Belgium is the latest market to demonstrate that in stark contrast to other sectors like energy, telecoms pricing has not increased and in many cases has fallen
The Belgian Institute for Postal Services and Telecommunications (BIPT) is the latest regulator to produce a report showing that consumers in the telecom sector have benefitted from lower pricing over the past five years despite inflation-driven price rises in most countries last year.
The telecoms sector is now one of the few sectors that can clearly demonstrate favourable market conditions for consumers, in contrast to energy, food and transportation to name a few. This comes at a time when the ROCE (return on capital employed) of ETNO members has almost halved in the recent past: in 2017 ROCE was 9.1%, while in 2022 it was 5.8%, signalling that it is increasingly difficult for European telcos to generate adequate returns on their investment.
The BIPT examined the price evolution of mobile subscriptions between January 2019 and January 2024 on the basis of ten consumer profiles differentiated in terms of their mobile data needs.
From 2021 to 2024, the price of the cheapest subscription for consumers with data needs of 1, 2 or 5GB remained stable at €15 per month. For users with data needs of at least 10GB per month, cheaper subscriptions will be available in 2024 than in 2019. For 10GB per month, consumers had to pay at least €27 five years ago, while the cheapest subscription for this cost only €15 euro in January 2024.
The minimum price for a subscription with at least 20GB per month has dropped significantly from €39 in 2019 to €15 in 2024. For a 100GB data requirement, the minimum price fell from €50 per month in 2021 to €39 in 2024.
Similar story in the UK
In January UK regulator Ofcom pointed out that inflation-plus price formulas led to some customers experiencing large price rises in 2023. However, it added that average broadband and mobile prices have fallen in real terms in the last five years. Ultrafast promoted prices reduced by 15% and superfast list prices reduced by 13%. Average list and promoted prices for standard broadband dual-play bundles decreased by 5% and 9% respectively.
The average monthly price of mobile phone services, excluding handset costs, fell by 33% in real terms the five years to 2023, despite average data use having increased by 249% over this period.
Belgium’s increasing competition
BIPT found that virtually all brands offer subscriptions with significantly more mobile data than five years ago. However, prices still vary considerably from brand to brand, with a clear gap between secondary and premium brands.
In 2021, subscriptions for consumers with very high data requirements (from 100GB) have appeared on the market, with prices falling in recent years. For data requirements of around 10GB and 200 GB, the minimum amount has fallen from €50 per month in 2021 to €39 and €47 respectively in 2024. However, the choice remains due to the limited number of brands offering such data volumes.
Secondary brands – the low-cost brands launched by the larger telcos – are not present in this segment. In January 2024, consumers needing at least 200GB could choose between only two brands.
Digi arrival is anticipated
The major operators have already anticipated the arrival of the fourth network operator Digi by launching secondary brands such as Scarlet, Mobile Vikings and hey! Although price indexations are still happening, they are often part of a “more for more” strategy, with an increase in data volumes.
Despite the favourable evolution for Belgian consumers, BIPT concludes there is still room for improvement. The regulator’s international price study in December 2023 showed that Belgium is still significantly more expensive than its neighbours in terms of both limited (up to 10GB) and very high data packages (from 100GB).