Fighting talk page 15 Industry leaders reveal strategies and trends for 2017
Launch pad page 20 Sky Mobile boss reveals proposition details in depth
Bundle king page 27 Retail staff give their device bundling advice
Sharp insight. Inspiring analysis www.mobiletoday.co.uk December 2016 ÂŁ2.70
Balance of power Unregulated by government, restricted by operators. The challenges facing MVNOs
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Peace on earth? Not in mobile Escalation of network spats spills over into the public arena Traditionally the time of year for reconciliation and for letting bygones be bygones, this is far from the minds of those in the operator space moving into 2017. What started as muted spectrum grumblings has escalated to a very public dispute, which becomes more absurd by the week. We’ve seen Ofcom’s CEO projected on the side of buildings as a Spandex-clad super hero, a tit-for-tat ad banning rivalry, and clandestine counter briefings. It all makes for great headlines but networks should be aware that when you sling mud, everybody looks dirty in the eyes of the public. Just as a bad experience in a phone shop can lead customers to have bad expectations of all phone shops, attacks on rivals can impact consumer confidence on the industry as a whole. When combined with all four networks using different metrics to claim they have the best network, there is a real risk of negating all the positive work that has been done to change the industry’s image. It’s not just the public either. Strung out on a low parliamentary majority and tonguetied on Brexit, the government is hunting for a tub-thumping exercise that allows it to bury its own failings in someone else’s coffin. Without clear public understanding of what progress networks are making, this could be mobile coverage, as already hinted by two government reports in the last month that have tied productivity to mobile connectivity and suggested network sharing to fill network gaps. Perhaps Auld Lang Syne isn’t such a bad idea after all.
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ISSN 1472-0833 All material in this publication is covered by copyright. No part of this publication may be reproduced or transmitted in any form – electronic, mechanical, photocopying or otherwise – in whole or in part without written permission of the publisher. © 2016 Noble House Media Ltd. While considerable care has been taken in the production of this issue, no responsibility can be accepted for any errors or omissions. No responsibility can be accepted for unsolicited manuscripts, photographs, artwork or equipment. All correspondence is assumed to be intended for publication unless clearly stated otherwise.
Jack Courtez News & community editor Jack.firstname.lastname@example.org
Mobile Download Fast stats, facts and news
Analysis The key trends of 2016 under the microscope
Power 50 Looking into Margrethe Vestager, the European Commissioner for Competition and the mobile industry’s most influential regulator
Mobile Investigates Just how stable is the MVNO market and what role do MVNOs play in increasing competition in the UK?
Tech Guide Wearables, once the wonder product for manufacturers and retailers, do they still hold their sparkle?
World News This month’s latest news from around the world
Explores Industry leaders define their expectations for 2017 dealers and associated products
Interview Sky Mobile’s Vince Russell explains the details of its new proposition
10 reasons to sell… Why mobile recycling is one of the key additional services for retailers and dealers
iSellMobile The latest store news, bundling advice and interviews with Store Manager of the Year and Contact Centre Champion
www.mobiletoday.co.uk December 2016
DOWNLOAD Fast facts, stats, news and debate
The debate: Black Friday- Good or bad for the industry? GOOD
Sunetra Chakravarti, editor, Mobile Choice I REMEMBER trying to buy a box set of Disney movies last year at 2:30am online. When asked why by a slightly bewildered other-half, my answer was – because it was reduced. I didn’t really need them, having watched the movies dozens of times and not having the space to keep my guilty bulk-buy. But buy I did. Buyer’s remorse aside, Black Friday is a great way of getting consumers to remember that Christmas is (almost) around the corner and that they need to start getting their wallets out. And if they miss buying on Friday, most sales now extend to Monday (Cyber Monday) and sometimes to Tuesday! Sales bonanzas can affect buying patterns but Boxing Day sales haven’t put people off buying presents before Christmas. Indeed, it makes
customers buy more because of the deep discounts they want to take advantage of. This year, Carphone Warehouse revealed that it achieved ‘record-breaking’ Black Friday sales, selling one pay monthly contract every three seconds. The retailer also felt the effects of the increase in online shopping, reporting that website traffic increased by 78% from the previous year. For retailers, shopping dates such as Black Friday help silo buying periods, with three distinct ones now identified: Black Friday weekend, peak season all the way through to Christmas Eve, and then Boxing Day sales. With 9% of all Brits buying their Christmas presents during Black Friday and Cyber Monday sales, it can only be a good thing. Right?
Jack Courtez, news editor, Mobile FORGET flying reindeer, the biggest Christmas myth is that Black Friday increases consumer spending over the period. Research by YouGov shows that the amount families are spending is actually decreasing from £822 in 2013 to just £796 in 2015. Therefore reducing prices in sales promotions beforehand does nothing more than reduce margins, and makes price the only differentiator. The result is a market that favours online, especially affiliate marketing and Amazon, and by providing a cut of any sales to these middlemen rather than their direct channels, networks are reducing their potential earnings and damaging their reputation as being the first point of contact for anything mobile. This damage to reputation also occurs in-store, as all the work that retailers have put into
improving their customer service is made moot over Black Friday, as overloaded shop staff despite valiant efforts, are unable to give customers the quality of service they expect. Coupled with research showing that verbal abuse of shop staff increases 66% on Black Friday, and the increased workloads, targets and working hours store staff already face for the period, not only is Black Friday to the detriment of a retailer’s profits and reputation it’s also to the detriment of their staff. Unfortunately, Black Friday shows no sign of stopping, with each retailer and manufacturer compelled to take part for fear of their rival grabbing their chunk of that family budget in the event, making Black Friday an innately reactive marketing event that prevents companies from playing to their own strengths.
Big releases Our round-up of the key releases this month BLU VIVO 6
SAMSUNG GEAR S3
HMD NOKIA 150
DORO DORO 6520
Its first UK release, offering near-flagship spec points at less than £200
Samsung’s retort to Apple’s Watch Series II comes in a slender ‘Classic’ version and a rugged-looking ‘Frontier’ model
Nokia’s muchdiscussed return begins not with a smartphone, but with a £20 feature phone
Launched in Three this month, meaning Doro now has a presence in every high street retailer
Stats What do Mobile readers think of Ofcom’s spectrum auction rule change?
The month in numbers
£50 on average wasted per customer per year on unused data
52% of video views now on mobile devices, up 16% YoY
Following the 140,000 strong petition, should mobile phone shops shut on Boxing Day?
1,000 UK contact centre jobs created by EE in 2016
£539m spent on mobile devices during black Friday
54th Britain’s 4G coverage national ranking according to a National Infrastructure Commission report
Source: mobiletoday.co.uk December 2016
GOOD MONTH ID Carphone Warehouse’s Three-based MVNO has grown to 450,000 customers.
GREENTECH DISTRIBUTION The device distribution, testing, repair and recycling specialist rankqs ninth in the Sunday Times Fast Track 100.
FITBIT The Fitbit Flex took three out of five top spaces on Amazon’s top-selling Black Friday sports promotions.
Ups & downs THREE Its auction proposals ignored by Ofcom – unless its latest lobbying attempt succeeds – its network capacity squeeze shows no sign of easing.
OFCOM Its spectrum rules coupled with its four-player-market demand sees the regulator hoisted by its own petard.
BROADBAND PROVIDERS, MOBILE OPERATORS AND CUSTOMERS ‘Snooper’s charter’ comes into force requiring every piece of user data to be kept 12 months
Movers A look at who has changed role recently MIKE MCTIGHE
OFCOM BOARD MENBER
O2 TERRITORY MANAGER
VODAFONE RETAIL PERFORMANCE MANAGER
DELL EMC PRESIDENT
OPENREACH CHAIRMAN The first-ever chairman of Openreach, following its separation from BT at the hands of Ofcom.
SAMSUNG HEAD OF RETAIL SALES AND TRAINING A vast knowledge of retail operations gives Samsung a knowledgeable addition to their retail team.
FUSE UNIVERSAL, HEAD OF MARKETING AND COMMS George will provide Vodafone’s internal training and comms portal.
GLOBAL ENTERPRISE DIRECTOR Beginning 1 February, Humphries will fill the role vacated by Nick Jeffery upon his appointment as UK CEO.
www.mobiletoday.co.uk December 2016
UK’s 4G ranks 54th in world A GOVERNMENT report into the UK’s wireless infrastructure has concluded that Britain’s 4G network ranks 54th, beneath Albania, Panama, Peru and Romania. The document by the National Infrastructure Commission especially targets coverage along transport hubs such as railways, roads and city centres, where the country suffers from ‘digital deserts’ or not-spots as they are more plainly known. The Commission’s chair, former Secretary of State for Transport under Labour Andrew Adonis, stated: ‘Britain is 54th in the world for 4G coverage, and the typical user can only access 4G barely half the time. Our 4G network is worse than Romania and Albania, Panama and Peru. Our roads and railways can feel like digital deserts and even our city centres are plagued by not-spots where connectivity is impossible. ‘That isn’t just frustrating, it is increasingly holding British business back as more and more of our economy requires a connected workforce.’ This is the second time in less than a month that a
parliamentary group has savaged the mobile industry over coverage deficiencies, with the British Infrastructure Group in November calling for localised roaming between networks in order to fill gaps. Its chairman, former Conservative party chairman Grant Shapps, also commented on the new report with very strong words for the likes of EE, O2, Three and Vodafone: ‘This confirms what we have been saying for a long time. Over the years, ministers have been far too easy on the glib promises given
by the telecoms providers. and I think that has been combined with ineffective and weak regulation from Ofcom. ‘Unfortunately, there has been a very long history of believing what the telecoms companies say rather than questioning it. The fact the report was commissioned is a good thing, but Britain should be all about infrastructure in this post-Brexit world and here is a real wake-up call to make sure it actually happens this time.’ The report seems to welcome 5G as the opportunity to correct any
past mistakes with 4G, with Adonis saying: ‘5G offers us a chance to start again and get ahead. If government acts now we can ensure our major transport networks and urban centres are 5G-ready in time to give British industry every chance to lead the world in exploiting its applications.’ However, no UK operator has formerly announced a timescale for launching 4G; there’s no industry consensus on what 5G will be, and the lower range means networks may need tens of thousands of additional small cell sites fitted, while the 2020 target appears hopelessly optimistic for many industry insiders. In fact, one recent book The 5G Myth, by Professor William Webb, states that there’s little consumer demand or applications that require what 5G offers. Speaking to Wireless, Webb stated: ‘There is so much publicity and hype about 5G it has become something of an ingrained belief. The 5G stakeholders all benefit from the interest, funding and potential that 5G promises. The emperor has no clothes, but few are willing to say this out loud.’
