European shared data plan adoption on the rise, but incremental value at risk

2016 saw the adoption of shared data plans take off in several European markets. However, the approach taken by operators in Europe differs significantly to their US counterparts. The US has been one of the leading markets in terms of shared data plan adoption, and data from AT&T shows the additional value that can be driven from this; it has been successfully migrating its Mobile Share customer base to higher-value data packages. But in Europe, operators are largely offering data sharing as part of fixed-mobile convergent bundles rather than as a standalone product. In doing so, the potential incremental value of shared data plans is eroded.

Shared data plans beginning to see traction in some European markets

Shared data plans have been prevalent for some time in the US, and remain popular. AT&T for example records an average of three devices per account on its Mobile Share plans, and has seen migration of its Mobile Share subscriber base to plans with higher data allowances: the number of AT&T Mobile Share accounts on a 15 GB or higher data plan tripled between Q3 2014 and Q3 2015 and now represents nearly 40% of its customer base.

While shared data plans have been available in many European markets for a number of years, uptake has lagged behind markets such as the US. Our research shows that European operators have until recently not promoted shared data plans strongly enough to encourage mass uptake. However, GSMA Intelligence’s annual Consumer Survey shows that some European markets are beginning to close that gap.

According to the survey data, the adoption rates of shared data plans in Portugal and Spain were 28% and 27% respectively in 2016, up 17 and 15 percentage points on 2015. This growth marks a significant jump in uptake, and is notably higher than the regional growth of 6 percentage points.

Figure 1: Adoption rate of shared data plans
Source: GSMA Intelligence

Convergent bundles drive down the value of shared data plans to operators

European operators are taking a different approach to the US. In the two European markets where growth has been strongest, the growth in the adoption of shared data has been a by-product of the growth in convergent bundles, rather than by design as a standalone product. Operators in Portugal and Spain typically include additional lines, or allow subscribers to add extra lines, in convergent bundles. For example, subscribers to NOS Portugal’s NOS 4 package (a bundle of TV, internet, fixed line and mobile) can add an extra SIM to the package, allowing mobile data to be shared between SIMs.

NOS Portugal recorded 1.26 million SIMs in convergent bundles in the first half of 2016, up from 0.94 million in the first half of 2015, with an average of two SIMs per account. Other shared data offers, such as Vodafone Spain’s ‘Data Lines’, allow subscribers to add extra SIMs to their existing contracts, so subscribers can share their main data allowance across devices.

In other European markets such as Germany, France and the UK, shared data plans are not heavily promoted nor bundled in with existing offers. By not promoting standalone shared data plans at a price point to stimulate mass-market uptake, operators in Europe run the risk of following Portugal and Spain rather than the US; competition could lead them to offer data sharing as part of existing bundles, weakening the potential incremental value of shared data plans.