UPDATE: U.K. Mobile Subscribers Surge in Q4

All four mobile network providers in the U.K. saw their number of subscribers skyrocket in 1999, almost doubling the number of mobile phone users in the country, the companies announced yesterday.

The strong growth was not unexpected, with mobile phones being one of the most popular Christmas gifts in the country. About 4.4 million phones were sold in the fourth quarter of 1999 alone.

"I was expecting around 3.8 to 4.2 million handsets to be sold (in the quarter) and I was being optimistic," Tim Sheedy, a London-based analyst for International Data Corp. (IDC) said today. "But by November I said 'this is going to be the biggest quarter we've ever seen'," he added.

In early December, the Office of Telecommunications (Oftel), the U.K. government's telecommunications regulator, predicted a total of 4 million handsets would be sold in the month of December alone, most of them prepaid.

Prepaid phones allow users to buy a phone with calling time already included.

[See "U.K. Mobile Phone Operators Brace for Xmas Rush," Dec. 3.]Orange PLC added 2.73 million new customers in 1999, more than doubling its customer base. In the final three months of the year, more than 1.4 million customers signed up with Orange, bringing the total number of users on its network to 4.9 million. The company gained 856,000 users during December alone.

[See "Orange Adds 1.4M Mobile Customers in Q4," Jan 5, 1999.]BT Cellnet, the mobile branch of British Telecommunications PLC, added 2.9 million customers in 1999, with more than 1 million customers joining in the fourth quarter. The company now has almost 7 million mobile users.

One 2 One Personal Communications Ltd., which was purchased by Deutsche Telekom in October, had nearly 4.2 million users at the end of 1999, compared to 1.9 million at the end of the previous year. 903,000 subscribers joined in the fourth quarter alone.

Vodafone AirTouch PLC had 7.9 million subscribers in the U.K., with almost 1.1 million phones being sold in the fourth quarter of the year.

All four mobile providers were helped out by the attractiveness of prepaid mobile phones. When the time runs low on these phones, users can buy cards giving them additional time from shops throughout the country. Orange added almost 2 million prepaid users in 1999, while BT Cellnet added more than 3 million prepaid users in the same period.

"Prepaid will keep up the drive, but I think we're going to see companies, Orange in particular, try to convert a lot of their prepaid customers to contracts," Sheedy said.

In the long run however, a major deciding factor is going to be the availability and pricing of WAP (wireless application protocol) phones.

Companies will begin pushing their WAP phones this quarter and by the end of the year 50 percent of new phones on the market will be WAP-enabled, according to Sheedy.

"There's going to have to be a prepaid WAP market as well, because the features are aimed mainly towards young people who are buying prepaid phones now," Sheedy said.

Vodafone, which only released figures for the quarter, sold more than 1 million prepaid phones, while One 2 One said it added nearly 1.4 million prepaid customers in 1999 to the 650,000 it had at the end of the previous year.

Sheedy was hesitant to speculate whether he expected another record quarter at the end of 2000. "I think it's too early to say, but this year we're going to see some changes in the market," he said. "Nokia will be giving a strong push for the upgrade of handsets. They want to get their WAP phones on the market," he added.

Orange, in London, can be contacted at +44-1246-454-339, or at http://uk.orange.net. One 2 One, in Borehamwood, can be reached at +44 208 214 3601 or on the Web at http://www.one2one.co.uk. Vodafone AirTouch, in Newbury, can be reached at +44 7000 500 100, or on the Web at http://www.vodafone.co.uk.

BT Cellnet, in Leeds, is at +44-990-214-000, or at http://www.btcellnet.co.uk.