78 cases of GB allowance segments that underwent changes in price per GB, 77% (i.e. 60) experienced price reductions, while only 23% (i.e. 18) experienced price increases <= 2 GB 2–5 GB 5–10 GB > 10 GB DATA VOICE + DATA <= 2 GB 2–5 GB 5–10 GB > 10 GB -25.0% -7.1% -28.5% -19.1% -14.9% -32.2% -9.8% -29.9% -37.2% -20.9% -22.3% -4.9% -2.8% 24.1% 0.0% -4.8% -18.6% -14.2% 5.0% -2.3% -34.0% -25.7% -38.4% -28.0% -9.9% -17.4% -22.0% -14.8% -38.7% -42.8% -18.9% -6.5% -14.4% 0.0% -10.9% -5.3% -2.9% -11.4% -15.4% -15.5% -2.7% -2.6% -17.6% 0.0% 17.9% -34.8% -42.1% -46.7% -12.0% -1.0% -20.6% 3.2% -3.3% -4.4% -12.6% 0.0% -5.8% 0.0% 0.0% -10.1% -21.2% -9.6% 4.2% 0.0% -15.9% -14.3% -31.2% 0.0% 0.0% 0.0% -11.4% 0.0% 0.0% 0.0% -10.4% -22.0% 50.0% 0.9% 14.8% 2.7% 12.6% 4.9% 26.2% 8.6% 82.0% 19.2% 2.1% 4.8% 8.8% -10.1% -20.1% LTE plans average price/GB evolution 2H14 - 2H15
  • 20. 20Tariff Plans Benchmarking – 2H15 2 Executive Summary - Average GB Size and Price: Country comparison Both LTE data and LTE voice + data plans keep showing a generalized increasing trend in average allowance size, paired with a decreasing trend in average price per GB Legend:  Cells are filled in white when no data was available or no changes were found between 2H 2014 and 2H 2015  Cells are highlighted in red when average ratio decreased between 2H 2014 and 2H 2015  Cells are highlighted in green when average ratio increased between 2H 2014 and 2H 2015 Between 2H14 and 2H15, average GB bundles increased for 14 out of 16 data markets and 13 out of 15 voice+data markets, price per GB decreased for most data markets and for every voice + data market LTE plans average GB size and average price/GB evolution 2H14 - 2H15 Avg. GB bundle DATA Avg. €/GB ratio 55% 7% 5% -5% 130% 2% 8% 133% 7% 8% -4% 8% 152% 34% 43% 15% -33% -16% 5% 8% -9% -13% -5% -40% -4% -7% -20% -12% -58% -5% -6% -20% Avg. GB bundleVOICE + DATA Avg. €/GB ratio 53% 33% 49% 13% 17% 71% 50% 99% 44% -13% -19% 118% 33% 43% 41% -17% -35% -2% -21% -38% -35% -37% -42% -31% -22% -8% -24% -36% -23% -31%
  • 21. 21Tariff Plans Benchmarking – 2H15 2 Executive Summary - Trends in 4 to 3 MNO Markets – Focus on Ireland After completion of the March 2015 merger between 3 Ireland and O2, with Ireland becoming a 3 players market, we observed increases in €/GB pricing in the <=2GB allowance segments Legend:  Cells are filled in white when no data was available or no changes were found between 2H 2014 and 2H 2015  Cells are highlighted in red when average ratio decreased between 2H 2014 and 2H 2015  Cells are highlighted in green when average ratio increased between 2H 2014 and 2H 2015 LTE plans average GB size and average price/GB evolution 2H14 - 2H15 DATA VOICE + DATA <= 2 GB 2–5 GB 5–10 GB > 10 GB Avg. GB Avg. €/GB Main Drivers -33% 82% N/A N/A 7% 19% 106% -11%  Introduction of a new 1GB LTE plan by 3 Ireland - higher priced than its 3G equivalent  No changes as 2-5 GB plans were only offered in 2015  Dismission by Meteor (#3 MNO) of its 6GB plan, in favour of pricier plans in the segment  Introduction of two exceptionally large plans (100 and 250GB) by 3 Ireland in this otherwise stable segment in terms of pricing Avg. GB Avg. €/GB Main Drivers -25% 24% N/A N/A 0% 0% 0% -5%  Meteor dismissed its 1GB plan and Vodafone enlarged its 2GB plan, leaving only higher priced tariffs in the entry level segment  No changes as 2-5 GB plans were only offered in 2015  No changes as only one 7.5GB plan by Meteor keeps is included in the segment  Slight price decrease by Meteor (#3 MNO) on its top tariff
  • 22. 22Tariff Plans Benchmarking – 2H15 Agenda Tariff Plans Benchmarking for Voice and Mobile Broadband Services 1 Context & Methodology 2 Executive Summary 2.1 Main results per Country per MNO 2.2 Main results per Country per TLC Group 3 Tariff Benchmarking per Country
  • 23. 23Tariff Plans Benchmarking – 2H15 2 Executive Summary – Average GB Price: Country comparison Average GB Price per country and operator: Data Plans (1/4) Euro/GB <= 2 GB Plans 2-5 GB Plans 5-10 GB Plans > 10 GB Plans AverageAverage Average Average AverageAverage Average Average AverageAverage Average Average AverageAverage Average Average AverageAverage Average Average Austria Denmark France Germany Ireland LTE 3G 20,0 20,0
  • 24. 24Tariff Plans Benchmarking – 2H15 2 Executive Summary – Average GB Price: Country comparison Average GB Price per country and operator: Data Plans (2/4) Euro/GB <= 2 GB Plans 2-5 GB Plans 5-10 GB Plans > 10 GB Plans Average Average Average Average AverageAverage Average Average AverageAverage Average Average AverageAverage Average Average Italy Spain Sweden UK LTE 3G Netherlands AverageAverage Average Average
  • 25. 25Tariff Plans Benchmarking – 2H15 2 Executive Summary – Average GB Price: Country comparison Average GB Price per country and operator: Data Plans (3/4) Euro/GB <= 2 GB Plans 2-5 GB Plans 5-10 GB Plans > 10 GB Plans AverageAverage Average Average AverageAverage Average Average AverageAverage Average Average AverageAverage Average Average Bahrain KSA Kuwait Oman AverageAverage Average Average Qatar LTE 3G
  • 26. 26Tariff Plans Benchmarking – 2H15 2 Executive Summary – Average GB Price: Country comparison Average GB Price per country and operator: Data Plans (4/4) LTE 3G AverageAverage Average Average Euro/GB <= 2 GB Plans 2-5 GB Plans 5-10 GB Plans > 10 GB Plans USA AverageAverage Average Average Euro/GB <= 2 GB Plans 2-5 GB Plans 5-10 GB Plans > 10 GB Plans AverageAverage Average Average 18,9 18,9 UAE 19,0
  • 27. 27Tariff Plans Benchmarking – 2H15 2 Executive Summary – Average GB Price: Country comparison Average GB Price per country and operator: Voice + Data Plans (1/4) Euro/GB <= 2 GB Plans 2-5 GB Plans 5-10 GB Plans > 10 GB Plans AverageAverage Average Average AverageAverage Average Average AverageAverage Average Average AverageAverage Average Average AverageAverage Average Average Austria Denmark France Germany Ireland LTE 3G
  • 28. 28Tariff Plans Benchmarking – 2H15 2 Executive Summary – Average GB Price: Country comparison Average GB Price per country and operator: Voice + Data Plans (2/4) Euro/GB <= 2 GB Plans 2-5 GB Plans 5-10 GB Plans > 10 GB Plans Average Average Average Average AverageAverage Average Average AverageAverage Average Average AverageAverage Average Average Italy Spain Sweden UK LTE 3G Netherlands AverageAverage Average Average
  • 29. 29Tariff Plans Benchmarking – 2H15 2 Executive Summary – Average GB Price: Country comparison Average GB Price per country and operator: Voice + Data Plans (3/4) Euro/GB <= 2 GB Plans 2-5 GB Plans 5-10 GB Plans > 10 GB Plans AverageAverage Average Average AverageAverage Average Average AverageAverage Average Average AverageAverage Average Average Bahrain KSA Kuwait Oman AverageAverage Average Average Qatar LTE 3G 53,3 49,2 61,5
  • 30. 30Tariff Plans Benchmarking – 2H15 2 Executive Summary – Average GB Price: Country comparison Average GB Price per country and operator: Voice + Data Plans (4/4) LTE 3G AverageAverage Average Average Euro/GB <= 2 GB Plans 2-5 GB Plans 5-10 GB Plans > 10 GB Plans USA AverageAverage Average Average Euro/GB <= 2 GB Plans 2-5 GB Plans 5-10 GB Plans > 10 GB Plans AverageAverage Average AverageUAE 42,5
  • 31. 31Tariff Plans Benchmarking – 2H15 Agenda Tariff Plans Benchmarking for Voice and Mobile Broadband Services 1 Context & Methodology 2 Executive Summary 2.1 Main results per Country per MNO 2.2 Main results per Country per TLC Group 3 Tariff Benchmarking per Country
  • 32. 32Tariff Plans Benchmarking – 2H15 LTE BENCHMARK: Data plans pricing strategies (Price per GB vs country average) 2 Executive Summary - Average GB Price: Main MNO Groups, International Comparison Dec ‘14 Dec ‘15 EE TMobileTMobileTMobile O2Movistar O2 2-5 GB Plans 5-10 GB Plans > 10 GB Plans Note: the y axis depicts the % difference of operator’s vs. market’s average Price/GB this is by country and by GB allowance segment (<=2GB / 2-5GB / 5-10GB / >10GB) Vodafone keeps a premium positioning across most market segments, while Three operates quite consistently as a price leader <= 2 GB Plans 5% 16% -10% 0% 7% -3% 29% 2% -1% 0%4% 20% 20% 17% -21% -19% -22% 8% 0% -47% 20% -40% -23 % -2%-11 % 5% 6% 2% 0% 24% 0% -14% 7% 0% 8% -10% -27% -7% -43% 0% 29% -19% - 0,23 19% 0% -5% 13% 1% 4% -1% 3% 9% 0% 0% 18% -6% -24% 0% 0% -8% 4% -6% 18%18% -1% -26% 21% 4%8% 3% -9% 30% 52%46% 17% 0% -2% -1% 1% 36% -27%-37% 1% -37% -26% -63% -10% -48% 18% -1% 28% 38% 29% 29% 25% 14% 35% 12% 14% 13% 31% 31% 34% 16% 32% 37% 31% Market % (sub.)