Odd Call: HO HO VR CARPHONE Warehouse launched the world’s first VR Santa Training School, in order to train the bearded gentlemen on the ins and outs of Virtual Reality before returning to their grottos. Santa-in-chief and newly trained VR expert Michael Facherty said: ‘Any Santa worth his weight in snow will be all over tech trends such as VR. Being Father Christmas is about far more than white beards and belly-laughs – you have to stay on top of the latest trends and must-have toys, which is why the VR training school is so useful.’ Apparently, Santa’s little helpers were also in attendance, but it is unclear whether they were undergoing training, or just there to oversee event elf and safety. 6
Petition fails to stop Boxing Day sales A 140,000 strong petition calling for retail stores to be closed on Boxing Day was rejected by Parliament after being debated. Jack Johnson, who started the petition, said retail staff should have the day off to allow them to spend time with their families. However, the Conservatives disagreed, stating:
‘Billions of pounds are spent by millions of shoppers on Boxing Day, and it is also a busy day for internet sales. The Government believes that all businesses should be allowed flexibility to meet their customers’ needs and offer consumers choice about when and how they want to shop.’ 79% of Mobile readers agreed
with the petition with one Carphone Warehouse staff member saying: ‘Definitely! Would be nice to actually enjoy Xmas and be able to spend it with all the family. Some people might find it surprising but the same products will still be available at the same price in the same shops come 27th December onwards.’
Vodafone ditches ‘use it or lose it’ PAYG approach VODAFONE Big Value Bundle pre-pay customers will be able to roll over any unused data from one month to the next, as long as they continue to top up the account. This follows earlier additions to Vodafone’s PAYG proposition this year including mid-month upgrades, increased data extras and inclusive data roaming. This makes the UK network another offering that allows customers to carry over data into
the next period, with Sky Mobile launching a three-year-long data rollover in November, and Virgin Media, O2 and ID also having some form of data rollover PAYG and SIM only tariffs are both increasing in market share, with PAYG increasing 3% from 2010 to 2015 and SIM-only increasing 11% in the same period. Collectively, this represented 32% of the market as of 2015.
Doro now stocked in every high-street retailer DORO’S 6520 handset will be available online and in store from Three, making it both the first Doro handset Three has sold, and the first time that Doro devices can be found in every major high-street phone retailer. Commenting on the news, Doro UK MD Chris Millington said: ‘We’re extremely proud to say our handsets are now available to customers through every operator in the UK and all leading retailers. Three UK is the vital last piece of our distribution jigsaw and we can now firmly say we have achieved our goal and have 100% presence across UK
network operators. This is also a great opportunity for Three UK – it enables its staff to offer a specialist device to the senior market.’ Targeted at senior users, the Doro 6520 is a feature phone with 3G internet through a simplified browsing system, hearing aid compatibility, and a volume three times higher than the average device. Discussing the new partnership between Three and Doro, Millington described Three as ‘a true challenger brand’. The device will be available for £49.99 from 16 December.
Solar Communications grows with Denwa acquisition LONDON-, Manchester- and Chippenham-based unified comms provider Solar Communications has purchased Burnley-based rivals Denwa for an undisclosed amount. The company explained that the purchase aims to add Denwa’s
managed service and cloud expertise to its existing offerings while also boosting its share of the business communications market. The company also believes there is substantial opportunity to increase ARPU by cross-selling services between the two
merging companies. The company’s services portfolio now includes edge technologies including SD WAN, Contact Centre, On-site and Cloud Storage, and a wide range of businessenhancing solutions. Solar’s CEO John Whitty said: ‘This
latest and exciting addition to Solar Group comes on the back of July’s acquisition of RDC. The timely and successful integration of RDC allows for further acquisitions to support the Group strategy, allowing Solar to address the under-served mid-market.’
www.mobiletoday.co.uk December 2016
Power 50 presents
Power 50 presents
Margrethe Vestager European commissioner for competition
Examining the UK’s most influential industry figures Leadership During her tenure as Denmark’s Minister for Economic and Interior Affairs, Vestager was described as the most powerful person in the Danish Government, pushing through unpopular changes to the country’s welfare system despite disagreement within the government. This approach is evident in the European Commissioner for Competition’s pursuit to investigate and prosecute some of the world’s most powerful tech companies over tax deals (Apple) and antitrust suits (Google). In doing so, Vestager once again showed a willingness to make judgements even when the outcome results in powerful enemies. A statement made when applying for her current role warned: ‘I will listen to everyone, from the largest multinationals to the representatives of small firms. From states to citizens. But the analysis of my staff and my own judgement will not be swayed by anyone.’
Innovation Opening a speech on competitions and investment in telecoms made on 28 November, the Commissioner for Competition began with the Monty Python joke, ‘what have the Romans ever done for us?’ From this beginning Vestager outlined a unified approach to mergers and 8
mobile network investment across the continent, hinting that the EU’s Electronic Communications Code was designed to allow state investment in telecoms to be simple and free from falling foul of ‘state aid’ accusations of favouritism. This represents a major shift in policy from her predecessor, Joaquin Almunia, who had previously worked towards creating a singular Europe-wide telecoms market with a single regulator in order to remove ‘national divergences’.
Breakthrough Animosity between the EU and American tech giants over antitrust suits isn’t anything new, with Microsoft’s famous lawsuit running from 1998 to 2003 and ending. However, no other European Commissioner for Competition has given so many tech giants a bloody nose in so little a space of time. In April 2016 the EU accused Google’s Android OS of being anti-competitive – it now has three antitrust investigations open against Alpabet, Google’s parent company. In August 2016 Apple was hit with an order to pay Ireland 13 billion euros previously avoided through ‘sweetheart’ tax deals. In September, the European competition regulator began sniffing around the ramifications of Whatsapp and Facebook’s data sharing to examine the impact on competition.
Having been profiled by the Financial Times, BBC and just about every UK broadsheet, the European Commissioner for Competition sits alongside an elite group of world leaders who have received the same level of widespread coverage. Meanwhile, Vestager balances the composure of a negotiator with news fodder quips like this one on Apple’s Ireland tax defence: ‘If my tax rate went down from .05% to .005%, I should have felt maybe I should have had a second look at my tax bill.’ Despite previously telling Reuters when chosen for the role that she is staunchly against ‘anti-Americanism’ interventions to curtail Silicon Valley’s power, her headline-grabbing comments and decisions have, in the eyes of some, made her a figurehead for those who resent the pervasive influence of big American tech firms in national economies.
Financial Muscle How many people can wipe away nearly £6 billion of Google’s revenue with a single lawsuit? Though unlikely, the EU’s antitrust law allows fines of up to 10% of a company’s annual revenue, which shows why companies dragged into antitrust suits fight tooth and nail for years to avoid them. However, Vestager has controversially said that she favours early settlement to fines agreed at the end of a case. Detractors argue that these settlements hinder the development of case law by depriving the system of precedents and thus keeping the interpretation of statutes open to debate.
Ones to watch Satya Nadella CEO, Microsoft After talks with the European Commission, Margrethe Vestager cleared his planned purchase of Linkedin, rapidly increasing Microsoft’s social media credentials. David Currie Chairman, Competition and Markets Authority Currie and the CMA’s chief executive Dr Andrea Coscelli, are Vestager’s counterparts in the UK and oversee decisions and cases designed to ensure fair competition by businesses active in the UK.
The MVNO balancing act An increasing number of MVNOs are falling by the wayside, and operators are pulling away from the sector. So how stable is the market? Kate O’Flaherty
he MVNO market is suffering multiple casualties. Five have fallen by the wayside over the past year, including the Sainsbury’s MVNO and the Post Office’s mobile offering. Because they are dependent on the networks, MVNOs often struggle to maintain the margins needed to survive in the competitive mobile market. At the same time, the operators do not always make it easy for new entrants, who in reality are their competitors and useful to serve only a minority of low-
spending customers. It is therefore no surprise that the networks are seemingly starting to pull away from this market. Vodafone has voiced concerns over the quality of offerings from MVNOs, while O2 is focusing on big brands such as the recent deal with Sky, its joint venture with Tesco Mobile, and its own MVNO, GiffGaff. Meanwhile, for EE, larger MVNOs such as Virgin Mobile and a bolstered offering from BT are a priority. This leaves Three as the only mobile operator actively looking to add MVNOs as part of its strategy to grow its customer base.
