The UK market for mobile and mobility services continues to be incredibly dynamic, with new technologies entering, ongoing merger and acquisition activity changing, and continued and sustained price compression. 

Given it has been a few months since we last reviewed the market, here at TNC we felt it was high time we reported on the latest developments.  With so much ground to cover, we have focused this article on the three biggest topics: latest trends in pricing, latest trends in device procurement, and a review of the most recent developments in coverage enhancements. 

Before we dive in, let’s just cover off a naming convention – what exactly is the difference between “mobile” and “mobility”?  Simple really – “mobile” tends to be used to mean “connectivity using cellular networks”, whereas “mobility” includes other mobile, wireless technologies, such as satellite, other forms of radio etc.  Given the rapid convergence we are seeing between cellular and satellite connectivity, we certainly believe we are seeing “mobile” and “mobility” becoming the same thing… 

So, naming conventions cleared up, let’s get into our three topics.  

Price Trends 

As TNC has been reporting for many years now, the unit price of mobile voice and data in the UK continues to fall, and continues to fall at a rapid rate.  Here are the key headlines of our latest market analysis: 

• Metering the cost of mobile calls and SMS has essentially stopped and almost all contracts include some form of fixed cost for unlimited calls and SMS.  For clarity, this specifically relates to calls and messages sent over cellular connectivity rather than over data connectivity 

• The biggest variables in mobile tariffs now relate to the volume and price of data, and whether the data provided is purely for usage in the UK, or whether it can be used overseas, whether in the EU or rest of the world (ROW) 

• The unit price of data of all types (e.g. UK, EU, ROW) continues to fall quickly 

• Whilst consumption of data continues to increase, broadly speaking, the unit price is falling faster than consumption is rising 

For the reasons set out above, most organisations could save money on their mobile costs at the end of each contract term, were they to drive their pricing to align with the best pricing available in the market, even taking into account that they may need to increase the volume of data they provide to their users. 

Furthermore, TNC continues to see opportunities for most organisations to save even more money on their mobile costs by updating the structure of their tariffs to align with their actual usage.  Put simply, every mobile contract is a guess about how the state of the mobile estate will change over the term of the contract – will you add more connections, reduce the number of connections, use more data, use less data etc.  Like most guesses, many of these will turn out to be wrong, so almost certainly by the end of your contract term, your mobile tariff will no longer be ideally structured for your actual usage, and addressing this will save you money. 

Finally, almost all organisations’ mobile bills are higher than they need to be because they are in some way suboptimal – there will be connections you’re paying for that you no longer need, there will be usage that shouldn’t be used, and often there’s erroneous billing. 

Add up the savings from lower unit costs, optimising your tariffs, and cleaning your estate, and the cost savings in mobile continue to be significant. 

Device Procurement Strategies 

A big area of concern for many organisations is how to deal with the cost and complexity of procuring mobile phones.  There are a number of issues driving these concerns: 

• Devices are getting more expensive, typically at above-inflation rates.  For example, Apple has just replaced the iPhone SE, which cost ~£330 ex. VAT, with the iPhone 16e, which costs ~£415 ex. VAT – this is an increase more than double the rate of inflation 

• Devices are an increasing proportion of total cost of ownership (TCO) for mobile estates.  As noted above, airtime costs are falling and airtime usage is increasing.  Let’s therefore take a simple example of a tariff for airtime costing £10 per month in 2022, giving a total cost of airtime of £360 over 3 years.  At that time, the cost of an iPhone SE cost the equivalent of 92% of the airtime, which has now risen to 116% of the airtime 

In the face of these price increases, what strategies are open to organisations? 

• One strategy often mentioned to TNC is Bring Your Own Device (BYOD), whereby employees are allowed, or even encouraged, to use their own mobile phone for work purposes.  The benefits to the employer are obvious – not having to bear the cost of devices and/or airtime.  Organisations often propose that employees will also gain the benefit of being able to use any device they want, and not having to carry around two devices.  However, TNC’s experience is that employee take-up of BYOD is almost always far lower than hoped, and the costs and complexities of managing BYOD mean it delivers very little net benefit.  There are many reasons for this, but often it is as simple as the fact that most people who suggest BYOD as a strategy are senior, tech-savvy people who care about their mobile phone, but most employees see it as a utility and just want to be given a decent device if they need it to do their job 