  • 33. 33Tariff Plans Benchmarking – 2H15 28% 38% 29% 29% 25% 14% 35% 12% 14% 13% 31% 31% 34% 16% 32% 37% 31% LTE BENCHMARK: Voice + Data plans pricing strategies (Price per GB vs country average) 2 Executive Summary - Average GB Price: Main MNO Groups, International Comparison Dec ‘14 Dec ‘15 EE TMobileTMobileTMobile O2Movistar O2 Note: the y axis depicts the % difference of operator’s vs. market’s average Price/GB this is by country and by GB allowance segment (<=2GB / 2-5GB / 5-10GB / >10GB) Vodafone keeps a premium positioning across most market segments, while Three operates quite consistently as a price leader -12% -2% 36% 23% -23% 0% -21% 5% -8% 1% 11% 0% -40% 0% -15%-5% -29% - 38% 13% 8% 28% 10% -19% 0% 15% -23%-6% 0% 13% -31% 1% -9% 9% 4% -9% 6% 32% 7% 19% -4% 19% 36% -6% 12% -16% -8% 4% -49% -6% 1% 0% 13% 2% 34% 23% -20% 0% 15% -6% -17% 0% -18% 1%0% 0% -1% 22% 12% 30% 39% 18% 9% 2% -18 % - 11% 7% -5% - 12% -1% -7%-6% -16 % 2-5 GB Plans 5-10 GB Plans > 10 GB Plans <= 2 GB Plans Market % (sub.)
  • 34. 34Tariff Plans Benchmarking – 2H15 Agenda 1 Context & Methodology 2 Executive Summary 3 Tariff Benchmarking per Country
  • 35. 35Tariff Plans Benchmarking – 2H15 3 Key Key The following slides show competitors positioning in terms of data allowance, tariff price and price per GB Key: Actual LTE Tariff Call Out Additional Information In both «Plans distribution by Price and GB included” and “Plans distribution by Price per GB and GB included” scatterplots there are two trend lines (of current and 2H14 analysis): • both regressions curves are exponential in order to ensure better data interpolation • for each curve, R-squared is indicated. Unlimited data allowance plans have not been included in GB price averages. All prices are expressed in euro (x-rates reported in the last slide). Historical currency values (1H14 and 2H14 editions) are normalized with respect to current exchange rates used in this edition. Understanding Country’s graphs analysis details 2H15 Tariffs no longer on the market Tariff shifts Actual 3G Tariff 65% 150% 20% Adjusted Big Mac Index (Eur) Top 2 MNOs market share Mobile penetration 2H13 2H14 2H15 4G 6.6 3G 13.3 4G 13.3 3G 4G 6.6 3G 4G 9.2 9.2 4.0 3G 4G 9.7 9.2 5.3 3G 13.3 Average Operator 2H13 2H14 2H15 4G 5.8 4.4 2.7 3G 4G 3.7 3.7 2.7 3G 4G 2.7 2.7 3G 4G 2.7 2.9 3G 4G 4.7 3.4 2.7 3G Average Operator 2H13 2H14 2H15 4G 2.7 2.0 3G 4G 3G 4G 2.7 3G 4G 1.7 1.7 1.7 3G 4G 2.4 1.9 1.7 3G Average Operator 2H13 2H14 2H15 4G 0.5 0.7 3G 4G 1.3 1.3 1.0 3G 4G 0.3 0.6 0.5 3G 4G 0.4 0.4 0.2 3G 4G 0.6 0.7 0.6 3G Average Operator R² = 0.9852 R² = 0.9857 0 € 2 € 4 € 6 € 8 € 10 € 12 € 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 3 Denmark Telia Telenor TDC Plans distribution by Price per GB and GB included Analyzed Plans Euro/GB <= 2 GB Plans 5-10 GB Plans > 10 GB Plans2-5 GB Plans 1 1 1 1 3 2 2 1 1 1 3 3 4 55 5-10 GB 2-5 GB>10 GB <=2 GB3G LTE Dec’14 Oct’15 Postpaid Prepaid Old offer New offer GB €/GB 500300200100 Telenor Price/GB at market average, shift from ‘14 Denmark Market Average prices per GB in the Danish market have fallen across all bundle sizes since Dec ‘14 R² = 0.922 R² = 0.9395 0 € 10 € 20 € 30 € 40 € 50 € 60 € 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 3 Denmark Telia Telenor TDC Value for Price Strategy • 1 month retention SIM Only offers shown (30 days contract) • Offers relatively large data allowances at competitive pricing • Has either increased data allowance or reduced prices for several contracts since ’14 • Value added services by offering Netflix Competitive Price Strategy • 6 month retention SIM Only offers shown (30 days contract) • Data allowances increased while pricing has not changed • Value added services by offering cloud storage, e-books and music streaming Plans distribution by Price and GB included Strategyoutline Premium Price Strategy • 6 month retention SIM Only offers shown (30 days contract) • Plan pricing has decreased while data allowances remain steady • Offers family packages which reduce price and also include Office 365 including OneDrive Competitive Price Strategy • 1 month retention SIM Only offers shown (30 days contract) • 20GB increased data allowance to 30GB • Only provider to offer 500GB contract without minimum retention time • Value added services by offering Spotify, HBO Nordic and Telia-TV ‘14 22% 23% ‘15 ‘14 18% 19% ‘15‘ ‘ ‘ Dec’14Oct’15 Postpaid Prepaid Old offer3GLTE New offer GB Plan Price ‘14 ‘15‘ 37% 34% ‘14 ‘15 14%13% ‘ 500300200100 Telia Keeps offering the largest bundle (500GB) at only a slightly higher price then competitor’s 200GB plans Three Consistenly positioned as the market’s price leader Denmark Market Characterised by two different kinds of offers: Small-to-middle bundles for ‘’on the go use’’ and very large bundles for ‘’home use’’ TDC Data allowances have increased while pricing remained steady Telenor Have lowered prices and moved closer to competitors
  • 36. 36Tariff Plans Benchmarking – 2H15 Agenda 1 Context & Methodology 2 Executive Summary 3 Tariff Benchmarking per Country 3.1 Western Europe 3.2 North America 3.3 Middle East
  • 37. 37Tariff Plans Benchmarking – 2H15 3 Austria - Country Summary Austria  Market penetration of mobile broadband reached 67% as of December 2014 (EU average: 72%), while Austria’s LTE broadband coverage, since 2013, increased from 35% to 60% (EU December 2014: 79%)  Premium strategy for A1, competitive strategy for T-Mobile and 3 Austria. Three is being very innovative (e.g. possibility to take unused Data into the following months) with low prices  Different strategies on value added services: A1: cloud and additional sim card for free; T-Mobile: includes roaming service within its voice + data plans; Three: unused data can be used in the following months and roaming units include the whole Europe (instead of EU) -16.72 EUR Adjusted Big Mac Index MNOs market share (15e) Mobile penetration Population 151% 8.5M Source: Merrill Lynch Global Wireless Matrix, Arthur D. Little Analysis 28% 41% 31% COUNTRY SUMMARY: main indicators of the country Euro/GB 1,7 1,0 1,5 2-5 GB 5-10 GB <= 2GB 1,7 > 10 GB 2H14 2H132H15 DATA PLANS (average) VOICE + DATA PLANS (average) LTE 3G LTE 3G 2,6 2,3 2,3 5,0 5,0 5,0 1,5 1,1 0,7 1,6 1,9 1,5 7,0 5-10 GB 2,5 > 10 GB 7,1 6,6 2-5 GB 11,0 8,2 <= 2GB 11,5 28,9 13,0 7,5 11,6
  • 38. 38Tariff Plans Benchmarking – 2H15 10060 R² = 0,862 R² = 0,8246 0 € 10 € 20 € 30 € 40 € 50 € 60 € 70 € 0 5 10 15 20 25 30 35 40 3 Austria 3G A1 T-Mobile DATA PLANS: Strategy, prices and GB included in the offers analysis 3 Austria - Data Plans Sample: T-Mobile, 3 Austria, A1 *Source: Merrill Lynch Global Wireless Matrix -16.79 72% Plans distribution by Price and GB included GB Plan Price Strategyoutline Competitive offers (cheap prices and innovative offers)  3G in the low-medium allowance (1 or 9 GB)  Unlimited bundles with 4G except of one discount offer with only 3G  Unlimited plans in combination with a device and therefore 24 months retention, but also as prepaid plan (slightly more expensive and less data speed)  Tiered max. speed up to 150 Mbps  Includes 3Mobile TV station (6 Channels) Premium price market leader. Provides the fastest max. high-speed, but less data than the competitors  Tiered max. speed up to 300 Mbps  Offers new plans up to 100 GB, but no unlimited high-speed data  Some plans include Internet Security  Offers no Prepaid plans  Additional fee for upgrade to up to 300 Mbps Competitive offers below market leader  Tiered max. speed up to 150 Mbps  Prepaid plans with new max. speed (10 Mbps)  Also Offers plans with unlimited data and only differentiate by the speed of down- and upload. But these plans only in combination with a device ‘14 42% 41% ‘15 ‘14 ‘15 28%27% Unlimited 153% ‘14 31% 30% ‘15 3 Austria Unlimited data allowance at different max speed (10 or 30 Mbps) for Prepaid. Faster unlimited postpaid plans available, but only in combination with a device 3 Austria Included Data changed from 6 GB to 9 GB T Mobile Max. prepaid speed changed from 3,6 Mbps to 10 Mbps A1 This plan costs more, because it includes data speed up to 300 Mbps A1 Only small plan with <35 GB Austria Market A1 focuses on the premium price market with big data bundles, whereas T-Mobile and 3 concentrate on small data allowances T Mobile Change in strategy. Now there is only one postpaid data plan (compared to 3 plans in 2014H1) MNO market share All providers charge a ~ 20 EUR service fee per year in their postpaid plans A1 Launched new plans up to 100 GB and replaced the old ones (only up to 35 GB) Dec’14Dec’15 Postpaid Prepaid Old offer3GLTE New offer