Yet just 10 years ago, the market looked very different. Multiple new entrants were emerging, and it seemed there was space for just about any brand to grab a share of the industry. So what happened? Partly, there was an expected consolidation as the market began to mature. Therefore, MVNOs are not necessarily an ‘unstable’ industry. In fact, MVNOs make up around 13% of the mobile market, comprising ‘a decent chunk’, says Kester Mann, analyst at CCS Insight. ‘A large amount of that is Tesco and Virgin – but overall it is still a big representation of the market.
Google’s network roaming MVNO in the US, Project Fi threatens to break the operator status quo
MVNO stability Taking this into account, it is difficult to see how the MVNO market will change dramatically in the coming years. According to Declan Lonergan, analyst at 451 Research: ‘It’s hard to see operators having a commercial interest in handing off more spectrum to MVNOs.’ He explains: ‘If you go back, the model was the shake up of the industry; the market was growing strongly. But over the past few years, the share of the market doesn’t feel like it’s moving. The host networks have had a gatekeeper position and, despite the best efforts of regulators and end users, it feels like the operators are in control.’ This is because operators tend to look at MVNOs as a distribution outlet, Lonergan says. ‘It makes sense to hand over to the MVNO to manage some of the low ARPU customers; then the operator still gets the wholesale revenue. Operators see there is 5% or so of their base that can be well served in this way.’ Operators do not release the commercial deals, but the classic model sees the MVNO buy wholesale minutes, texts and data at an agreed rate. ‘Then the MVNO hopes they can build a customer base to build a margin – and margins aren’t great so it December 2016
operator in our business model – they are our partners.’
becomes a scale business,’ Lonergan explains. ‘This is why supermarkets and those who have the scale tend to do well. But at the same time, the recent failures of MVNOs such as Sainsbury’s show that brand alone is not enough to carve a niche, Ru Bhikha, mobiles expert at uSwitch.com, points out. In addition, he says, operators make it hard for MVNOs to be competitive: ‘Unfortunately, shifts in the mobile market have facilitated the wing clipping of the mobile virtual network operators by the big four, who lay down strict ground rules to those paying to piggyback off their networks.’ These restrictions may include delaying access to a network’s 4G spectrum, making it harder for MVNOs to compete. In addition, Bhikha says: ‘To mobile operators, successful MVNOs that survive the market – GiffGaff, iD and Tesco Mobile – offer the same level of threat as any other rival because they typically undercut the big four to offer some of most attractive Sim-only deals on the market.’ There are two different types of MVNO: one that is reliant on the operator for everything and the other is able to function more independently. Most MVNOs are ‘light MVNOs’, which rely on 10
using the operators’ masts and core mobile network to deliver a service, explains Rob Davis, head of converged products at Gamma. This is the quickest and cheapest way to set up, which is easier for small MVNOs. ‘But it does mean the mobile network is in full control of the service and so can restrict the services the MVNO can sell, reducing their potential market share,’ he says. In contrast, ‘full MVNOs’, own their own mobile core network infrastructure. ‘While this is much more expensive and timeconsuming to set up, it gives the MVNO much greater control of the products and services they offer and access to more segments of the market,’ says Davis. Lonergan adds: ‘Some MVNOs don’t have their own infrastructure and depend on the host for everything. Then others, such as Virgin, depend on their host for radio access but they do have a core network capability – things like billing – they invest and it gives them the opportunity to differentiate a bit.’ Taking this into account, full MVNOs, which include the likes of Gamma and Lycamobile, say they are mostly able to function independently, financially and free of operator influence. Lyca
Group chairman Allirajah Subaskaran says: ‘Lycamobile is a full MVNO, which means we use one mobile network at a time for access, but we are able to move networks should there be a failure or our contract expires. ‘We have already done this in several countries. We maintain a healthy independence from our mobile network operators but work in a highly interdependent way. We have never experienced any interference from an
But at the same time, MVNOs are not necessarily a priority for the networks. Experts say all the mobile operators are pulling away from MVNOs – apart from Three. Most operators will also consider deals that could potentially offer scale, such as Sky. According to Chris Millington, FreedomPop non-executive director and Doro UK MD: ‘Most of the networks aren’t aggressive in that area any more because it’s too difficult to be competitive, with the exception of Three, which is a very strong disruptor brand.’ Vodafone uses network performance as a differentiator in the UK, which group CEO Vittorio Colao says can make it harder to hand out MVNO deals. ‘People are not always willing to meet certain quality parameters. In other words, we will not give unlimited MVNO deals; we want to have partners.’ Colao thinks it’s wrong for the regulator to use MVNOs to increase competition. ‘It’s very
short-termist, because it puts pressure on the industry. It’s different when it comes from a deliberate commercial structure: We work well with Lebara, and Lebara markets towards certain ethnic groups.’ This is the case across the board: MVNOs are seen by operators as a route to addressing certain market segments. ‘The network’s own view of how well they can access different market segments will influence how supportive or not they are of MVNOs,’ says Davis. After all, MVNOs that ‘just re-badge standard mobile services’ provide little additional choice, Davis says. ’MVNOs can only provide real choice when they have the capability to deliver a different product or service.’ Increasing the role of MVNOs in the UK could therefore pose a challenge. The MVNOs themselves realise it is a difficult market, with some comparing the current landscape to a cartel. The People’s Operator – an ethical MVNO that has the likes of Wikipedia founder Jimmy Wales working on its platform – is ‘totally independent’, says the company’s founder Mark Epstein. He says the US market is far more lucrative than the UK, partly due to higher ARPU. ‘The UK is dominated by mobile operators or MVNOs owned by them – such as GiffGaff, or iD Mobile run by Carphone. These can keep players such as us out of the market. With this in mind, Epstein says the UK market has been degrading over the past few years. ‘You have to have enough margin to cover your cost, and margins in purely mobile are reduced,’ he explains.
Regulation There is no regulation around the MVNO market and this could stifle new entrants further. Epstein thinks the regulator needs to intervene for the market to be able to truly thrive. ‘It is important to have the ability for new players to set up and to www.mobiletoday.co.uk
achieve true product innovation. I do think this comes from intervention from government. ‘When networks feel it’s in their interest – when they are being looked at in the case of mergers – they are stimulating competition and it’s very cartel-like now. There is no mandate to even provide competitive wholesale terms in the UK,’ he adds. At the same time, an innovative offering is important to enable an MVNO to thrive. One such offering comes from FreedomPop, an MVNO giving away texts, minutes and data for free for light users. In addition, new players such as Google could disrupt the market in the future. There is also space for more niche MVNOs, says Shanks Kulam, co-founder of x-Mobility, the MVNA for Three. He cites the example of the green utility Ecotricity, which recently launched its MVNO Ecotalk. ‘It has launched the first carbonneutral MVNO. Its customer base is comprised of 100,000 plus people who care about green. Even if it just transfers 25% of those, it’s a sustainable niche. The MVNO market still has potential to grow, if only slightly, and players such as Sky that are able to offer mobile as part of a broader offering will also win. But unless operators change their policies, the smaller players will still be held back by the networks. ‘To nurture and protect healthy competition in the mobile market, we need to make life much easier for MVNOs,’ Bhikha says. For example, he says, this could include ensuring that all challenger brands ‘are able to offer 4G to their customers as standard’. Therefore, the role of MVNOs can be increased if they become closer to operator partners, at the same time using their own assets and infrastructure, says Mann. Yet he adds: ‘Whether they can do that remains to be seen.’
The future for MVNOs Internet of things (IoT) networking is bringing new opportunities for specialist MVNOs, as is the arrival of eSim technology that can allow ‘remote provisioning’ of SIM cards, says Dean Bubley, director, Disruptive Analysis. ‘Mobile operators are conscious that they cannot always address complex verticals such as cars, which often travel across borders and need customised connectivity and management. ‘While some are developing their own IoT platforms, a broad array of device-centric specialists are looking at bundling the connectivity with additional management, control and analytics functions – and they take on MVNOs as part of their portfolio.’ Further down the line, the definition of an ‘MVNO’ may change still further, he predicts: ‘As the industry moves towards 5G and also core-network virtualisation (NFV), there are many new
variations on the sector that become possible. In the future, an MVNO may have specific network capabilities, rather than just simple capacity resale, he adds. This could be based on performance or enhanced security measures, for example. In addition, the long-term vision for ‘network-slicing’ to be enabled by 5G could create a chance for ‘slice operators’, Bubley suggests. On the radio side, the development of LTE in unlicensed spectrum, and especially MuLTEfire technology, might allow venue owners to run their own 4G networks as ‘neutral hosts’ – with the mobile operators acting as MVNOs onsite. ‘In other cases, it could mean that enterprises become their own MVNOs, with roaming relationships for users moving beyond their premises. ‘Other advances around spectrum sharing, or liberalisation of mobile network codes also help to blur the line between network operator and MVNO.’
The rise of the connected car offers new opportunities for specialist MVNOs.
