MARKET OUTLINE – IRISH MOBILE MARKET REACHES ITS PEAK
- By the end of 2012, the Irish mobile phone market had peaked – subscriptions exceeded people in the market as penetration reached 119%
DECLINING REVENUES ACROSS THE MARKET
- Network offers had become richer and deeper as operators aggressively fought for market share. Revenues were driving downwards, which further fueled the competitive roundabout
VODAFONE’S NUMBER ONE MARKET POSITIONING WAS AT RISK
- Vodafone were number one in the market, but their market share of subscriptions was dropping thanks to highly aggressive new entrants, who were effectively buying share.
- Tesco was offering cheap offers on the Pre-Pay side, and Three Mobile were going after the Bill Pay market with their “All-you-can-eat” data offer.
AS THE MARKET STAGNATED, PRE-PAY WAS IN DECLINE VS THE GROWING BILL PAY SEGMENT
- The main growth in the market was in conversion from Pre-Pay to Bill Pay contracts.
However, despite its overall market leader position, Vodafone were not No. 1 in the more dynamic and profitable Bill Pay market.
WITH A COMPETITOR MERGER AFOOT, VODAFONE HAD A BATTLE ON ITS HANDS – THE FIGHT TO MAINTAN FIRST PLACE
- In July 2014, just one year into Vodafone’s new strategy, everything was set to change for the Irish telecoms market. Three Mobile were to purchase O2 Ireland in a deal worth €780m, acquiring approximately 1.5m active customers overnight and growing their market share from 9% to 34%.
- This posed a serious threat to Vodafone’s leadership. Market growth was being driven by Bill Pay where O2 were the incumbent leader5. Coupled with Three Mobile’s rapidly growing market share and deep discounts – the cheapest offers within Bill Pay – and you have a marriage made in telco heaven.
- Vodafone faced a hellishly real danger of slipping behind post-merger.
1. ComReg Quarterly Key Data Reports, 2008-2012
2. ComReg Quarterly Key Data Reports, 2011-2014
3. Vodafone Market Sizing research, Empathy, 2017
4. ComReg Quarterly Key Data Report Q4 2012
5. Vodafone’s base was 36% Bill Pay; O2’s base was 38% Bill Pay; Three’s base was 11% Bill Pay.