  • 39. 39Tariff Plans Benchmarking – 2H15 2H13 2H14 2H15 4G 3G 2.0 2.0 4G 1.5 3G 1.0 2.0 1.5 4G 3G 1.8 1.8 1.5 4G 1.5 3G 1.6 1.9 1.5 Average Operator 2H13 2H14 2H15 4G 1.7 1.7 0.9 3G 1.5 1.5 0.5 4G 1.6 1.4 3G 4G 3G 0.8 0.9 4G 1.7 1.7 1.0 3G 1.5 1.1 0.7 Operator Average 2H13 2H14 2H15 4G 3G 4G 3G 5.0 4G 3G 5.0 5.0 5.0 4G 3G 5.0 5.0 5.0 Average Operator 2H13 2H14 2H15 4G 3G 2.6 2.6 2.6 4G 3G 2.0 2.0 4G 3G 4G 3G 2.6 2.3 2.3 Average Operator DATA PLANS: Price per GB analysis 3 Austria - Data Plans Sample: T-Mobile, 3 Austria, A1 Plans distribution by Price per GB and GB included Analyzed Plans Euro/GB GB €/GB <= 2 GB Plans 5-10 GB Plans > 10 GB Plans2-5 GB Plans Unlimited 2 24 1 4 2 11 8 4 5 >10 GB <=2 GB 2-5 GB 5-10 GB 153% R² = 0,6684 R² = 0,8369 0 € 1 € 2 € 3 € 4 € 5 € 6 € 7 € 0 5 10 15 20 25 30 35 40 3 Austria A1 T-Mobile 10060 3G LTE Dec’14 Dec’15 Postpaid Prepaid Old offer New offer -16.79 72% 153%
  • 40. 40Tariff Plans Benchmarking – 2H15 R² = 0,739 R² = 0,8779 0 € 10 € 20 € 30 € 40 € 50 € 60 € 70 € 80 € 90 € 100 € 0 1 2 3 4 5 6 7 8 9 10 3 Austria A1 T-Mobile T Mobile Included data changed from 1 to 2 GB and from 3 to 4 GB T Mobile is the only one who offers 4G data speed in its plans for less than 40 EUR VOICE + DATA PLANS: Strategy, prices and GB included in the offers analysis 3 Austria - Voice + Data Plans Sample: T-Mobile, 3 Austria, A1 *Source: Merrill Lynch Global Wireless Matrix Plans distribution by Price and GB included GB Plan Price Strategyoutline Price leadership strategy with offers up to 6 GB including 4G  Tiered max. speed up to 150 Mbps  Includes 1 month Spotify and 2 GB Dropbox  Very attractive roaming packages with up to 600 min to and within Europe/Unlimited SMS to Europe and 250 MB data in Europe (all not EU)  Offers cheaper plans with less data, but no unlimited voice min/SMS (up to 3000 units)  Unused Data can be taken into the following months Premium price strategy based on incremental data offers mostly including 4G:  Lower prices for landline services customers  Tiered max. speed up to 300 Mbps  5/50/100GB Dropbox storage according to plan  Also up to 2 extra sim cards (for data usage at another device) included according to plan  Up to 300 voice minutes/SMS/MB to and within EU according to plan  Special plan for under 26  A1 Visa Card for free (including theft insurance) Value-for-money strategy with offers up to 6 GB including 4G, but more expensive than 3 Austria  Tiered max. speed up to 150 Mbps  JUHU! – for 4,99€/month you get a new device every 12 month  Up to 200 voice minutes/SMS/MB to and within EU according to plan  Top plan includes minutes to Turkey, Serbia and Bosnia-Herzegovina  Many additional packages (insurance, etc.) ‘14 42% 41% ‘15 ‘14 ‘15 28%27% ‘14 31% 30% ‘15 GB 30 All providers charge a ~ 20 EUR service fee per year in their postpaid plans Austria Market A1 only provider offering big data bundles. T-Mobile and 3 focus on smaller data allowances, where as 3 offers some plans without unlimited voice min/SMS All 3 MNOs offer a plan with 6GB from 40 (3 Austria) up to 44,90 (A1) EUR/month 3 Austria Regardless of the net quality, Three offers the package with the most abroad units and fastest data speed A1 Increased data allowances across most tariffs: from 1 to 3 GB, 3 to 6 GB and from 5 to 10 GB A1 Only provider which offers more than 6 GB in its plans. A1 offers a plan up to 30 GB. MNO market share Dec’14Dec’15 Postpaid Prepaid Old offer3GLTE New offer -16.79 72% 153%
  • 41. 41Tariff Plans Benchmarking – 2H15 2H13 2H14 2H15 4G 3G 34.9 4G 11.5 3G 23.0 4G 3G 4G 11.5 3G 28.9 Average Operator 3 1 1 1 1 1 1 3 5 2H13 2H14 2H15 4G 3G 13.0 11.6 4G 11.0 8.2 3G 4G 3G 4G 11.0 8.2 3G 13.0 11.6 Average Operator 2H13 2H14 2H15 4G 7.0 7.0 6.2 3G 7.5 4G 7.2 7.2 3G 4G 6.7 3G 4G 7.0 7.1 6.6 3G 7.5 Average Operator 2H13 2H14 2H15 4G 2.5 3G 4G 3G 4G 3G 4G 2.5 3G Average Operator R² = 0,9027 R² = 0,918 0 € 5 € 10 € 15 € 20 € 25 € 30 € 35 € 40 € 0 1 2 3 4 5 6 7 8 9 10 3 Austria A1 T-Mobile VOICE + DATA PLANS: Price per GB analysis 3 Austria - Voice + Data Plans Sample: T-Mobile, 3 Austria, A1 Plans distribution by Price per GB and GB included Analyzed Plans GB €/GB 30 Euro/GB <= 2 GB Plans 5-10 GB Plans > 10 GB Plans2-5 GB Plans <=2 GB 2-5 GB 5-10 GB >10 GB 3G LTE Dec’14 Dec’15 Postpaid Prepaid Old offer New offer -16.79 72% 153%
  • 42. 42Tariff Plans Benchmarking – 2H15 3 Denmark - Country Summary Denmark  Mobile broadband rates in Denmark are much higher than the EU average: mobile broadband penetration of 116% (vs. 72% EU average), LTE coverage of 99% (vs. 79% of EU average)  Converging pricing and data allowances for most contracts  Strong demand for data usage by customers - both at home and on-the-move  Value added services: Telia offers entertainment services (HBO, Storytel, Spotify), Telenor productivity services (cloud storage, Office 365), TDC leisure services (TV-streaming), 3 offers Netflix with its larger data bundles 5.95 EUR Adjusted Big Mac Index MNOs market share (’15e) Mobile penetration Population 148% 6M COUNTRY SUMMARY: main indicators of the country 23% 34% 14%19% Euro/GB > 10 GB 0,6 0,7 0,6 5-10 GB 2,4 9,7 3,42-5 GB 4,7 1,7 5,3 2,7 9,2 1,9 <= 2GB 2H132H142H15 DATA PLANS (average) VOICE + DATA PLANS (average) LTE 3G LTE 3G Source: Merrill Lynch Global Wireless Matrix, Arthur D. Little Analysis 13,3 10,0 3,3 24,0 5,1 14,0 6,3 5,2 2-5 GB 3,3 <= 2GB 2,8 1,6 1,1 5-10 GB 1,2 > 10 GB
  • 43. 43Tariff Plans Benchmarking – 2H15 R² = 0,922 R² = 0,9395 0 € 10 € 20 € 30 € 40 € 50 € 60 € 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 3 Denmark Telia Telenor TDC Value for Price Strategy • 1 month retention SIM Only offers shown (30 days contract) • Offers relatively large data allowances at competitive pricing • Has either increased data allowance or reduced prices for several contracts since ’14 • Value added services by offering Netflix Competitive Price Strategy • 6 month retention SIM Only offers shown (30 days contract) • Data allowances increased while pricing has not changed • Value added services by offering cloud storage, e-books and music streaming DATA PLANS: Strategy, prices and GB included in the offers analysis 3 Denmark - Data Plans Plans distribution by Price and GB included Strategyoutline Premium Price Strategy • 6 month retention SIM Only offers shown (30 days contract) • Plan pricing has decreased while data allowances remain steady • Offers family packages which reduce price and also include Office 365 including OneDrive Competitive Price Strategy • 1 month retention SIM Only offers shown (30 days contract) • 20GB increased data allowance to 30GB • Only provider to offer 500GB contract without minimum retention time • Value added services by offering Spotify, HBO Nordic and Telia-TV ‘14 22% 23% ‘15 ‘14 18% 19% ‘15‘ ‘ ‘ MNO market share GB Plan Price ‘14 ‘15‘ 37% 34% ‘14 ‘15 14%13% ‘ Sample: 3 Denmark, TDC, Telenor, Telia 61%5.95 57% 148% 500300200100 Telia Keeps offering the largest bundle (500GB) at only a slightly higher price then competitor’s 200GB plans Three Consistenly positioned as the market’s price leader Denmark Market Characterised by two different kinds of offers: Small-to-middle bundles for ‘’on the go use’’ and very large bundles for ‘’home use’’ TDC Data allowances have increased while pricing remained steady Telenor Have lowered prices and moved closer to competitors Dec’14Dec’15 Postpaid Prepaid Old offer3GLTE New offer
  • 44. 44Tariff Plans Benchmarking – 2H15 2H13 2H14 2H15 4G 6.6 3G 13.3 4G 13.3 3G 4G 6.6 3G 4G 9.2 9.2 4.0 3G 4G 9.7 9.2 5.3 3G 13.3 Average Operator 2H13 2H14 2H15 4G 5.8 4.4 2.7 3G 4G 3.7 3.7 2.7 3G 4G 2.7 2.7 3G 4G 2.7 2.9 3G 4G 4.7 3.4 2.7 3G Average Operator 2H13 2H14 2H15 4G 2.7 2.0 3G 4G 3G 4G 2.7 3G 4G 1.7 1.7 1.7 3G 4G 2.4 1.9 1.7 3G Average Operator 2H13 2H14 2H15 4G 0.5 0.7 3G 4G 1.3 1.3 1.0 3G 4G 0.3 0.6 0.5 3G 4G 0.4 0.4 0.2 3G 4G 0.6 0.7 0.6 3G Average Operator R² = 0,9852 R² = 0,9857 0 € 2 € 4 € 6 € 8 € 10 € 12 € 0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 3 Denmark Telia Telenor TDC DATA PLANS: Price per GB analysis Plans distribution by Price per GB and GB included Analyzed Plans 3 Denmark - Data PlansEuro/GB <= 2 GB Plans 5-10 GB Plans > 10 GB Plans2-5 GB Plans 1 1 1 1 3 2 2 1 1 1 3 3 4 55 5-10 GB 2-5 GB>10 GB <=2 GB GB €/GB 500300 Sample: 3 Denmark, TDC, Telenor, Telia 148% 200100 Telenor Price/GB at market average, shift from ‘14 Denmark Market Average prices per GB in the Danish market have fallen across all bundle sizes since Dec ‘14 3G LTE Dec’14 Dec’15 Postpaid Prepaid Old offer New offer 61%5.95 57% 148%