Smartwatches The darling of MWC 2014, smartwatch sales halved in Q3 2016, with Apple hit hardest with a 71.6% decline according to IDC. However, with Samsung’s Gear S3 out now, Android Wear 2.0 coming early 2017 and Apple’s updated watch now in its first full quarter (its September launch was just too late for Q3 reporting), is there a second wind coming for smartwatches? Here’s a quick market overview
49.4% Apple Watch share of the market
Android Wear market share by 2020
Number of Apple Watches sold every minute
9.5 million Active Fitbit users (DMR stats)
(IDC Worldwide Quarterly Wearable Device Tracker stats)
28.3 million Number of wearables sold in 2016
Samsung Gear S3 Price: £349 With fantastic specs on-board, the Gear S3 is available in two variants – Frontier and Classic. Frontier is ideal for travellers, adventurers and explorers, with an IP68 waterproof rating and glass display sheathed by Gorilla® Glass SR+. The Classic variant looks sleeker and more formal, and Samsung has got the detailing just right to rival other luxury watches out there.’ Source:
Strong Apple sales ‘Sales growth is off the charts. In fact, during the first week of holiday shopping, our sell-through of Apple Watch was greater than any week in the product’s history. And as we expected, we’re on track for the best quarter ever for the Apple Watch.’ Tim Cook, CEO, Apple Perfect for ‘The Samsung Galaxy Gear range is perfect for someone like me who likes to keep in the know, with notifications being sent to your wrist – and for someone active as it tracks your steps. It’s because it makes communication a little bit simpler that it’s my favourite accessory.’ Aaron Robinson, Shop Idol 2016 winner, Tesco Mobile
Apple Watch Series 2 From £399 With Series 2, Apple has ramped up the specs on its lone wearable range massively. Activity Rings track daily activities, be it standing, moving or exercising, and it can survive in as far as 50 metres under water. At 1000 nits, it’s the brightest display Apple has ever included in any product, and you will soon be able to play popular gaming apps such as Super Mario and Pokemon Go.
Expectorations ‘Q4 performance will be key to better assessing the long-term prospects of the improved watch models. Apple needs to make a strong marketing push during the holiday shopping season, especially to highlight new and compelling apps for its platform. Meanwhile, its renewed focus on fitness functionality puts it in more direct competition with Fitbit. The inclusion of GPS by Apple and many other vendors now poses a big threat to traditional GPS watches and fitness trackers.’ Daniel Matte, analyst, Canalys
December around the world Africa Morocco – Orange country Orange has announced its launch in Morocco, where it will replace the Méditel brand. With 14.2 million customers, Orange’s Moroccan subsidiary brings together the second largest number of customers within the Group’s Middle East and African footprint, after Orange Egypt. Méditel was the country’s first 4G operator, launching the ultra-fast mobile service in June 2016 and currently achieving 42% population coverage on top of its existing 99% 2G and 3G coverage. South Africa – Vodacom financials Vodafone’s African subsidiary, Vodacom, reported 4.2% service growth in November due to strong customer and data growth in South Africa. This included 5.6% half-yearly service revenue increase driven by increasing data usage, bundling and an increasing customer base. This growth helped the division of Vodafone to offset a slowdown elsewhere, where regulatory issues in Tanzania, the DRC and Mozambique reduced growth to 3.5%.
Asia Palestine, Oman, Qatar, Maldives – A Messi competition Mobile, fixed, broadband internet and corporate managed services provider Ooredoo gave four customers the chance to meet footballer Lionel Messi in Barcelona through the company’s ‘Stand for Good’ CSR programme, which helps ‘empowering women, helping refugees and educating youths’. The winners, from Palestine, Oman, Qatar and the Maldives, were also invited to see Messi play at a match in Barcelona.’ North Korea – Glorious data for most glorious leader North Korean network operator Koryolink has announced new data-oriented price plans, according to NK News.
The five different rates have differing membership fees, monthly rates, data limits and additional fees, but all must be paid for in advance. Describing the deals, a pamphlet by the network reads: ‘The subscribers pay 2,850 North Korean Won as a flat quarter fee, and utilize information and telecommunication services by using the accumulated balance.’This works out at about 45p in GBP according to unofficial exchange rates.
Oceana New Zealand – Nokia doubles Spark capacity Nokia’s Optical Transport Network system has enabled New Zealand comms provider Spark to double its capacity using Nokia’s 1830 Photonic Service Switch. It is the first deployment of a system capable of achieving 200G per wavelength. Ray Owen, head of Oceania at Nokia, said: ‘By taking a flexible approach to this challenge with New Zealand’s first 200Gbps fibre link, together with Nokia, Spark is well-placed to meet continued demand growth while meeting existing user expectations.’
Europe Slovakia – EU Council lowers wholesale data roaming caps The European Council of Ministers has agreed data roaming caps of 10 euros per GB, which is to halve again in 2021. Countries that benefit from tourism, such as the UK, Italy, Greece and Spain, have lobbied for the cap to be higher in order to protect their revenues from roaming. A final agreement on roaming caps must be made by the 17 June deadline. Spain – ZTE & Telefonica complete Pre5G testing Chinese manufacturer ZTE and Spanish operator Telefonica have completed their first live mass in-put mass out-put (MIMO) Pre5G test. According to ZTE, the test results exceeded expectations, improving network capacity six-fold.
Telefónica Group CTO Enrique Blanco explained: ‘We believe Pre5G massive MIMO technology can solve the internet’s last-mile problem by improving internet access and therefore enhancing the user experience. Massive MIMO will be a fundamental technological enabler for future 5G networks.’ Austria – P3 testing reveals superior quality P3 Communications’ testing of Austria’s mobile operators has revealed scores far surpassing those of any UK network. In Austria – a three-play market – the lowest scoring operator (T-Mobile) still scored higher than the best scoring UK network (EE), with all three receiving the company’s ‘very good’ rating – in the UK three networks achieved ‘good’ and O2 achieved a ‘satisfactory’ rating. Across the border in Switzerland, operator Sunrise achieved the test’s first ever ‘outstanding’ rating.
North America AT&T to repay $88 million to customers American operator AT&T is to begin repaying 2.7 million customers for billed items such as ringtones, wallpapers and sms subscriptions that they hadn’t agreed to. The country’s regulator, the Federal Trade Commission, announced in 2014 that the operator would have to repay the $88 million owed, and it has taken the past two years to trace who is owed what. Identified customers will receive their refund within the next 75 days.
South America Argentina – Speed or coverage? OpenSignal’s latest Argentinian mobile operator report has concluded that while Personal Argentina (owned by Telecom Argentina) achieved the fastest 4G and 3G download speeds (16.1 Mbps and 3.2Mbps respectively), Movistar – which is owned by Telefonica – achieved the best 4G coverage (73.6%).
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2016 trends Looking back at the year’s major developments, and looking forward at what this means for the year ahead
Convergence everywhere Barely two weeks into 2016 we saw the biggest acquisition the industry has ever seen; the £11 billion BT/EE deal. Four months later, Three’s planned takeover of O2 was scuppered by the European Commission, Ofcom and the CMA, with the communications regulator’s CEO arguing that a three-player market would harm competition, increase prices, disrupt network development and harm the high street. Underlying both deals is the pressure to deliver more for less as network ARPU decreases. While BT aims to provide more services and thus buck the trend, Three’s merger would have reduced costs in a similar manner to Orange and T-Mobile’s merger, which identified £445m of synergies. However, it wasn’t just networks looking to take advantage of reducing operational costs and expanding services through buyouts. In the distribution and solutions space, Alternative Networks – which until it was hit by roaming caps, had been on an acquisition spree itself – was acquired by rivals Daisy in November. Exertis also grew through acquisition with its purchases of Siracom and Medium Ltd this year, while Westcoast bought ArtSystems and Adveo Digital Systems. Dealers also joined in, with Chess, Maintel, Onecom, GCI and Cellhire all buying up rivals in 2016.
industry, but whether through choice or coincidence, it’s hard to say the same of Ofcom in 2016. The quango hasn’t just dominated headlines but determined them, by slapping Vodafone with the industry’s biggest fine to date, changing its spectrum rules, taking a firm stance on mergers, breaking up BT and Openreach, preparing switching changes, and announcing a crowd-sourced coverage checker. However, in maintaining that four networks are needed to sustain competitiveness, its opponents believe responsibility for creating an equal playing field in spectrum now falls at its feet, threatening the darling political status it enjoys by bringing in billions for the Treasury through the associated auctions.
Field Marketing Growth Brexit There are known knowns and there are known unknowns, but there are also unknown unknowns. Depending on who you speak to, Brexit seems to be all three simultaneously. Most of the effects so far have been little more than market uncertainty – currency fluctuation causing price increases such as with the OnePlus 3’s £20 jump, Microsoft’s 22% cloud service price hike, and O2’s CEO Mark Evans telling Mobile that its planned IPO could be derailed by ‘market conditions’. There’s also talk of Brexit harming investment in the UK, though there’s little evidence of this so far with 0.9% investment growth from July to September and tech giants Huawei, Facebook and Google all reaffirming their investment plans.
Common criticisms of the UK’s regulator include that it is toothless or too hands-off with the
One of this year’s most dystopian tech images came from Samsung’s MWC event, with hundreds of attendees wearing their headsets while Mark Zuckerberg strolled past unnoticed. However, 2016 had the last laugh,
with VR being the one unnoticed by consumers, with Playstation VR shipping 1.85 million less units than expected while Google’s DayDream VR fell 200,000 short of its 450,000 target. Samsung is expected to ship 2.3 million units, although mostly by giving one away with every flagship device sold throughout the year. One area of success for VR is consumer awareness: Google and Facebook both added 360 video functionality in 2016 and 64% of the UK public had heard of VR devices.
