Telenor Norway became the latest EU operator to launch a 5G service in 1Q20, thereby adding Norway to the list of 5G countries in the region. Based on InfoCom's monitoring, 5G plans (inclusive of SMS and voice) are typically being offered with a 5G-ready smartphone or as a Fixed-Wireless Access (FWA) solution, while pricing normally varies on the maximum speed guaranteed since data volumes are already significant or unlimited. Other schemes include offering heavy subscription discounts as a subscriber acquisition strategy, with Vodafone Spain offering a 50% discount on the first 12 months to its 5G Unlimited tariff with a 24-month contract. The same approach was also implemented by its British segment, offering a 50% discount but only on the first six months of subscription. Aside from subscription discounts, we also observed some operators bundling OTT video and gaming applications to their 5G mobile plans such as TIM in Italy and EE in the UK (e.g. TIMGames, Amazon Prime Video, BritBox, Roam Further, BT Sport Ultimate).
We have seen some positive impact in light of these schemes. For instance, Vodafone UK recorded faster expansion in contract subscriptions (+348 000 annual net adds) and higher mobile service revenues (+1.6% YoY) driven by its data services. In terms of mode of access, we have seen operators increasingly marketing plans based on fixed wireless access (FWA) aside from 5G-compatible smartphones. For instance, Magenta in Austria added a 5G FWA service to its Internet portfolio called "Gigakraft 5G". The said offer helped the operator sustain revenue growth amidst the COVID-19 outbreak, particularly in the data segment (~3% YoY growth in mobile service revenues in 1Q20). Vodafone Italia also recorded sustained growth in convergent subscriptions (10% YoY), partly supported by its 5G mobile plan and fibre broadband service bundles. On the other hand, we haven't seen the same magnitude of impact on mobile broadband accessed through USB dongles, pocket modems, and sticks. As per InfoCom's monitoring, subscriptions to these modes are growing, but only marginally, due to the increasing customer preference to other types (via smartphones and partly FWA).
InfoCom expects that the COVID-19 outbreak will serve as an impetus for operators to calibrate their broadband strategies, especially on 5G adoption. As countries in Europe started to increasingly relax quarantine measures, we are expecting some acceleration in 5G deployments in the next periods - as demand for faster bandwidth and higher data volumes is expected to remain unabated. In terms of broadband access, operators could explore pivoting increasingly to offering FWA-type of service especially for the residential segment, as this could be deployed faster with less operational requirements than a fixed broadband service. Besides, an FWA-type solution could enable faster 5G network exposure among budget-conscious consumers as compatible smartphone devices remain relatively expensive so far.- Click here to find out more about operators’ 5G deployment status and plans