  • 45. 45Tariff Plans Benchmarking – 2H15 VOICE + DATA PLANS: Strategy, prices and GB included in the offers analysis 3 Denmark - Voice + Data Plans Plans distribution by Price and GB included Strategyoutline Competitive Price Strategy • 6 month retention SIM Only offers shown (30 days contract) • Increased data allowances or lowered prices for all contracts • TDC, Telia and Telenor perfectly overlap on pricing and bundle size for two contracts • Value added service by offering Cloud Storage, e-books, music and more Competitive Pricing Strategy • No retention SIM Only offers shown (30 days contract) • Increased data allowances and steady pricing for all contracts • TDC, Telia and Telenor perfectly overlap on pricing and bundle size for two contracts • Value added service by offering Cloud Storage and Office 365 licenses Competitive Pricing Strategy • No retention SIM Only offers shown (30 days contract) • TDC, Telia and Telenor perfectly overlap on pricing and bundle size for two contracts • Increased data allowances for several contracts • Value added service by offering HBO Nordic, Storytel, Spotify and more Value for Price Strategy • No retention SIM Only offers shown (30 days contract) • Lowest or matching prices for all contracts • Little change in contracts from ’14 • Value added service by offering Netflix with larger data bundles MNO market share GB Plan Price 100 ‘14 22% 23% ‘15 ‘14 18% 19% ‘15‘ ‘ ‘‘14 ‘15‘ 37% 34% ‘14 ‘15 14%13% ‘ Sample: 3 Denmark, TDC, Telenor, Telia R² = 0,7791 R² = 0,9488 0 € 10 € 20 € 30 € 40 € 50 € 60 € 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 3 Denmark Telia Telenor TDC 50 Denmark Market Generalized converging trend in prices and value added services across all providers Three Value for price strategy across all offers although competitors have significantly reduced the gap Telenor Increased data allowances for all contracts TDC Strong price reduction and or data allowance increases Telia 50GB plan now offered at the price of dismissed 20GB plan Dec’14Dec’15 Postpaid Prepaid Old offer3GLTE New offer 61%5.95 57% 148%
  • 46. 46Tariff Plans Benchmarking – 2H15 R² = 0,9625 R² = 0,9923 0 € 2 € 4 € 6 € 8 € 10 € 12 € 14 € 16 € 18 € 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 3 Denmark Telia Telenor TDC 2H13 2H14 2H15 4G 26.7 13.3 10.0 3G 4G 24.0 3G 4G 3G 4G 21.3 14.6 3G 4G 24.0 14.0 10.0 3G Average Operator 2H13 2H14 2H15 4G 6.7 3G 4G 5.3 8.0 4.8 3G 4G 5.3 5.0 3G 4G 4.8 5.3 5.3 3G 4G 5.2 6.3 5.1 3G Average Operator 2H13 2H14 2H15 4G 4.0 3.3 3G 4G 4.0 3.3 2.7 3G 4G 3.3 2.7 3G 4G 2.7 2.7 2.7 3G 4G 3.3 3.3 2.8 3G Average Operator 2H13 2H14 2H15 4G 1.3 3G 4G 2.0 2.0 1.3 3G 4G 1.3 1.3 0.7 3G 4G 0.4 2.0 1.5 3G 4G 1.2 1.6 1.1 3G Average Operator VOICE + DATA PLANS: Price per GB analysis Plans distribution by Price per GB and GB included Analyzed Plans 3 Denmark - Voice + Data PlansEuro/GB <= 2 GB Plans 5-10 GB Plans > 10 GB Plans2-5 GB Plans 1 1 2 1 1 1 11 1 2 1 1 3 44 3 >10 GB 5-10 GB 2-5 GB <=2 GB GB €/GB 100 Sample: 3 Denmark, TDC, Telenor, Telia 50 Denmark Market Generalized reduction trend for price/GB ratio for small bundles, as well as converging pricing across all carriers, 3G LTE Dec’14 Dec’15 Postpaid Prepaid Old offer New offer 61%5.95 57% 148%
  • 47. 47Tariff Plans Benchmarking – 2H15 3 France - Country Summary France  The rollout of LTE mobile networks started relatively late but has progressed fast (75% LTE coverage vs. 79% EU average as of December 2014). The mobile broadband penetration is still low compared to EU average (65%% vs. 72% as of December 2014)  Prices have stabilized but MNOs have continued to increase data allowance  MNOs are starting to communicate ARPU increase thanks to 4G due to consumers exceeding their data package  Established MNOs compete through main and low cost second brands - Sosh for Orange, Red for SFR, B&You for Bouygues - while Free focuses on a single value-for-money plan including unlimited voice and 50GB of 4G data (but only 3GB of 3G data)  Value added services are widely included in most MNOs offers: music, TV, cloud storage, international roaming, Wifi hotspot, etc. 6.54 EUR Adjusted Big Mac Index MNOs market share (’15e) Mobile penetration Population 117% 64M COUNTRY SUMMARY: main indicators of the country 10% 31% 17% 42% Euro/GB > 10 GB 1,4 1,6 2,1 5-10 GB 4,1 3,5 3,2 2-5 GB 6,2 3,0 3,0 <= 2GB 6,5 6,8 2H132H142H15 DATA PLANS (average) VOICE + DATA PLANS (average) LTE 3G LTE 3G Source: Merrill Lynch Global Wireless Matrix, Arthur D. Little Analysis 16,9 > 10 GB 2,4 4,6 9,6 5,55-10 GB 1,8 2-5 GB 4,5 9,7 7,1 6,4 <= 2GB 15,5 15,0 22,5 15,0 8,9
  • 48. 48Tariff Plans Benchmarking – 2H15 Free does not offer Data Plans (only voice + data) but theSIM card could also be used on dongles R² = 0,8403 R² = 0,7972 0 € 10 € 20 € 30 € 40 € 50 € 60 € 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Bouygues Orange SFR Mixed strategy  Competitive offers in the small allowances (up to 10 GB)  Above market average for its 15 GB plan (out of scope, however as it has a 12 months  Several services included with the offers (Wifi, cloud storage, TV, etc…) DATA PLANS: Strategy, prices and GB included in the offers analysis 3 France - Data Plans Plans distribution by Price and GB included Strategyoutline Sample: Orange, BouyguesTelecom, SFR, Free *Source: Merrill Lynch Global Wireless Matrix Premium offers strategy.  Marketing Communication based on network and customer experience  Introduced new 20GB data plan significantly above market average  Several services included with the offers (Wifi, cloud storage, TV, data roaming etc…) ‘13 ‘14 42%44% ‘ ‘14 ‘15‘ 8% 10% 73% 6.54 117% GB Plan Price MNO market share ‘14 32% 31% ‘15‘ Price leadership strategy:  Competitive price covering larger than market allowances (up to 32 GB)  Offers a Prepaid 6GB at a premium with respect to the postpaid version  Several services included with the offers (Wifi, cloud, TV, data roaming etc…)  TV service offered with zero rating ‘14 17% 17% ‘15‘ ‘ Orange Introduced new 20GB data plan significantly above market average pricing SFR Discontinued 12GB plan and introduced 10 and 15GB plans (with 24 months retention) Bouygues Prepaid 6GB is priced twice as much as the postpaid version Bouygues - Pricing generally below market average - Offers the largest available ‘’data only’’ bundle France Market Quite clear positioning, with: - Orange above market average - SFR in line with the market - Bouygues below the market Dec’14Dec’15 Postpaid Prepaid Old offer3GLTE New offer
  • 49. 49Tariff Plans Benchmarking – 2H15 2H13 2H14 2H15 4G 5.7 3.1 3.1 3G 4G 4.2 2.0 3G 4G 2.5 3.7 3.7 3G 4G 3G 4G 4.1 3.5 3.2 3G Average Operator 2H13 2H14 2H15 4G 2.7 3G 4G 2.1 2.7 3G 4G 1.4 1.4 1.4 3G 4G 3G 4G 1.4 1.6 2.1 3G Average Operator2H13 2H14 2H15 4G 7.4 3G 4G 5.0 3.0 3G 4G 3G 4G 3G 4G 6.2 3.0 3G Average Operator2H13 2H14 2H15 4G 5.0 6.2 3G 16.9 4G 8.0 8.0 3G 4G 3G 4G 3G 4G 6.5 6.8 3G 16.9 Average Operator 2 1 1 1 2 1 1 2 1 444 <= 2 GB Plans 5-10 GB Plans > 10 GB Plans2-5 GB Plans Euro/GB Plans distribution by Price per GB and GB included Analyzed Plans GB €/GB 3G LTE Dec’14 Dec’15 Postpaid Prepaid Old offer 2-5 GB <=2 GB >10 GB 5-10 GB New offer DATA PLANS: Price per GB analysis 3 France - Data Plans Sample: Orange, BouyguesTelecom, SFR, Free R² = 0,8734 R² = 0,7932 0 € 1 € 2 € 3 € 4 € 5 € 6 € 7 € 8 € 9 € 0 5 10 15 20 25 30 35 Bouygues Orange SFR France Market Quite clear positioning, with: - Orange above market average - SFR in line with the market - Bouygues below the market 73% 6.54 117%
  • 50. 50Tariff Plans Benchmarking – 2H15 R² = 0,3959 R² = 0,3222 0 € 10 € 20 € 30 € 40 € 50 € 60 € 70 € 80 € 0 2 4 6 8 10 12 14 16 18 20 Bouygues Free Orange SFR Orange and SFR Both evidence a strong price decrease in their top offers with: - SFR halving the price - Orange doubling the allowance VOICE + DATA PLANS: Strategy, prices and GB included in the offers analysis 3 France - Voice + Data Plans Plans distribution by Price and GB included Sample: Orange, BouyguesTelecom, SFR, Free *Source: Merrill Lynch Global Wireless Matrix GB Plan Price MNO market share 5040 117% Best value-for-money strategy :  A unique mobile plan including high voice and data usage that could be used on 3G (3GB) and 4G (50 GB)  No retention plan  Several services included (international roaming, Wifi Hot, etc..), but no content (video, music, games, …) Premium strategy with Orange brand, value-for-money strategy with Red brand: • High end offers through the SFR brand (with decreased pricing for large bundles) • ‘’Low cost’’ offers SIM only without retention through a second brand ‘’Red’’, now even cheaper with 2x data promotion • Several services included in almost all offers (cloud storage, international roaming, Wifi and one option to select VOD, newspaper, music, etc..) Strategyoutline Premium strategy with Orange brand, value-for-money strategy with Sosh brand: • High end offers through the Orange brand and network (with significantly decreased pricing for large GB bundles) • ‘’Low cost’’ offers SIM only without retention through a second brand ‘‘Sosh’’ • Several services included in almost all offers (Orange TV, Wifi Hotspots, cloud storage, international roaming etc..) ‘14 ‘14 42%44% ‘’15 ‘14 ‘15‘ 8% 10% ‘14 32% 31% ‘15‘ Market strategy of large size plans • Offers different voice + data plans through the Bouygues Telecom brand with service and content applications (CanalPlay, Spotify, Gameloft, …) • Offers unlimited voice+ different data plans through the B&You brand SIM only • Doubled the size of its 20 bundle to 40GB • Several services included in almost all offers (TV, cloud, roaming, Wifi etc..) • TV service offered with zero rating ‘14 17% 17% ‘15‘ ‘ Bouygues and Free Both significantly increased the size of their largest bundle: - Bouygues from 20 to 40GB - Free from 20 to 50GB SFR 2x promotion on ‘Red’ plans with: - 3GB now including 6GB and - 5GB now including 10GB for the same price Orange and SFR Both either increased the size or decreased the price of most of their bundles Orange Origami Play plans include an extra GB for the same price (3 to 4GB and 7 to 8GB) Dec’14Dec’15 Postpaid Prepaid Old offer3GLTE New offer 73% 6.54 117% Orange Plans under Sosh second brand, remain below market pricing with unmodified bundles (3 and 5GB)