Using field-marketing staff to train, incentivise and motivate retail staff on a manufacturer’s products has been widespread in the industry for years, and our research early in 2016 showed that Samsung held a leading position, followed by Microsoft and Sony. However, by June, Microsoft had axed its entire field marketing apparatus and Huawei and Alcatel were on the rise, having launched their own retail staff training schemes in March. In October, Doro expanded its existing field marketing team, with its UK MD Chris Millington explaining: ‘Our expanded team will help to facilitate the development of new market opportunities for the industry – and deliver these into trade and retail channels, through improved education and knowledge.’ The overall growth in the field marketing teams throughout 2016 represents continued manufacturer confidence in phone shops as their primary routes to market, despite the rise of online and catalogue retail sales channels.
New year, new budgets, new opportunities and new threats. Here’s what the UK mobile industry is expecting in the upcoming 12 months fibre networks improve along with usability of new technology for the customer.’
Flexible working The end of 2017 will also mark the deadline for all four operators to achieve 90% geographic coverage, as pledged to Ofcom in early 2015 in return for reduced licence agreements. This represents a major shift away from population coverage percentages, as noted by Rainbow Communication’s sales and marketing director Stuart Carson, who
Fibre boosts additional services November’s news of tax relief for fibre installers, and the separation of BT from Openreach, means that for many connectivity providers, broadband could become more competitive at wholesale price. As Excalibur CEO James Phipps predicts: ‘Openreach being potentially broken up will provide competitors with the opportunity to try to take advantage.’ Secondly, a faster rollout of fibre could allow unified comms providers to offer more services to more businesses. Onecom CEO Darren Ridge explains: ‘Currently only two per cent of UK addresses are connected to a full fibre line – but I expect that figure to be a lot higher by the end of the year, supported by the investment in broadband infrastructure announced in the government’s Autumn Statement and by innovative partnerships such as Onecom’s offering with CityFibre. ‘These superfast connections have transformational potential, allowing businesses to access ever-more powerful cloud services, which give them the ability to evolve as the technology does. This in turn will enable truly seamless remote working, driving efficiencies and bringing costs down.’ This expectation of fibre rollout as the backbone for new services was echoed by TWL Voice and Data’s head of business development and marketing Gemma Morris, who told Mobile: ‘Naturally we want to see www.mobiletoday.co.uk
told Mobile that a major 2017 trend would be: ‘The move from population coverage to geographical coverage reporting, which will hopefully let business people know better how likely they are to remain connected on the move. EE is leading the way.’ He continued by explaining that greater network reliability on the move would have ‘a positive effect on mobiles’ as it would lead to more ways of using their phone and data as a productivity tool while on the go. Verastar CEO Chris Earle agrees: ‘We expect to see an increase in the usage of data and greater take-up of mobile applications to allow small businesses to manage their business on the move.’ As with increased fibre coverage, increased mobile coverage and speeds will allow solutions specialists to provide more services to their customers, with Aerial Communications stating: ‘Data speeds will continue to increase and, as a result, cloud IT solutions will become increasingly popular, allowing for more collaborative and flexible working practices for businesses.’ Outlining the basis for the increase in demand for flexible working, Daisy’s SMB Services MD Dave McGinn says: ‘People want
to be better connected to not just their hardware, their systems and their tools, but their colleagues, their customers and their suppliers. ‘This enhanced sense of connectivity will allow businesses to take hold of industry developments that are set to not necessarily launch, but to surge in 2017. Mobility being an obvious one. ‘Generation X, Y and even millennia employees now demand the right to work more flexibly both in terms of timing and location. Work is becoming a thing they do and not a place they go. In turn, this opens up another opportunity and an emerging trend for 2017, with suppliers beginning to offer more and more Platform as a Service (PaaS) solutions, managing the infrastructure and protecting the environment.’ Elaborating on growth areas for dealers, Curran from Plan.com included a service intrinsically linked to flexible working, telling Mobile: ‘VoIP will become fundamental to businesses of all sizes – with the biggest uptake among SMEs. Traditional mobile partners who start selling and servicing this market will generate significant revenue growth and increase business stability.’ However, flexible working isn’t just providing opportunities for unified comms providers, it’s providing challenges as well. Darren Seward, head of Westcoast’s mobile division, suggests that ‘new EU regulations increasing corporate responsibility for data protection are relevant to mobile due to corporate data on mobile phones and device management.’
A digital future Describing 2017 as a year of political and commercial upheaval, Fonehouse CEO and owner Clive Bailey outlines the role of online:
‘The market and ways of selling will evolve even more than before, especially with social media and online plays. Selling will become more of an old-fashioned word as the drive for customer service and belonging to a marketing idea will be the Holy Grail… ‘Clearly integration of online and retail “clicks to bricks and bricks to clicks“ is now an essential ingredient, but it’s morphing in various ways with the massive increase of social media approval that can seriously challenge a company or its products – or indeed create a gold rush. ‘The larger retail monopolies will apply pressure on the smaller businesses and we may well see more casualties during the year, as surely consolidation is just another word for major corporates taking ownership of a shrinking market. However, there are – as always – ways around for the smaller players.’ Carphone Warehouse is also looking towards online in 2017, with online trading director Laura Harricks telling Mobile: ‘The mobile will become the dominant device to shop from in the coming year and will lead to an increase in the number of late night (midnight) shoppers via multiple screens.’ Harricks went on to explain how this changes how a retailer reaches its audience: ‘It’s increased personalisation ie. serviced bespoke offers as a result of device detection. We also expect inspiring content through online and social channels to become more important in attracting higher-end customers, while social sharing will become more influential when it comes to purchasing.’ Will this trend be limited to B2C? Not according to Plan.com co-founder Keith Curran, who explains: ‘Dealers who embrace digital change and use it to drive and grow their business will flourish, while those who resist the change will flounder.’
work harder than ever to retain their customer base.’ Vodafone UK CEO Nick Jeffery also sees customer service as a major focus in 2017, telling Mobile: ‘In 2017 we want to build on being the ‘UK’s winning network’ and be recognised for the improvements we have made to make our customer services best in class. We are making positive progress in customer services but fixing it is our highest priority for 2017. ‘ For Telefonica UK’s digital director David Plumb, the changing nature of mobile technology provides additional opportunities for the brand to connect with and better serve its customers: ‘It’s a mind-set change and evolution of the way we live and work to create greater value from the things we do. Whether that’s helping NHS trusts help patients, hospitals and clinicians manage and share information more effectively meaning vital seconds are saved, or allowing consumers to control their heating, lights, locks and more with their phone while they’re on the go, these things improve the way we live and work.’
Customer service The UK mobile consumer is more powerful than ever, and changes to what they expect from and how they manage their mobile tariffs will impact how operators communicate with them in 2017. Three’s director of customer strategy Danny Dixon explains: ‘Your existing customer base is the core of your business and the best ambassadors for your brand. If you look after them they will stay longer, spend more and become advocates by telling their friends about the great service that they get. The rise of SIM-only, where contracts last as little as 30 days, means that operators must
the launch of cable companies such as Comcast and Charter into the wireless space; both will look to leverage Wi-Fi assets and VoIP to deliver value.’ UK MVNA for Three’s network, x-Mobility, is also investing in using OTT tools to give MVNOs a greater range of freedom. Co-founder and CMO Shanks Kulam says:, ‘We believe the MVNO space will see more alternative offerings vs the vanilla models that dominate today. Examples include the FreedomPop Freemium type model, which leverages an app to significantly reduce the wholesale cost of the Voice/SMS as these go ‘over the top’. Other disruptive MVNO models are even SIM-free, such as Swytch.com and ONOFFapp.com, both of which offer subscribers additional mobile numbers on their existing device via a VirtualSIM/OTT app. Clearly, services will continue to migrate from the traditional GSM network to the 4G+ Data network (both OTT and VoLTE), with subscriber data usage continuing to grow based on current and next-generation applications.
MVNOs escape the squeeze As detailed in the MVNO stability investigation i(p9-11), the reluctance of some mobile operators to compete in the MVNO space can force players to focus on budget users. However, there’s growing evidence that MVNOs are looking to use new technologies to play a disruptive role in both airtime and data services. FreedomPop CEO and co-founder Stephen Stokols says: ‘in the US, a key industry trend of 2017 is likely to be
Consumer expectations of 4G are changing, with EE’s MD of channels and trading, Ettiene Brandt, telling Mobile: ‘4G has crossed over from a “nice to have” to being essential, and that’s because of changes to how people are using mobile networks. Smartphones are so powerful and versatile, people use them for everything, from creativity with videos and pictures, to relying on them for work and keeping in touch with loved ones. And the critical thing is that they want to do all of this everywhere they go – not just at home, work, or in major cities and towns. ‘By September 2017, we predict 95% of EE customers will have 4G devices, and by the end of 2017 we’ll cover more than 92% of the UK geography by 2020 – so the amount of data, and places people can access 4G, will grow immensely. ‘We also firmly believe that more transparency about network data will be a trend in 2017 – we’ve called on the industry
to provide consumers with clearer information on coverage, so customers can quickly and easily understand what kind of network experience they’ll have where.’ Vodafone UK’s CTO Jorge Fernandes also outlines its network strategy: ‘Our first and highest priority? Pushing ahead to complete ‘Project Beacon’ (the full upgrade of our network) by the end of the year. We want customers to continue to be confident in using our network wherever they go, to never experience call drops, and to have reliable data whenever they want to use it. The recent P3 results highlight that our hard work and massive investment over the past few years is paying off, but our aim for the programme is 98% coverage by the end of 2017. So our network footprint will continue to expand across rural areas whilst the use of innovative technology solutions, such as small cell technology or new spectrum, will increase coverage in urban area in order to meet customers’ increasing demand and a 5G future. We are well on the way.’ It’s not just Vodafone eyeing up the potential to add new spectrum either. When questioned about O2’s ability to compete at the auction, Telefonica UK CEO Mark Evans told Mobile: ‘Like every carrier we will turn up. and we will turn up at the upcoming spectrum auction, we’ll be well equipped and of course what we’ve said to the regulator is that if the regulator wants to ensure a four-player market – and they’ve made a very clear stated objective of that – then they need to set the rules for that auction and commence it with exactly that aim.’ While Three’s ‘Make the Air Fair’ campaign to get a 30% 4G spectrum cap will rumble on in 2017 until the auction, the operator is also expecting other methods of improving data consumption for customers, with Dixon predicting: ‘The industry will continue the trend of moving towards seamless connectivity and handover between cellular and WiFi networks. Customers just want a service that works wherever they are and allows them to connect to their friends and the wider world. WiFi is a complementary technology to cellular and seamless handoff between the two will become the norm.’ Ofcom also outlined their 2017 plans for working towards 100% geographic coverage, with CEO Sharon White telling the operators in a now-revealed letter: ‘We envisage a programme of work through to next summer to understand where the current investment programmes are likely to take us and identify the options for achieving varying levels of further coverage and quality of service. Along with the consideration of broader outdoor
coverage, I expect the work to focus on challenges such as indoor coverage, and coverage along transport corridors.’