• Another strategy that is often raised is leasing devices.  Leasing is an interesting strategy option because the only upside is not having to capitalise the cost of devices, but there are significant downsides – the interest rate can be very high, the additional costs for services such as insurance are higher than could be gained in the open market, and it can put a time limit on the life of a device by tying it to the term of the lease.  As we’ll see later in this article, device lifecycle is getting much longer and leasing can negate these benefits 

• The strategy TNC sees as optimal can be summarised as “buy and sweat”.  In TNC’s experience, devices are able to last much longer than was the case some years ago, so if you can make even a percentage of your devices last more than 3 years, and even more than 4 years, it significantly reduces the TCO of your devices 

Of course, that opens up the questions of how to buy and from whom.  TNC still sees many organisations choosing to buy devices via a technology fund provided by their airtime supplier, and this is a perfectly sensible approach.  Equally, many organisations would rather treat mobile phones as a capital purchase, akin to a laptop, and this approach can also be successful.  Either way, by owning the device yourselves, you avoid the issues with BYOD and leasing. 

The final question is from whom to buy your devices.  The simplest approach is to buy them through your airtime provider, which makes the whole service their responsibility, and makes them clearly responsible for staging and setting up devices.  However, there can be cost savings possible through buying from other suppliers, particularly for non-Apple products.  TNC’s advice is simple – shop around and see who is offering the best deal. 

Coverage Enhancements 

One of the biggest areas of innovation is in the technologies coming to market to enhance mobile coverage.  Whilst for most organisations not having mobile signal in certain places might be an inconvenience, for many organisations it can be a huge issue.  For example, for utilities that need IOT connectivity all across the country, or for roadside recovery organisations helping customers in isolated locations.  

For some years now, organisations have been using “roaming SIMs” to expand their mobile coverage beyond that offered by their main mobile provider.  Roaming SIMs are SIMs often tied to networks outside the UK, which have the ability to roam to any network in the UK, and therefore can deliver wider connectivity than a SIM tied to a single network.  Whilst beneficial, roaming SIMs are considerably more expensive than domestic SIMs, and only provide some coverage enhancement – they certainly don’t provide ubiquitous connectivity.  

The big innovation for coverage enhancement is coming from satellite, particularly Low Earth Orbit (LEO) satellite, and even more specifically “Direct to Cell” (DTC) connectivity. 

Everyone reading this article will be aware of the rise of Starlink, which is aiming to offer internet access anywhere in the world.  However, whilst useful for fixed wireless, or even vehicular wireless, Starlink hasn’t had a solution for individuals and their mobile devices. 

By contrast, the aim of DTC is specifically to connect an individual’s mobile phone to their cellular network but using an LEO satellite when a terrestrial base station can’t be accessed. 

This is a very new market, so the exact ways in which it will operate are still being defined, but TNC can already see the following key characteristics: 

• Airtime providers are looking to partner with LEO satellite providers.  For example, Vodafone in the UK has partnered with AST SpaceMobile (https://ast-science.com/), and VMO2 has partnered with Starlink, aiming for 95% landmass coverage by the end of 2026 

• The initial aim is to provide limited capabilities when connecting via satellite, so likely reduced bandwidth, focus on core connectivity, and a limited range of apps, with a focus on communication apps (e.g. messaging), plus mapping apps  

Of course, the expectation is that these limited capabilities will become enhanced over time as the capabilities of the individual satellites and the size of the constellations expands, although it should be noted that the addition of LEO coverage may only impact outdoor coverage for now. 

However, what TNC hasn’t yet seen is how airtime providers intend to charge for this capability – will it be bundled in with their existing airtime costs, or an add-on, and if it is an add-on, how this will be costed, metered etc. 

What is certain though is this could be game changing for those organisations requiring enhanced connectivity, whilst being profoundly impactful for those service providers currently making money out of solutions, such as roaming SIMs, that might quickly become legacy technologies… 

How Can TNC Help?

For over 20 years, TNC has been helping over 320 of the UK’s largest and most demanding organisations develop and execute industry-leading strategies for their mobility services, including delivering significant cost savings.

If you’d like to understand how we could help you, let’s talk: get in touch here.

TNC holds over 4.3m active market data points covering WAN, data networks, fixed voice and mobility

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