  • 51. 51Tariff Plans Benchmarking – 2H15 2H13 2H14 2H15 4G 15.5 15.0 25.0 3G 15.0 4G 20.0 3G 4G 3G 4G 3G 4G 15.5 15.0 22.5 3G 15.0 Average Operator 2H13 2H14 2H15 4G 10.2 7.6 6.6 3G 10.0 4G 9.3 7.1 5.8 3G 8.3 4G 10.0 6.3 6.3 3G 4G 3G 4G 9.7 7.1 6.4 3G 8.9 Average Operator 2H13 2H14 2H15 4G 10.0 6.4 5.0 3G 4G 11.7 5.1 3G 4G 5.0 4.0 4.0 3G 4G 3G 4G 9.6 5.5 4.5 3G Average Operator 2H13 2H14 2H15 4G 3.8 3G 4G 7.0 0.8 3G 4G 3.7 3.5 3.5 3G 4G 1.0 1.0 0.4 3G 4G 2.4 4.6 1.8 3G Average Operator R² = 0,465 R² = 0,821 0 € 5 € 10 € 15 € 20 € 25 € 30 € 0 2 4 6 8 10 12 14 16 18 20 Bouygues Free Orange SFR 3 1 2 1 3 1 2 1 1 11 1 1 4 6 7 <= 2 GB Plans 5-10 GB Plans > 10 GB Plans2-5 GB Plans Euro/GB Plans distribution by Price per GB and GB included Analyzed Plans GB €/GB <=2 GB 2-5 GB 5-10 GB >10 GB VOICE + DATA PLANS: Price per GB analysis 3 France - Voice + Data Plans Sample: Orange, BouyguesTelecom, SFR, Free 5040 France Market - Overall market is converging since Orange and SFR decreased the €/GB proposition for both small and large size bundles - Bouygues and Free shifted their €/GB offering for their large size bundles 3G LTE Dec’14 Dec’15 Postpaid Prepaid Old offer New offer 73% 6.54 117%
  • 52. 52Tariff Plans Benchmarking – 2H15 3 Germany - Country Summary Germany  Market penetration of mobile broadband reached 65% as of December 2014 (EU average: 72%). Germany’s LTE broadband coverage reached 92%, a very high level compared to the 79% EU average.  O2 merger with E-Plus reduced the number of MNOs from 4 to 3 and may lead to competitive implications.  The offer of ‘‘Data only’’ tariffs remained fairly static, whereas with respect to ‘‘unlimited voice + data’’ plans, most operators increased data allowances or slightly decreased prices. E-Plus was the only MNO to leave its offer mostly unchanged since 2014  Providers offer different strategies on value added services: Vodafone & E-Plus offer Music & Cloud; O2 integrated landline service and additional sim card(s) for free, whereas T-Mobile includes (in some plans) VoIP and a Hotspot-Flat -9.08 EUR Adjusted Big Mac Index MNOs market share (’15e) Mobile penetration Population 141% 81M 28% 34% 37% COUNTRY SUMMARY: main indicators of the country Euro/GB > 10 GB 2,3 5-10 GB 4,7 4,7 4,6 2-5 GB 7,4 5,2 5,6 <= 2GB 14,5 13,3 12,6 2H132H142H15 DATA PLANS (average) VOICE + DATA PLANS (average) LTE 3G LTE 3G Source: Merrill Lynch Global Wireless Matrix, Arthur D. Little Analysis 4,7 4,7 4,7 5,9 5,9 5,9 14,7 15,0 15,0 > 10 GB 4,5 4,4 5-10 GB 10,0 8,1 7,7 2-5 GB 14,8 14,2 11,0 <= 2GB 39,4 26,7 21,1 10,0 10,0 20,0 21,7 20,8
  • 53. 53Tariff Plans Benchmarking – 2H15 R² = 0,6366 R² = 0,8572 0 € 5 € 10 € 15 € 20 € 25 € 30 € 35 € 40 € 45 € 50 € 0 1 2 3 4 5 6 7 8 9 10 Eplus Vodafone T-Mobile O2 Competitive offers  First 2 months (up to 4) extra GB available  Cheapest plan has the most extra GB  Price increase after the 13th month (additional 2-5 Euro monthly)  Tiered max. speed up to 50 Mbps  Offer also Prepaid-Plans fore same price as Postpaid-Plans, but no 4G  Postpaid-Plans only in combination with minimum 24 month-retention 37% 37% ‘14 ‘15 DATA PLANS: Strategy, prices and GB included in the offers analysis 3 Germany - Data Plans Plans distribution by Price and GB included Sample: T-Mobile, Vodafone, E-plus, O2 *Source: Merrill Lynch Global Wireless Matrix Strategyoutline No frills low-price strategy for 3G only offers  Competitive prices, but “3G only” tariffs  Tiered max. speed only up to 7.2 Mbps, but temporary 42 Mbps (till end of 2015)  Entertainment: Music Unlimited powered by MTV Music Napster  10 GB free cloud storage for top price plan  Offer plans with and without Music Flat Premium offers  Fastest network with tiered max. speed up to 300 Mbps  Price increase after the 13th month (additional 2-3 Euro monthly)  3 months Spotify for free  Wi-Fi Hotspots and VoIP included  Prepaid-Plans only up to 500 MB Simple and Competitive offers strategy with small/medium data allowances (up to 6 GB):  Price increase after 24 month  Prepaid have 3G connectivity with limited speed (7.2 Mbps)  Postpaid offer is not speed tiered and provides max. LTE speed up to 225 Mbps for customers to experience network quality ‘14 ‘15 34% 34% ‘14 ‘15 ‘14 28% 28% ‘15 71% -9.08 141% MNO market share GB Plan Price Vodafone - Reduced its prices with a 2,50€ discount for all plans - Provides an increased download speed of up to 225 Mbps T Mobile No changes in price strategy but data speed increased to up to 300 Mbps Germany Market Very static market in terms of pricing. Changes almost only affected data speed. O2 - Generally competitive offer pricing - Largest data offers in the market E-plus - Unmodified “3G only” offer - Similar pricing of competitor’s 4G plans in small bundles (0.75GB and 2GB) - Lower pricing for 5GB plan Telefonica: O2 and E-plus - O2 offers a fast 4G network and wide offer variety (pre vs. postpaid, various GB sizes) - E-plus retains few postpaid offers running on a 3G network Dec’14Dec’15 Postpaid Prepaid Old offer3GLTE New offer
  • 54. 54Tariff Plans Benchmarking – 2H15 2H13 2H14 2H15 4G 9.0 13.0 3G 15.0 15.0 15.0 4G 3G 15.0 15.0 15.0 4G 20.0 12.5 12.5 3G 4G 15.0 12.5 3G 14.0 15.0 15.0 4G 14.5 13.3 12.6 3G 14.7 15.0 15.0 Operator Average 2H13 2H14 2H15 4G 5.0 4.0 5.0 3G 5.0 5.0 5.0 4G 3G 4.5 4.5 4.5 4G 10.0 6.0 6.0 3G 4G 7.3 6.7 5.8 3G 7.7 7.7 7.7 4G 7.4 5.2 5.6 3G 5.9 5.9 5.9 Operator Average 2H13 2H14 2H15 4G 4.7 4.6 4.6 3G 4.7 4.7 4.7 4G 3G 4G 5.0 3G 4G 4.6 5.0 4.6 3G 4G 4.7 4.7 4.6 3G 4.7 4.7 4.7 Operator Average 2H13 2H14 2H15 4G 3G 4G 3G 4G 2.3 3G 4G 3G 4G 2.3 3G Operator Average R² = 0,8168 R² = 0,9281 0 € 5 € 10 € 15 € 20 € 25 € 0 1 2 3 4 5 6 7 8 9 10 Eplus Vodafone T-Mobile O2 DATA PLANS: Price per GB analysis Plans distribution by Price per GB and GB included Analyzed Plans 3 Germany - Data Plans Sample: T-Mobile, Vodafone, E-plus, O2 Euro/GB GB €/GB <= 2 GB Plans 5-10 GB Plans > 10 GB Plans2-5 GB Plans 2 3 2 2 2 1 3 2 3 1 6 3 5 7 <=2 GB 2-5 GB 5-10 GB >10 GB 3G LTE Dec’14 Dec’15 Postpaid Prepaid Old offer New offer 71% -9.08 141%
  • 55. 55Tariff Plans Benchmarking – 2H15 R² = 0,8727 R² = 0,9376 0 € 10 € 20 € 30 € 40 € 50 € 60 € 70 € 80 € 90 € 100 € 0 1 2 3 4 5 6 7 8 9 10 Eplus Vodafone T-Mobile O2 Competitive pricing with offers up to 10 GB:  Tiered max. speed up to 50 Mbps  Plans with 24 and one month retention, but plans without bond are more expensive  24-Month-Plans offer a discount for the first 24 months  Up to 200 voice minutes/SMS to and within EU + 1 GB Data according to plan  Up to 2 additional sim cards  Landline number included 37% 37% ‘14 ‘15 VOICE + DATA PLANS: Strategy, prices and GB included in the offers analysis 3 Germany - Voice + Data Plans Plans distribution by Price and GB included Sample: T-Mobile, Vodafone, E-plus, O2 *Source: Merrill Lynch Global Wireless Matrix Strategyoutline Simple and Competitive offers strategy with small data allowances on 3G network:  Temporary max. speed up to 42 Mbps  Up to 10 GB free cloud storage  Only in Top plan: Napster Music Flat and Kaspersky protection program  Landline number included Premium price strategy based on data offers with high speed  Tiered max. speed: up to 300 Mbps  Price increase after 12 month  Top Plan includes: Wi-Fi hotspots, 2 additional sim cards, landline phone number, call, data and SMS in EU  much more VAS than other plans  Cheaper Plans only include: Spotify free for 3 months and VoIP, but already up to 150 Mbps 4G competitive strategy with a wide range of offers and incremental data up to 20 GB:  Large discounts for first 12 & 24 month  Up to 100 GB Cloud Storage  Vodafone TV and Deezer Music included, which, together with un-tiered max. LTE speed of up to 225 Mbps allows customers to experience network quality  Tiered max. speed up to 225 Mbps  Abroad Units included the first 6 months  Up to 2.4 GB Blackberry Service included ‘14 ‘15 34% 34% ‘14 ‘15 ‘14 28% 28% ‘15 142% MNO market share GB Plan Price 20 141% E-plus - Offers small GB unlimited voice + data plans with BASE brand - Temporary offers up to 42 Mbps till Dec 15, but only 7.2 after Vodafone - Offers large customers discounts for the first 12 & 24 months of their contracts - Increased data bundle and slightly reduced prices for small plans - Slightly decreased prices for large plans T Mobile - Maintained prices & increased bundles for all unlimited voice + data plans - Includes several VAS in the top plan O2 Decreased pricing for all of its offers, which remain the lowest priced on the market Germany Market Dynamic market with increases in data allowances or slight decrease in prices by most operators Germany Market Each operator now offers a 2GB bundle Vodafone Top plan with similar price level but double allowance with respect to competitors Dec’14Dec’15 Postpaid Prepaid Old offer3GLTE New offer 71% -9.08 141%