Accessory trends led by devices The accessories market is looking towards handset trends in determining their own responses in 2017, with uncertainty caused by Brexit expected to have a knock-on effect. Dixons Carphone’s CFO Humphrey Singer predicts that manufacturers may increase prices in the first three months of 2017 as a response to currency fluctuations. However, case manufacturer Incipio’s EMEA MD Neil Edwards predicts that the impact of Brexit on consumer device purchasing habits could go either way, stating: ‘Accessories are dependent on hardware sales, and as we go into 2017 in the UK with the pound versus the dollar and nervousness about Brexit,
customers may aggressively purchase hardware before leaving or they may hold off and that would be naturally detrimental to accessories.’ Another trend led by device changes is the growth in wireless technologies according to audio accessory specialist Jabra, which is expecting the 3.5mm headphone jack to play a diminishing role in 2017. The company told Mobile: ‘If Samsung removed the jack as well, 75%+ of the mobile phones sold in the UK would have no 3.5mm jack any more. Wireless headsets allow people to buy only one device, which is what people want, rather than having to carry one headset in their laptop/tablet bag for work and another in their pocket for calls, music or exercise. The mobile industry and UC rollouts will accelerate with a higher demand for wireless and dual form factors (prosumer and office).’
Mobile – centre of the IOT universe Is IOT’s reign as the vaguest acronym in the industry, coming to an end? As consumer applications of IOT came on in leaps and
bounds in 2016, it was mobile that played the central role, a role many in the industry believe will continue. Head of Sony Mobile UK, Warren Saunders, offered: ‘The building blocks are also in place for a more convergent future, leveraging the advances in IoT and smart tech to enhance the overall mobile experience. However, we can’t escape noticing as an industry, across both operators and hardware/services companies we need to accept that we will have to do better in terms of delivering real, defined customer value if we are to take the next step change in mobile technology.’ For Plan.com’s co-founder Keith Curran, ‘IoT will continue to grow but predominantly in the Smart Home and retail space’. while Westcoast’s Darren Seward believes this will be ‘driven by wider adoption of voice assistants such as Alexa and Google Home’. The focus on connected tech continues over at Doro, where IOT may provide opportunities to combine their experience in mobile devices with their experience in connected care. UK MD Chris Millington explains: ‘IOT was the big thing at MWC three years ago, and I remember sitting there thinking: ‘it’s all a load of hot air really isn’t it?’ then all of a sudden Internet of Things is real. I think using IOT to predict trends and analyse them is going to have a big effect on wellbeing and providing families with the information to support their elder family members, it’s an area we’ll be looking to develop.’
The year of the camera? As OTT providers such as Facebook, Twitter and Youtube refine their streaming and 360 video services, manufacturers expect this to influence the role of mobile devices. Conor Pierce, Samsung vice president of IT & Mobile, United Kingdom & Ireland explains: ‘The trend for capturing and sharing moments has also continued to surge in 2016, driven by continued improvements to social sharing platforms and greater collaboration between these platforms and the technology we use. We expect to see this trend for sharing grow still further as we head into 2017, with video playing an
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increasing role thanks to advancements in mobile technology and the growth of social sharing apps such as SnapChat. The popularity of live 360 content, enabled by platforms such as Facebook and YouTube, will boom, revolutionising the way in which we share these stories with others, as more of us seek to capture and share moments as they happen.’ Huawei also believes device cameras are to play an ever-more important role, aided by their position as the average consumer’s primary photography device. Huawei UK Consumer Business Group MD James Jie says: ‘We firmly believe people are becoming more demanding on camera quality; it’s the only camera people carry around now and this has an impact on people’s expectations on battery life.’
360 content will become the norm, he also believes there’s a crucial industry effort needed in order to get consumers creating 360 content. ‘Just as taking photos from your smartphone was introduced and usage eventually skyrocketed, we see the same trajectory happening for 360º. However, there will need to be significant consumer education around this new technology, and helping consumers understand this is the new video standard.’ Data Select CEO Fergal Donovan believes this growth will come partly from widening price points, telling Mobile: ‘In terms of technology, we expect to see the further growth of technologies such as VR, AR and 360-degree video. These technologies will start to appear further down the price segments, opening up the benefits to a wider audience.’
Manufacturer fighting talk
The role of VR and 360 360 content of course requires a 360 device as well, and this is also a key for Samsung, with Pierce outlining its projected VR growth: ‘In the past year, virtual reality has continued to go from strength to strength. and we anticipate that the trend of escaping reality to virtually experience new things and places is set to take VR into the mainstream in 2017 and beyond. New research by Samsung and analyst house CCS Insight predicts shipments of VR devices are set to soar 390% by 2020, and we expect that mixed reality experiences, combining virtual reality technology (eg. Samsung Gear VR headsets) and augmented reality (such as Pokémon GO), will take us to new levels of experiences in entertainment, travel and sport, which will also be driven by the growing availability of VR and 360-degree content. In particular, the UK market is set to grow rapidly, from 0.78 million shipments of virtual reality devices in 2016 to 3.84 million in four years, making the UK the fastest growth market in Europe.’ While 360 camera manufacturer Allie Camera’s president Dmitry Kozko predicts 18
Samsung and Apple continued to hold the lion’s share of the UK market, despite some gains by Alcatel and Huawei. However, industry insiders are predicting a more competitive 2017. Data Select’s CEO Fergal Donovan told Mobile: ‘We look forward to a new year that will not only see the rebirth of household brands such as Nokia and Blackberry, but also the further introduction of devices from exciting vendors such as HTC, Bullitt, Alcatel, Motorola and Sony. A special mention also for Google which we expect to have a strong year with the Pixel and Home portfolios in 2017.’ Westcoast’s head of mobile Darren Seward also expects newer players to make gains, stating: ‘I expect challenger brands such as Huawei to be gaining more traction in the UK market. I also expect the growth of Google own-branded phones.’ The manufacturers also outlined their ambitions for the following year. Warren Saunders from Sony tells Mobile: ‘2017 is the year Sony reclaims its position as the technology pioneer to watch. It will be the year everything gets smarter – from mobiles to appliances to the way we communicate with consumers.’ Huawei’s VP of European media affairs, Adam Mynott, also told Mobile in November: ‘We’re a long way behind Samsung and Apple but we certainly have ambitions to compete these brands and to overtake them in the medium term.’ On the brand’s battle for consumer awareness he added: ‘We’ve had a very good performance thus far in the consumer division in the UK so we are confident we are heading in the right direction.’
Contributors • Aerial Communications • Allie Camera president – Dmitry Kozko • Carphone Warehouse online trading director – Laura Harricks • Daisy Distribution SMB services MD – Dave McGinn • Data Select CEO – Fergal Donovan • Doro UK MD – Chris Millington • EE channel and trading MD – Ettiene Brandt • Excalibur CEO – James Phipps • Fonehouse chairman – Clive Bailey • FreedomPop co-founder & CEO – Stephen Stokols • Huawei UK consumer business group MD – James Jie • Huawei VP of European media affairs – Adam Mynott • Incipio EMEA MD – Neil Edwards • Jabra • Ofcom CEO – Sharon White • Onecom CEO – Darren Ridge • Plan.com co-founder – Keith Curran • Rainbow Communications sales and marketing director – Stuart Carson • Samsung IT & mobile VP – Conor Pierce • Sony Mobile head – Warren Saunders • Telefonica UK CEO – Mark Evans • Telefonica UK digital director – David Plumb • Three director of customer strategy – Danny Dixon • TWL Voice and Data head of BD and marketing – Gemma Morris • Verastar CEO – Chris Earle • Vodafone UK CEO – Nick Jeffery • Vodafone UK CTO – Jorge Fernandes • Westcoast head of mobile – Darren Seward • x-Mobility co-founder & CMO – Shanks Kulam
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Launching an MVNO Sky’s director of converged products discusses Sky Mobile’s development, USPs and why they’re not just another quad-play service
Sky’s arrival into the mobile market has been long awaited and, having previously denied plans to enter the mobile space, the company signed a deal with Telefonica UK in January 2015. This led to industry rumours of a launch in spring of this year – rumours only dashed when the period passed with little development. As Sky readied its mobile offering, rival broadband and TV provider Plusnet launched its own, while another rival, Virgin Media, further developed its mobile services with the launch of 4G. Describing the timing of Sky Mobile’s launch, Vince Russell told Mobile: ‘The reason we’re entering the mobile market now is not about what anybody else is doing, it’s about the market conditions being right for Sky to enter now. Data is the thing that people value now and we are someone people trust to bring them data both as a broadband provider and as a content provider. People are increasingly buying SIM only and that’s playing to our strengths as well.’ Pointing towards its 50,000 pre-subscribers as evidence that its later arrival hasn’t affected the brand’s ability to compete in the mobile space, Russell said: ‘People already see Sky as a mobile 20
brand – when you think about Sky Go, Sky Sports and Sky Wi-Fi, people are already interacting with Sky as a mobile company.’
Data flexibility Sky’s strength in content and data services continues into its new mobile arm, choosing flexibility in data usage and benefits for Sky TV customers as hooks to win over both existing sky customers and those with no previous history with the brand. While some rival MVNOs such as ID, GiffGaff and Virgin Media offer short-term data rollover functionality, Sky Mobile is the first to roll over data for up to three years. Explaining why this service was offered, Russell says: ‘People are really worried about having enough data or going past their limit where they get hit by these
penal charges. So people are buying these big data plans and it turns out they don’t really need them; we’ve discovered that 50% of the data people are buying goes unused. That’s about two billion pounds of wasted money per year in the UK.’ This data flexibility also included the ability for customers to upgrade or downgrade their contract at any point, despite all Sky contracts being a fixed 12 months.
A standalone service Other companies providing all four home connectivity services (fixed line, mobile, broadband and TV) have previously leveraged the power of providing all four to offer a ‘bigger the bundle, better the deal’ approach. However, the converged products
We’ve discovered that 50% of the data people are buying goes unused. That’s about two billion pounds of wasted money per year in the UK
director believes Sky’s new Mobile proposition is different: ‘Sky does sell all four services – which you’d traditionally call a quad-play service – but I think it is important to note that it’s created to be a great value service in its own right. ‘We’ve approached this as how do we make a great mobile service; we’ve got features like the unlimited calls and texts and Sync that make it better for Sky TV customers, but really it’s the value of the plans we’re offering that will allow us to sell to more people’
Is O2 up to the job? Responding immediately to the Sky Mobile launch, EE’s press office sent out information detailing O2’s poor performance in streaming reliability and network speed, telling recipients: ‘Sky Mobile customers clearly won’t be getting the best experience, and O2 customers will likely see their service slow down even more as Sky customers use O2’s network.’ When questioned on why O2 were chosen as Sky’s network partner, Vince Russell told Mobile: ‘When we were looking for a partner for the service we went to all the operators and ran a reverse www.mobiletoday.co.uk
Apple and Samsung meet the needs of the majority of our customers initially
auction: there was a bunch of considerations such as the quality of the network, the price, the service and their willingness to give us what we need to innovate with our roll, mix and sync features. That’s why we picked Telefonica, it has a great network, it got great customer satisfaction and it’s the only one committed to rolling out 98% 4G coverage by next year, so the commitment is there.’ He later added: ‘The point to note over time is the way we’ve built our very deep MVNO – we could move network at any time in the future with no disruption to our customers. We own the full customer experience, all the way through to the SIM.’
Though starting as a SIM-only
proposition, Sky Mobile plans to offer devices from spring 2017 onwards, announcing its two planned suppliers – Apple and Samsung. Asked about additional manufacturers, Russell answered: ‘The handset market is quite dynamic, we have the flexibility to get the handsets we need if something becomes a must-have device, but I think we’re very happy that Apple and Samsung meet the needs of the majority of our customers initially.’ When asked whether additional services such as insurance and accessories would be part of a future expanded offering, he continued: ‘I think what we’re doing today is the first step, we’ve got a long list of things we want to bring to customers, we just need to make sure at every step of the way customers get the great
services they expect. In time, we’ll be bringing additional services to our mobile customers but we won’t have insurance
at launch.’ Though unable to provide targets for Sky’s Mobile in 2016, Russell compared the launch to the birth of the company’s broadband offering: ‘We’re not going to talk about any targets specifically – needless to say we always set ourselves very challenging targets, I was involved when we launched broadband 10 years ago, now we’re very closely second-largest ISP in the UK with the highest scores for customer satisfaction. so we don’t enter into this lightly either.’
www.mobiletoday.co.uk December 2016
10 reasons to target recycling
reduce their environmental impact – recycling, refurbishing and reselling is one of the quickest and most cost-effective means of doing so.
Why device recycling and trade-in revenue is ready for the taking
Reducing price panic One of the biggest barriers to a sale for retail staff can be the price of a desired device and/or contract. By offering a recycling service, staff can help to overcome what may otherwise end a customer interaction. O2’s head of franchise and store operations, Martin Jordan, explains that its recycling service ‘helps from a commercial standpoint as it helps to offset upfront costs of a tariff or handset and customers can buy accessories. They can also recycle for data.’
Increasing footfall A report on mobile device trade-ins by Connected World Services suggests that providing a trade-in scheme for customers increases in-store footfall and brings in new customer segments who wouldn’t otherwise visit. The value in this is the potential to drive a rivals’ customers into store, providing the opportunities to engage and sell to consumers outside of the existing base.
WEEE compliance Most companies have an environmental policy and all must adhere to the government’s Waste Electrical and Electronic Equipment regulations (2013). These EU-driven regulations are fast changing, with an update coming into force in 2019. Advising and helping SME clients to comply with these improves both relationships and ARPU. As Bamboo Distribution described recently: ‘By recycling handsets deemed as waste, organisations can reduce their carbon footprint and put themselves in a much better position to achieve key performance indicators related to energy efficiency and performance.’ December 2016
Data safety A Channel 4 news investigation in 2014 found that CEX and Cash Converters were failing to completely wipe previous user data from devices. For businesses looking to trade in devices, this could cause security and data protection issues. Describing its role in helping businesses to solve these issues, IT Reverse said in a statement: ‘In line with strict government legislation, top corporate firms are increasingly relying upon ICT Reverse for the safe removal and management of all data-bearing assets (including PCs, laptops and mobile phones).’
Ethics A report this year by Greenpeace East Asia placed the blame for the three million metric tonnes of small electronic device waste per year squarely at the feet of manufacturers for ‘releasing too many new models’, but what about the retailers who sell them? The industry’s top five high street retailers have all pledged to
Increasing product lifecycles, both through customers switching to SIM-only after 24 months and through hand-me-down handsets, denies retailers the chance to sell both devices and airtime. By retaining brand ownership of an existing customer’s recycling, a retailer gets two opportunities they would otherwise miss. The first when the customer trades up their handset with their existing provider rather than elsewhere, and the second is to sell airtime with the next buyer of the traded-in device.
8. repair services
When Carphone Warehouse announced its goal of generating £1 billion of business from tech services in July of this year, part of this was an expansion of the company’s in-store repairs program. Coupled with the ability to trade in broken devices at the point of repair, the company can maximise its conversion of those customers coming in with broken handsets.
High Margin The average used handset price in the UK increased from around £23 in 2007 to around £130 in 2013 according to Deloitte, which made mobile recycling growth a key prediction for 2016. A refurbished Samsung Galaxy S6 edge is sold by envirophone for £319.99 while the same devices are bought by the brand for £200. Redeem CEO Paul Addams comments: ‘Mobile network operators and other international companies are investing heavily in device recommerce, confirming that this is an innovative and fast-growth sector where there is the opportunity to expand the market.’
All to play for The UK has one of the highest mobile device recycling rates in the world at 35-45% according to Redeem CCO Mark Roberts. But still, with an average upgrade cycle of 23 months and 71% of adults in the UK having a smartphone, that’s more than 20 million redundant devices each year that aren’t being re-sold, putting a conservative estimate of the untapped market at £2.6 billion.
Keeping up with the
Failure to provide a recycling service, whether to business or consumer users means customers will be forced to go elsewhere for this service. This hands customer interaction opportunities over to rivals, potentially increasing customer churn and making customers less likely to consider a brand for additional services in the future. www.mobiletoday.co.uk
SAVE THE DATE Mobile Global
1ST JUNE 2017
For information on how to enter or to Book your table please contact : Mark.email@example.com
To view winners & photos from 2016â€™s awards www.mobiletoday.co.uk December 2016 www.mobiletoday.co.uk/awards
O2 Manchester’s tight-knit team Staff in O2’s Manchester Market Street gave a hand to local homelessness charity Coffee4Craig by joining in with its knitting campaign making scarfs to raise funds for the organisation. The charity runs street kitchens and services for rough sleepers in the city. Customers also joined in, all helping Coffee4Craig to continue its vital work.
Coffee break voucher winners Congratulations to this month’s coffee voucher winners! Each was nominated by a colleague for their hard work in-store this month. Rhys Benhadj nominated Shay, stating: ‘He works seven days a week here at Carphone Warehouse; it would be great to pop into the Starbucks up the road and pick up a coffee for the whole team!’ Ryan Solly nominated Ryan Wickenden, saying,: ‘He has been an inspiration over the past few months, really working tirelessly to support the store when it has been on its knees. He will always come in at the last minute to support when there are staff shortages, always going that extra mile for customers to make sure they are always happy.’
WIN your team a coffee break! iSELLMOBILE knows that some days you just need a boost of caffeine to stay on your toes! We’ve got five £10 Starbucks vouchers to give away so you can keep yourself and a few colleagues in the game on those days when you really need it. TO ENTER: pick out a member of your team and drop us a message telling us why your colleague deserves a coffee break! email firstname.lastname@example.org with the subject ‘coffee break’ to enter.