  • 56. 56Tariff Plans Benchmarking – 2H15 2H13 2H14 2H15 4G 20.0 30.0 27.0 3G 20.0 20.0 4G 3G 20.0 22.5 21.3 4G 42.4 26.6 20.0 3G 4G 50.0 23.3 16.2 3G 4G 39.4 26.7 21.1 3G 20.0 21.7 20.8 Operator Average 2H13 2H14 2H15 4G 10.0 11.7 10.5 3G 10.0 10.0 4G 3G 4G 14.4 16.3 12.5 3G 4G 20.0 15.0 10.6 3G 4G 14.8 14.2 11.0 3G 10.0 10.0 Operator Average 2H13 2H14 2H15 4G 8.0 7.2 3G 4G 3G 4G 8.0 3G 4G 10.0 8.1 7.8 3G 4G 10.0 8.1 7.7 3G Operator Average 2H13 2H14 2H15 4G 3G 4G 3G 4G 3G 4G 4.5 4.4 3G 4G 4.5 4.4 3G Operator Average R² = 0,9396 R² = 0,9666 0 € 5 € 10 € 15 € 20 € 25 € 30 € 35 € 0 1 2 3 4 5 6 7 8 9 10 Eplus Vodafone T-Mobile O2 VOICE + DATA PLANS: Price per GB analysis Plans distribution by Price per GB and GB included Analyzed Plans 3 Germany - Voice + Data Plans Sample: T-Mobile, Vodafone, E-plus, O2 Euro/GB <= 2 GB Plans 5-10 GB Plans > 10 GB Plans2-5 GB Plans 2 2 1 1 3 1 1 1 1 1 13 2 6 4 <=2 GB 2-5 GB 5-10 GB >10 GB 3G LTE Dec’14 Dec’15 Postpaid Prepaid Old offer New offer GB €/GB 20 71% -9.08 141%
  • 57. 57Tariff Plans Benchmarking – 2H15 3 Ireland - Country Summary Ireland  Both mobile broadband penetration (82% as of December 2014) and LTE coverage (87%) are significantly wider than the EU average 72% and 79% respectively  The most significant change in the market over the past few months was the acquisition of O2 Ireland by the MNO 3 Ireland, significantly increasing 3’s market share  Tariff prices have marginally increased in the ‘‘data only’’ market, remained relatively unchaged for unlimited voice + data plans  3G tariffs remain widespread in the ‘‘data only’’ market  Differentiation between operators is mostly evident for tariffs that include low data bundles -10.66 EUR Adjusted Big Mac Index MNOs market share (’15Q2) Mobile penetration Population 125% 5M 19% 35% 8% 38% COUNTRY SUMMARY: main indicators of the country Source: Irish Commission for Communication Regulation Euro/GB > 10 GB 1,3 1,2 1,1 5-10 GB 2,6 3,1 2-5 GB 6,0 <= 2GB 11,0 20,0 2H132H142H15 DATA PLANS (average) VOICE + DATA PLANS (average) LTE 3G LTE 3G 1,2 0,9 1,8 2,0 2,6 2,8 3,5 3,5 3,9 7,2 7,5 11,5 > 10 GB 2,7 2,5 5-10 GB 4,0 4,0 2-5 GB 5,9 <= 2GB 29,6 24,2 30,0 2,7 31,3 23,8 Others
  • 58. 58Tariff Plans Benchmarking – 2H15 R² = 0,6097 R² = 0,6754 0 € 10 € 20 € 30 € 40 € 50 € 60 € 70 € 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 3 Ireland Meteor Vodafone Acquired by 3 Ireland in June 2015. Its tarrifs were removed and not replaced by equivalent deals at 3. DATA PLANS: Strategy, prices and GB included in the offers analysis 3 Ireland - Data Plans Plans distribution by Price and GB included Strategyoutline Market average prices based on: • 4G large GB bundles and 3G low GB bundles • Long retention for 15 & 20GB postpaid tariffs is also available with a free dongle • Option to increase speed of 3G connection for 10€ • Prices have remained completely unchanged since last semester Price leadership strategy based on: • Prices consistently the lowest in each data size offered • Prices have evolved in-line with market dynamics • Only one 3G tariff remaining, which is its lowest GB offer • Supplemented by deals such as free cinema tickets and 2 for 1 dining ‘14 19% 19% ‘15 ‘14 26% ‘15‘ ‘ ‘ Sample: 3 Ireland, Meteor, O2, Vodafone -10.66 73% 125% Premium price market leader based on: • Tariffs across the GB bundle spectrum • Only carrier to offer very large bundles • Prepaid 4G bundles 4.99€ more than the 3G equivalent • All offers have access to 3Plus: a variety of discounts and offers on tickets and entertainment opportunities ‘14 ‘15‘ 39% 38% GB Plan Price 25010060 Three 4.99€ add on for 4G access Three Provides the largest bundles available in the market Ireland Market All of the larger 3G bundles have been replaced with 4G equivalents or discontinued Meteor Price movement typifies the price dynamics in Ireland Ireland Market Prices across the market have marginally increased Vodafone 10€ to upgrade from regular speed to 42Mbps Three Discontinued its 15GB tariff and replaced it with a 10GB and a 20GB tariff ‘14 ‘15 35%10% ‘ MNO market share Dec’14Dec’15 Postpaid Prepaid Old offer3GLTE New offer
  • 59. 59Tariff Plans Benchmarking – 2H15 2H13 2H14 2H15 4G 3G 8.0 8.0 4G 11.0 20.0 3G 7.2 7.2 15.0 4G 3G 4G 3G 4G 11.0 20.0 3G 7.2 7.5 11.5 Average Operator 2H13 2H14 2H15 4G 3G 4G 6.0 3G 4.3 4G 3G 3.5 3.5 3.5 4G 3G 4G 6.0 3G 3.5 3.5 3.9 Average Operator 2H13 2H14 2H15 4G 2.7 2.7 3G 2.0 2.5 2.5 4G 4.0 3G 3.3 4G 2.6 2.7 3G 2.0 4G 3G 2.7 4G 2.6 3.1 3G 2.0 2.6 2.8 Average Operator 2H13 2H14 2H15 4G 1.6 1.6 3G 1.5 4G 1.2 1.0 3G 1.0 1.0 1.8 4G 1.1 0.8 0.9 3G 0.5 1.0 4G 3G 1.4 1.1 4G 1.1 1.2 1.1 3G 1.2 0.9 1.4 Average Operator R² = 0,9154 R² = 0,7915 0 € 5 € 10 € 15 € 20 € 25 € 0 5 10 15 20 25 30 3 Ireland Meteor Vodafone <= 2 GB Plans 5-10 GB Plans > 10 GB Plans2-5 GB Plans DATA PLANS: Price per GB analysis Plans distribution by Price per GB and GB included Euro/GB Analyzed Plans 3 Ireland - Data Plans Sample: 3 Ireland, Meteor, O2, Vodafone 2 23 2 1 2 6 4 01 1 6 12 6 <=2 GB 2-5 GB 5-10 GB >10 GB 250 GB €/GB 10060 3G LTE Dec’14 Dec’15 Postpaid Prepaid Old offer New offer -10.66 73% 125%
  • 60. 60Tariff Plans Benchmarking – 2H15 R² = 0,167 R² = 0,5246 0 € 5 € 10 € 15 € 20 € 25 € 30 € 35 € 40 € 45 € 50 € 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 3 Ireland Meteor Vodafone VOICE + DATA PLANS: Strategy, prices and GB included in the offers analysis 3 Ireland - Voice + Data Plans Plans distribution by Price and GB included Strategyoutline Market average price strategy based on: • Tariffs including small data bundles • Differenting its offer with a mid-size bundle (5GB) replacing a 2GB bundle • Tariffs also offer 100 minutes of international calls and 100 texts with tariffs • Share plans are also available at €20 Price leadership strategy based on: • The widest choice of voice + data tariffs offered by any operators • All tariff prices are below the market average • Prices moved in line with the market supplemented by deals such as free cinema tickets and 2 for 1 dining Acquired by 3 Ireland in June 2015. Its tariffs were removed and not replaced by equivalent deals at 3. Sample: 3 Ireland, Meteor, O2, Vodafone * Source: Irish Commission for Communication Regulation Premium price leadership based on: • Only one voice + data tariff available • Offers sole unlmited voice + data plan including a large GB bundle with ‘unlimited’ minutes(15GB fair usage) • Price moved in the opposite direction to the market • Includes access to 3Plus: a variety of discounts and offers on tickets and entertainment opportunities GB Plan Price Meteor - Is price leader across all GB ranges - Decreased price for its 15 GB plan Three - Offers one ‘’unlimited plan’’ with fair usage policy limiting the allowance to 15GB - 3G option has been removed Vodafone and Meteor For small data bundles; increased data offering without increasing pricing Vodafone The only 1GB voice + data tariff on the market Ireland Market There are no remaining “3G only” tariffs in the unlimited voice + data Irish market ‘14 19% 19% ‘15 ‘14 26% ‘15‘ ‘ ‘‘14 ‘15‘ 39% 38% ‘14 ‘15 35%10% ‘ MNO market share Dec’14Dec’15 Postpaid Prepaid Old offer3GLTE New offer -10.66 73% 125%
  • 61. 61Tariff Plans Benchmarking – 2H15 2H13 2H14 2H15 4G 32.5 23.8 30.0 3G 4G 3G 4G 26.8 25.0 3G 4G 3G 31.3 23.8 4G 29.6 24.2 30.0 3G 31.3 23.8 Average Operator 2H13 2H14 2H15 4G 7.0 3G 4G 3G 4G 4.8 3G 4G 3G 4G 5.9 3G Average Operator 2H13 2H14 2H15 4G 3G 4G 3G 4G 4.0 4.0 3G 4G 3G 4G 4.0 4.0 3G Average Operator 2H13 2H14 2H15 4G 3G 4G 3.0 3.0 3G 2.7 4G 2.3 2.1 3G 4G 3G 4G 2.7 2.5 3G 2.7 Average Operator R² = 0,9596 R² = 0,9886 0 € 5 € 10 € 15 € 20 € 25 € 30 € 35 € 0 2 4 6 8 10 12 14 16 3 Ireland Meteor Vodafone <= 2 GB Plans 5-10 GB Plans > 10 GB Plans2-5 GB Plans VOICE + DATA PLANS: Strategy, prices and GB included in the offers analysis Plans distribution by Price per GB and GB included Euro/GB Analyzed Plans 3 Ireland - Voice + Data Plans Sample: 3 Ireland, Meteor, O2, Vodafone 1 11 1 1 1 3 1 2 <=2 GB 2-5 GB 5-10 GB >10 GB 3G LTE Dec’14 Sep’15 Postpaid Prepaid Old offer GB €/GB Ireland Market There is little variance between tariffs of similar GB allowance -12.93 73% 125%
  • 62. 62Tariff Plans Benchmarking – 2H15 3 Italy - Country Summary Italy  LTE networks deployment is progressing quickly, with coverage reaching 77% at the end of 2014 vs. an EU average of 79,4%.  As of 2015, all of the Italian plans in scope offer 4G connectivity, in addition to 3G connectivity, at no extra fee. The market keeps trending towards a generalized decrease in price per GB, paired with an increase in the size of data allowances.  TIM and Vodafone are positioned as the prime players in the market, with premium priced tariffs running on reliable networks, and generally including Value Added Services such as media on demand, music, gaming and news.  Wind and Three hold a no frills value-for-price positioning. The 2 operators announced an agreement to form a joint venture of their telecoms businesses, which would reduce the number of MNOs from 4 to 3 and lead to possible competitive implications. Euro/GB 12.30 EUR Adjusted Big Mac Index MNOs market share (’15e) Mobile penetration Population 146% 61M > 10 GB 1,6 1,3 1,3 5-10 GB 3,0 2,3 2,3 2-5 GB 3,4 3,3 2,8 <= 2GB 7,5 5,4 4,6 2H132H142H15 DATA PLANS (average) VOICE + DATA PLANS (average) LTE 3G LTE 3G 25% 12% 29% 34% COUNTRY SUMMARY: main indicators of the country Source: Merrill Lynch Global Wireless Matrix, Arthur D. Little Analysis 0,8 0,8 2,3 2,9 2,9 2,9 5,0 5,0 > 10 GB 1,6 2,9 5-10 GB 3,6 3,8 2-5 GB 15,8 11,3 9,7 <= 2GB 16,6 13,5 1,5 24,1 17,5
  • 63. 63Tariff Plans Benchmarking – 2H15 R² = 0,515 R² = 0,6257 0 € 5 € 10 € 15 € 20 € 25 € 30 € 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Wind Tim Vodafone 3 Italy Vodafone - Repositioned all of its data plans with larger allowances for the same price - Prepaid plans are priced like postpaid with half data (except for existing customers) Wind Plans offering data sharing among up to 4 devices Premium positioning with Customer cross selling strategy based on:  GB x2 for Telecom fixed line customers  No retention offers shown  5 GB and 10 GB plans overlapping with Vodafone’s offering  Waived 5€ LTE option for small bundles  Tim Vision contents: choice of Sports or Entertainment streaming (free for top tariff) Simple and Premium offers based on:  Prepaid offers with above market-average prices (double allowances for postpaid)  5 and 10 GB plans overlapping with TIM’s  Internet Services like Rete Sicura (antivirus, malware and phishing, etc.) free for 12 months  Entertainment Contents free trial (3-6 months: Spotify, Infinity (Movies, series), Calcio) or a free magazine for 1 month DATA PLANS: Strategy, prices and GB included in the offers analysis 3 Italy - Data Plans Plans distribution by Price and GB included Strategyoutline Sample: 3 ITA, Vodafone, TIM, Wind *Source: Merrill Lynch Global Wireless Matrix ‘14 35% 34% ‘15 ‘14 29% 29% ‘15 GB Plan Price 12.30 63% 146% MNO market share 30 Three - Most competitive prices with largest bundles available in the market - 30 GB plan includes unlimited night data Italy Market The rationality of the market (link between price and data allowance) increased in the last months Tim 5€ LTE option now included at no extra fee, with significant price impact on small bundles Three All data offers include LTE connectivity (waived 1€ fee to upgrade 3G to 4G) Price leadership strategy based on:  More GB for price offers (below market average tariffs)  Entertainment products: Grande Cinema 3 (1 cinema ticket per week)  Abroad Data: navigation at same national tariff (+ connection fee) in selected abroad countries (Sister companies’ countries)  “Free to explore” option with unlimited data available at 40€ per month  Only MNO offering time-based tariffs Simple tariffs with competitive offers strategy based on:  Wide set of allowances available  Sharing of the allowance with up to 4 people for the 3/6/12 GB plans  Tablet included with 30 months retention  No additional services (No frills)  Roaming at 32 Kbps after data allowance consumption ‘14 11% ‘15‘14 25% 25% ‘15 12% Dec’14Dec’15 Postpaid Prepaid Old offer3GLTE New offer
  • 64. 64Tariff Plans Benchmarking – 2H15 2H13 2H14 2H15 4G 5.0 5.0 4.0 3G 4.0 4.0 4G 3.3 3.3 3G 4G 3.0 2.6 3G 3.0 4G 2.7 2.7 1.5 3G 2.3 2.3 4G 3.4 3.3 2.8 3G 2.9 2.9 Average Operator 2H13 2H14 2H15 4G 3.0 3.0 3.0 3G 2.5 4G 2.5 3G 2.9 2.9 4G 1.9 2.0 3G 1.5 4G 1.9 3G 4G 3.0 2.3 2.3 3G 2.3 2.9 Operator Average 2H13 2H14 2H15 4G 2.3 3G 4G 2.3 2.0 1.5 3G 4G 1.6 1.5 3G 4G 0.8 0.8 0.7 3G 0.8 0.8 4G 1.6 1.3 1.3 3G 0.8 0.8 Operator Average 2H13 2H14 2H15 4G 7.5 7.5 5.0 3G 5.0 5.0 4G 3G 4G 4.4 4.4 3G 5.0 4G 3G 4G 7.5 5.4 4.6 3G 5.0 5.0 Operator Average R² = 0,6892 R² = 0,5322 0 € 1 € 2 € 3 € 4 € 5 € 6 € 7 € 8 € 0 2 4 6 8 10 12 14 16 18 20 Wind Tim Vodafone 3 Italy 1 3 2 2 1 2 2 1 1 2 1 2 1 4 8 6 3 <= 2 GB Plans 5-10 GB Plans > 10 GB Plans2-5 GB Plans DATA PLANS: Price per GB analysis 3 Italy - Data Plans Sample: 3 ITA, Vodafone, TIM, Wind *Source: Merrill Lynch Global Wireless Matrix Euro/GB Plans distribution by Price per GB and GB included Analyzed Plans GB €/GB 3G LTE Dec’14 Dec’15 Postpaid Prepaid Old offer All LTE Plans 30 2-5 GB <=2 GB >10 GB 5-10 GB Italy Market - Overall price reduction across all MNOs - ‘‘3G only’’ offers no longer on the market New offer 12.30 63% 146%
  • 65. 65Tariff Plans Benchmarking – 2H15 R² = 0,2384 R² = 0,2019 0 € 10 € 20 € 30 € 40 € 50 € 60 € 70 € 80 € 0 1 2 3 4 5 6 7 8 Vodafone 3 Italy Wind Tim Value for price strategy  2 postpaid plans with 12 months retention and increased allowances (1 GB to 4 GB and 7 GB to 8 GB, respectively) including calls to and from several countries countries  Prepaid 2GB plan: 30 €/m with no retention/ 20 €/m with 30 months retention/ 10€/m if additional SIM with family Program  Cinema tickets (pay 1 x 2 tickets)  All-in 800 extra, unreported prepaid, has an innovative retention system as the 800 min and SMS included double every 6 months Innovative and value for price strategy for Unlimited voice / SMS:  Offer simplification: customizable plans – all inclusive digital – were discontinued  Postpaid plan with data shareabale on multiple devices - Wind magnum - available with 2, 4, 8 or 14GB data allowances  Digital Home & Life products with monthly surcharge: Smartwatch, Wellness, Music, Smart Home  One offer with limited voice (150 minutes/ m, 300 SMS, 2GB; 12 Euro/m) focuses on unlimited music services (Napster) Premium price strategy with only 1 unlimited voice and SMS plan:  4G with top tariff (4GB/month): − 250 min per month towards EU and USA − From EU and USA: 500 voice minutes, 500 SMS, 500MB per month − 10GB Cloud storage  Discontinued Tim Special Unlimited plan  Additional monthly data available with ‘’Opzione Internet Extra’’ Premium strategy with 12 months retention:  Top Tariff (free calls, SMS and data when abroad, minutes and SMS towards EU) now includes free extra SIM with 1GB of data allowance and unlimited voice minutes  No prepaid tariffs with unlimited minutes  Reposition 2GB 45€ plan to 34€ 3GB  Entertainment Contents (6 months trial): Spotify, Infinity, Vodafone Calcio, as a mean to stimulate the premium network experience  Data security service (1 year) VOICE + DATA PLANS: Strategy, prices and GB included in the offers analysis 3 Italy - Voice + Data Plans Plans distribution by Price and GB included Strategyoutline Sample: 3 ITA, Vodafone, TIM, Wind *Source: Merrill Lynch Global Wireless Matrix ‘14 35% 34% ‘15 ‘14 29% 29% ‘15 ‘14 25% 25% ‘15 GB Plan Price 14 Wind - Dismissed ‘’All Inclusive Unlimited’’ - Introduced new ‘’Magnum’’ plans available with 2, 4, 8 or 14GB of shareable data (with a lower price/GB than previous plan) Vodafone 2GB plan now includes 3GB at a lower price Three 2 GB ALL-IN-ONE prepaid plan: - Full price with no retention - Discounted with 30 mts retention - Cheapest with “Family Plan” Three Most competitive tariffs on the market both for large and small data allowances Tim 3GB plan now available with 4GB and lower price Vodafone Keeps premium positioning with 5GB plan, but this is now provided with a free extra SIM including 1GB of data allowance and unlimited voice Italy Market - ‘‘3G only’’ plans no longer on the market - General increase in data allowance size - Continuing price per GB decrease 146% ‘14 11% ‘15 12% MNO market share Dec’14Dec’15 Postpaid Prepaid Old offer3GLTE New offer 12.30 63% 146%
  • 66. 66Tariff Plans Benchmarking – 2H15 2H13 2H14 2H15 4G 3G 4G 3G 4G 2.9 3G 4G 1.6 3G 1.5 4G 1.6 2.9 3G 1.5 Operator Average 2H13 2H14 2H15 4G 3G 4G 3G 4G 4.4 3G 4G 3.6 3.1 3G 4G 3.6 3.8 3G Operator Average 2H13 2H14 2H15 4G 16.7 16.3 10.0 3G 4G 15.0 15.0 13.2 3G 4G 8.4 7.3 3G 4G 5.0 3G 4G 15.8 11.3 9.7 3G Operator Average 2H13 2H14 2H15 4G 3G 20.0 20.0 4G 22.5 3G 30.8 4G 15.5 12.0 3G 21.0 4G 15.3 15.0 3G 15.0 4G 16.6 13.5 3G 24.1 17.5 Operator Average R² = 0,4749 R² = 0,2137 0 € 5 € 10 € 15 € 20 € 25 € 0 1 2 3 4 5 6 7 8 Vodafone 3 Italy Wind Tim VOICE + DATA PLANS: Price per GB analysis 3 Italy - Voice + Data Plans Plans distribution by Price per GB and GB included Sample: 3 ITA, Vodafone, TIM, Wind *Source: Merrill Lynch Global Wireless Matrix GB €/GB 3G LTE Dec’14 Dec’15 Postpaid Prepaid Old offer 14 Analyzed Plans All LTE Plans <= 2 GB Plans 5-10 GB Plans > 10 GB Plans2-5 GB Plans Euro/GB Italy Market Market rationality (link between price and data allowance) is increasing as operators apply more homogeneous pricing 1 11 2 1 1 1 1 1 3 4 2 1 <=2 GB 2-5 GB 5-10 GB >10 GB New offer 12.30 63% 146%