Craig Peterson nominated Glasgow Forge, stating: ‘We were 300% up on last year’s Black Friday and 200% on the week. The team worked so hard over that week and sacrificed breaks for customers – never once complaining – and we were living off the coffee in store! To treat them with Starbucks would be incredible.’ www.mobiletoday.co.uk
Contact Centre Champion Daniel Hulse Tesco Mobile Runcorn’s top performing sales and customer service representative impressed the judges through his incredible customer feedback and staff support, making Dan the firstever winner of this all-new iSellMobile Award category When did you find out you’d been nominated for Contact Centre Champion? My manager nominated me from the team, because I helped out a lot, and performance and conversion had been really high. He told me he had put me forward, but I wouldn’t have thought I would win. How did it feel to read all the supporting statements your colleagues left for you? Really nice. Obviously, I have been at the job for a year and colleagues have been here for a longer time – and to hear their feedback was obviously great. To know I am noticed and appreciated is really nice. I couldn’t believe I made the finals due to their support. And votes. How did you find the iSellMobile Awards? It was a brilliant night. Having been in the industry for only a year I’ve never been to anything like this, I never knew anything like this existed for us. With my category, I thought if anybody from Tesco Mobile was going to win it would have been my colleague, so when I was called up on stage as a winner it was a total shock – I didn’t know what to say, a total surprise. My family were in touch all night as well. www.mobiletoday.co.uk
What’s your proudest achievement in customer service? There was this one customer who had rung and spoke to us a few times trying to order a phone for her daughter’s birthday and to complete her order she needed to sign a credit agreement to release the phone into dispatch. She was having difficulty in signing the email; she was extremely distressed as she had spent a couple of days ringing and speaking to others and felt like she wasn’t really getting anywhere. Because of the issues with the order she was cutting it fine for her daughter’s birthday against our delivery timescales. While every call we do not sell on impacts our targets, I find it
important to remind myself on every call that the customer’s experience needs to still come before that conversion. I wasn’t able to guarantee her a delivery timescale that would be in time for her daughter’s birthday so offered to ring round her local stores to find the phone. After trying four different phone shops to locate the phone in the colour she needed, I found one and asked them to put it on hold. The customer was extremely grateful for my efforts to ensure her daughter’s birthday wasn’t ruined and later on that evening I even gave her a courtesy call to check that the process in store had gone well and she had the phone in hand. After that she took to Facebook and posted about the service she had
received and how she was ringing her own network to see when she could leave her current contract to come join Tesco Mobile. So whilst I didn’t get my sales conversion on that call – I feel I took a step beyond my current role to ensure the customer did still choose Tesco Mobile and also would want to recommend us for our service to her friends and family. Your nominator said you often help to coach other members of staff. What would you say your key tips for helping staff to improve service and sales are? I think it’s just remembering that no matter what you do, some people don’t want to buy a phone. When you’ve had a couple of these it’s easy to let your head go down. My key tip is just to always keep your head up. There’s always a chance you will get no sales five calls in a row and they need to stay positive. People buy from positive people, even when things are not going your way. After your Contact Centre Champion success do you have any other goals you’re working towards? Honestly, with being recognised, I’m now just focused on keeping on getting these sales levels I am aiming for. December 2016
Store Manager of the Year 2016 Wesley Fletcher Carphone Warehouse Maidstone became the first store to ever ‘do the double’ by winning both Store Manager of the Year and Team of the Year at the same event. iSellMobile spoke to the winning manager to find out more
PROFILE Years worked at Carphone Warehouse: 13 First store: Chatham First phone sold: Nokia 7650 Titles: Chairman’s Shield runner-up 2015, Chairman’s Shield winner 2016, Store Manager of the Year 2016, Team of the Year 2016. How did your team react to your win and to them winning Team of the Year as well? They went crazy, there was a lot of my boss’s bosses there hoping for Carphone to win some titles, so when we did the double it was amazing. Having the team with me on the night was brilliant; they loved it. The whole team is buzzing, we feel unstoppable, really relentless in our approach. They always say to me, ‘what’s next?’ When they went back to the store the next day they couldn’t stop talking about it. How was Black Friday? Yeah, quite good. I think we had 30% more offers online this year so that really drove online traffic on the Thursday. Do you think maybe it’s more of an online thing now? Not really, no. We still get a huge amount of footfall. Also, we get a lot of traffic from the Currys PC 26
World Pick Up Points because of Cyber Monday. In this way the online browsing and buying drives footfall in store as well. You’ve had an NPS above 90% every month for the past two years. How do you ensure NPS scores remain high on days such as Black Friday when perhaps you have less time per customer? We always have a CJL [Customer Journey Liaison] which will be me, Ollie or Luke. We welcome every customer when they come into the store, and look after them as they go round the shop. We also have a luxury coffee machine and a sofa and chairs in the middle of the shop. It’s a great atmosphere now, very well suited to going through the Pin-Point journey with them in a comfy environment. Coupled with a ticketing system, it helps to prevent queues and allows customers to browse as they like without losing their place. We’re one of the only stores that does this, but the CJL is the crucial part in managing it. Tell us about your team My assistant store manager Luke was here as a consultant when I first joined the store. Straight away I saw that he was essentially doing an assistant manager’s (ASM) role
but without the benefits, so I showed him all the back of house stuff and he came along in leaps and bounds, now he’s a strong ASM and he really drives the momentum in store. I’ve got another ASM – Ollie – who’s fantastic as well and one of my guys who was once an ASM in store is now a general manager in another store, I think it’s important to encourage progression. What systems do you use to promote personal development? So each ASM and myself will have someone under their wing; a ‘next-stepper’. We look at what people want to achieve and work out how to work towards it. When we have a team brief, everybody contributes – we work together to make the store succeed because it’s not just knowing targets, it’s knowing why and making sure everyone understands the entire eco-system. We also have customer assistant specialists in areas such as insurance and accessories. They share best practice and update all the latest information in each category, presenting to the rest of the staff on how their specific area is going. When did you first find out that Luke had put you forward for Store Manager of the Year?
When we went for Team of the Year he sent me a message saying he’d nominated me. I went online and saw all the supporting comments and I was blown away. I didn’t realize how much people looked to me for support and guidance, it was very humbling. From there you were shortlisted and invited in to be interviewed – what were the other finalists like? I met David Rafferty, the store manager of Glasgow Braehead who I was up against for last year’s Chairman’s Shield. Everything he seemed to get, I seemed to get runner-up for, so this year I was really gunning for it. The calibre in the room was very high. I met some great managers from Carphone Warehouse, Tesco Mobile, Vodafone, EE and Three. They were fantastic at what they do and were really committed to doing well for their stores and their teams. What are the general trends you’ve seen in 2016? We know now that there’s two things a customer thinks of when they come in. ‘Is it the right deal for me?’ and ‘can I get it cheaper elsewhere?’. That’s where the market is at the moment; it’s all about value. www.mobiletoday.co.uk
Battle of the bundle As stores expand their range to include broadband, TV and a broader selection of accessories such as wireless headphones and portable hotspots, the pressure is on for staff to work out the best bundle for each customer. When done well, bundling makes a customer feel they’ve got an incredible deal and also establishes your store as the place to go for the everexpanding selection of phonerelated devices, from cases to VR to connected home equipment. We gave our members a scenario and asked them to come up with their best bundle. Here’s a couple of our favourite answers below:
Scenario List the best value-for-money bundle you can make for up to £30 per month and £20 upfront. It must include one device plus as many of the below as possible: • Insurance • Phone cases • Tablets • Headphones • Broadband • VR • Wearables • Additional handsets • Speakers • TV package Jason Seal – EE, Boston Huawei MediaPad T1 + Mobile WiFi + Car WiFi +Skull Candy wireless headphones + 2GB data = £29.70 per month (no upfront) The verdict: A good entry-level tablet coupled with everything you’d need to make the most of EE’s top-scoring data network on the go. It’s also suitable for a good range of customers, with a pair of plain-coloured Skull Candy headphones, it could be a good mobile working solution for a business user. on the other hand, with the more traditional bold Skull Candy
designs, it’s perfect for keeping kids quiet on the school run. Conor Shaw – Vodafone, Malborough Vodafone Smart Ultra 7 + Vodafone Smart Ultra 7 case w+ Vodafone Tab Speed 6 + 2GB Plan = £26 per month + £15 upfront The verdict: It may take some persuading to get a customer to go in for this head-to-toe Vodafone tech package, but they’ll be glad you did. The Smart Ultra 7 received great reviews and the case is quite essential for that big 5.5in screen. The added tablet is the icing on the cake, especially considering it is one of the few value tablets with 4G capabilities.
iSellMobile’s top pick From Carphone Warehouse: Samsung Galaxy A3 + free Beats by Dr Dre EP + free Goji VR Headset + 3GB data on Vodafone + Samsung Galaxy A3 Essential Bundle (screen protector + car charger + phone case) = £25 per month + £19.99 upfront Our verdict: We think this is the most you can possibly get for your cash, with Carphone Warehouse giving away a free VR device with every Android handset. We even considered dropping the phone down to a J3 with less data in order to fit in a Galaxy Tab A and another J3 for £30 a month, but concluded that a user would probably get a more enjoyable experience from the headphones and the VR headset if they had the tech and data to make the most of it.
Got a better bundle? surveymonkey.co.uk/r/Bundleking