  • 67. 67Tariff Plans Benchmarking – 2H15 3 Netherlands - Country Summary Nether- lands  Reached 100% in both mobile broadband penetration (72% EU average at December 2014) and LTE coverage (79% EU avg.)  ‘‘3G only’’ tariffs have mostly been replaced with LTE ones by MNOs, and are now only offered through B-brands and by MVNOs  Prices have signficantly decreased over the past year in parallel with an increase in data allowance by operators. This was more pronounced in the ‘‘data only’’ than in the ‘‘voice + data’’ market.  Tele2 recently became an MNO and operates through aggressive pricing. KPN, T-Mobile and Vodafone are the incumbents.  KPN provides the most attractive Value Added Services (Entertainment, Spotify, WiFi hotspots, etc.) whereas, at the other end, Tele2 includes very limited value added services within its offer -15.29 EUR Adjusted Big Mac Index MNOs market share (’15e) Mobile penetration Population 100% 16.8M 30% 6% 22% 42% COUNTRY SUMMARY: main indicators of the country Source: Merrill Lynch Global Wireless Matrix, Arthur D. Little Analysis Euro/GB 18,0 15,7 > 10 GB 2,7 5-10 GB 5,2 3,7 2-5 GB 9,4 5,7 <= 2GB 1H142H15 DATA PLANS (average) VOICE + DATA PLANS (average) LTE 3G LTE 3G 13,4 > 10 GB 3,2 5-10 GB 4,7 2-5 GB 7,1 8,6 <= 2GB 22,3 23,9
  • 68. 68Tariff Plans Benchmarking – 2H15 R² = 0,9217 R² = 0,8201 0 € 5 € 10 € 15 € 20 € 25 € 30 € 35 € 40 € 45 € 50 € 0 1 2 3 4 5 6 7 8 9 10 11 12 KPN T-Mobile Vodafone DATA PLANS: Strategy, prices and GB included in the offers analysis 3 Netherlands - Data Plans Plans distribution by Price and GB included Strategyoutline Market average prices based on: • One prepaid 3G data tariff at a market average price • Spread of postpaid 4G data bundles • Significant movement in data allowances for its bundles • Value added services: - Free access to KPN WIFI hotspots • Extra value (discounts and service) for quad-play and household customers Value for price strategy based on: • The widest choice of ‘‘data only’’ tariffs available in the Netherlands • Price leader on its two 3G tariffs and three 4G tariffs • Shifted its tariffs which ensured it was not in the same GB range as KPN • The 3G tariffs offer free 250MB of data for every top-up No data only tariffs available Sample: KPN, Vodafone, T-Mobile, Tele2 * Source: … -15.29 72% 100% Competitive price strategy based on: • Premium prices for its 3G & 4G tariffs • Offers are generally concentrated towards the lower end of data bundle range • Price evolution differs from the other operators by lowering prices but not increasing data allowance • Limited value added services except for free customer service GB Plan Price Netherlands Market The only 3G plans are small bundle - ‘’3G only’’ tariffs KPN and T-Mobile Both operators have lowered their prices and also offered more data Vodafone Lowered its offers’ pricing without increasing data allowances, unlike the other operators KPN Increased its data allowances more markedly than its competitors T-Mobile Shifted its largest data tariff which ensured it remained the provider of the largest data bundle on the market ‘14 ‘15 42% ‘14 23% 22% ‘15 ‘14 5% 6% ‘15 41% ‘ ‘ ‘ ‘‘14 ‘15‘ 31% 30% MNO market share Jun’14Dec’15 Postpaid Prepaid Old offer3GLTE New offer
  • 69. 69Tariff Plans Benchmarking – 2H15 4G 3G 4G 3G 4G 3G 4G 3G 4G 3G Average 18.0 15.7 20.0 15.0 17.5 16.0 Operator 1H14 2H15 20.0 17.5 10.0 16.0 14.5 13.4 4G 3G 4G 3G 4G 3G 4G 3G 4G 3G Average 9.4 5.7 Operator 1H14 2H15 12.0 4.5 10.0 6.2 5.8 6.8 4G 3G 4G 3G 4G 3G 4G 3G 4G 3G Average 5.2 Operator 1H14 2H15 5.3 3.3 6.3 3.9 4.0 3.7 4.1 4G 3G 4G 3G 4G 3G 4G 3G 4G 3G Average 2.7 Operator 1H14 2H15 2.7 R² = 0,9764 R² = 0,9527 0 € 2 € 4 € 6 € 8 € 10 € 12 € 14 € 16 € 18 € 20 € 0 1 2 3 4 5 6 7 8 9 10 11 12 13 KPN T-Mobile Vodafone <= 2 GB Plans 5-10 GB Plans > 10 GB Plans2-5 GB Plans DATA PLANS: Price per GB analysis Plans distribution by Price per GB and GB included Euro/GB Analyzed Plans 3 Netherlands - Data Plans 2 2 3 1 1 11 1 1 1 4 6 4 <=2 GB 2-5 GB 5-10 GB >10 GB GB €/GB Sample: KPN, Vodafone, T-Mobile, Tele2 Netherlands Market MNOs quite close in terms of pricing with: - T-mobile slightly lower prices - Vodafone slightly higher prices - KPN market average prices - Tele 2 is not offering ‘‘data only’’ tariffs 3G LTE Jun’14 Dec’15 Postpaid Prepaid Old offer New offer -15.29 72% 100%
  • 70. 70Tariff Plans Benchmarking – 2H15 R² = 0,7251 R² = 0,6444 0 € 5 € 10 € 15 € 20 € 25 € 30 € 35 € 40 € 45 € 50 € 0 1 2 3 4 5 6 7 8 9 10 11 12 KPN T-Mobile Tele2 Vodafone VOICE + DATA PLANS: Strategy, prices and GB included in the offers analysis 3 Netherlands - Voice + Data Plans Plans distribution by Price and GB included Strategyoutline Premium price strategy based on: • Three 4G tariffs spread across the range of GB bundles • 2GB plan discontinued and replaced by 5GB and 10GB offerings • All tariffs offer free access to KPN WIFI hotspots & access to entertainment • 10GB plan includes free Spotify premium • Extra value (discounts and service) for quad-play and household customers Value for price strategy based on: • The widest choice of tariffs available on the unlimited voice + data market • Three out of its four tariffs are below the market average price • Now has the largest data bundle available • Offers voice share plans for an additional €7.50 a month No frills price leadership based on: • Three 4G tariffs targeting customers who seek low data bundles • Consistently the lowest price in each of its GB ranges • No plans offered over 4GB • No value added services offered with their tariffs Market average prices based on: • Two middle of data range tariffs • Both available at a discounted price including a larger data allowance than in the past • 3GB tariff offered at a premium with respect to T-Mobile’s 3GB tariff • 7GB tariff offers a free multi-sim GB Plan Price Sample: KPN, Vodafone, T-Mobile, Tele2 T-Mobile Shifted its largest data tariff therefore remaining the provider of the largest data bundle on the market (12 GB) Vodafone Shifted its tariff resulting in its prices remaining in the market average Tele2 Offers significantly low prices for its small data 4G bundles Netherlands Market - Operators have generally lowered their prices and offered larger data bundles - No ‘’3G only’’ unlimited voice + data tariffs available KPN Broadened its offerings from a single 2GB plan to two different larger allowance tariffs (5GB and 10GB) ‘14 ‘15 42% ‘14 23% 22% ‘15 ‘14 5% 6% ‘15 41% ‘ ‘ ‘ ‘‘14 ‘15‘ 31% 30% MNO market share Jun’14Dec’15 Postpaid Prepaid Old offer3GLTE New offer -15.29 72% 100%
  • 71. 71Tariff Plans Benchmarking – 2H15 4G 3G 4G 3G 4G 3G 4G 3G 4G 3G 25.0 30.0 16.3 Average Operator 1H14 2H15 16.5 22.3 23.9 22.4 27.0 4G 3G 4G 3G 4G 3G 4G 3G 4G 3G Average 7.0 Operator 1H14 2H15 10.3 7.1 9.7 7.1 8.6 8.8 4G 3G 4G 3G 4G 3G 4G 3G 4G 3G Average 4.0 Operator 1H14 2H15 6.5 4.6 4.7 5.3 5.5 4G 3G 4G 3G 4G 3G 4G 3G 4G 3G Average 1H14 2H15Operator 3.2 3.2 R² = 0,9867 R² = 0,9698 0 € 5 € 10 € 15 € 20 € 25 € 30 € 35 € 0 1 2 3 4 5 6 7 8 9 10 11 12 KPN T-Mobile Tele2 Vodafone <= 2 GB Plans 5-10 GB Plans > 10 GB Plans2-5 GB Plans VOICE + DATA PLANS: Strategy, prices and GB included in the offers analysis Plans distribution by Price per GB and GB included Euro/GB Analyzed Plans 3 Netherlands - Voice + Data Plans 1 1 2 1 1 1 11 1 1 1 4 3 2 3 <=2 GB 2-5 GB 5-10 GB >10 GB GB €/GB Sample: KPN, Vodafone, T-Mobile, Tele2 3G LTE Jun’14 Dec’15 Postpaid Prepaid Old offer New offer -15.29 72% 100%
  • 72. 72Tariff Plans Benchmarking – 2H15 3 Spain - Country Summary Spain  Both LTE coverage (76%) and mobile broadband penetration (77%) are in line with EU average (79% and 72% respectively as of December 2014)  The market keeps trending towards a generalized increase in the size of data allowances, paired with an increase in prices, with the exception of Yoigo that employs an aggressive low-price strategy  Vodafone is positioned as a premium player whose offering covers all user profiles, from light to heavy users  In stand-alone mobile price plans, all competitors, except Yoigo, have started to use value added services (cloud, content) as differentiator; roaming starts to be a factor in high-end price plans 8.00 EUR Adjusted Big Mac Index MNOs market share (’15e) Mobile penetration Population 112% 25% 7% 7% 29% 32% COUNTRY SUMMARY: main indicators of the country 47M Euro/GB > 10 GB 5-10 GB 4,2 4,6 4,6 2-5 GB 7,8 7,6 6,2 <= 2GB 11,1 11,4 11,1 2H132H142H15 DATA PLANS (average) VOICE + DATA PLANS (average) LTE 3G LTE 3G Source: Merrill Lynch Global Wireless Matrix, Arthur D. Little Analysis 10,9 > 10 GB 5-10 GB 8,3 5,5 2-5 GB 15,0 10,6 10,3 <= 2GB 28,8 24,2 others

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