The UK ranks 33rd out of 34 countries for overall telecom sector health, according to Kearney’s inaugural Global Telecom Health Index which finds that markets with fewer mobile operators often deliver stronger investment outcomes, better networks and healthier long-term sector performance.

The Index benchmarks 34 countries worldwide using 20 indicators across financial performance, commercial strength, network quality, market structure, and customer satisfaction. As the UK telecom sector enters a new phase following market consolidation, the Index suggests these changes could strengthen investment, improve networks and build a healthier sector, provided they are supported by the right market conditions.

The clearest finding from the research is the relationship between market concentration and telecom sector health. Of the 34 countries analysed, the 24 markets with three mobile operators or fewer consistently score higher than across every dimension of the Index except customer sentiment, which is equal in both groups.

The same relationship is evident in fixed broadband. More concentrated markets achieve higher fibre coverage (81 per cent versus 68 per cent) and fibre take-up (58 per cent versus 43 per cent). Crucially, greater market concentration does not come at the expense of customers. Customer satisfaction is at a similar level in three-player mobile markets as it is in those with four operators, showing that, when combined with stronger investment and better infrastructure, more concentrated markets can go hand in hand with positive customer outcomes.

The UK is one of the world’s largest telecom markets, but its performance across the Index remains weak. It ranks 28th out of 34 for customer sentiment and sits in the bottom half for both technology deployment and commercial ability.

The report highlights an opportunity to improve how customers perceive value, pointing to mid-contract price rises that aren’t matched by visible enhancement in the service offering as one factor behind weaker customer sentiment.

The findings also show that the health of the telecoms sector is not determined by country size or GDP. Malaysia, for example, ranks sixth in the global Index despite placing 32nd for GDP per capita. While Norway and Switzerland are both wealthy countries, their relatively small population size has not prevented them from consistently performing strongly across every dimension of the Index.

The UAE also performs strongly across the Index, although its mobile operators are government-owned, unlike those in the UK. Rather than advocating a single model, the research highlights the importance of creating market conditions that encourage sustained investment and better customer outcomes.

The findings come at an important moment for the UK. As the market transitions to three national mobile operators following the Vodafone/Three merger, and consolidation continues in fixed broadband for example through VMO2’s proposed acquisition of Netomnia, the Index suggests the UK has an opportunity to strengthen investment, improve digital infrastructure and build healthier telecom markets that support economic growth and long-term competitiveness.

Owen Tracey, Partner at Kearney, said: “One of the clearest findings from this year’s Index is the relationship between market structure and overall telecom sector health. There is often an assumption that more operators automatically lead to better customer outcomes, but our research suggests the picture is more nuanced.

“In many cases, markets with fewer, stronger operators appear better placed to sustain investment, improve network quality and support long-term sector health.”

Christophe Firth, Partner at Kearney, said: “The timing of these findings couldn’t be more relevant for the UK as the telecom sector enters a new phase. Around the world, countries are recognising that telecoms are critical national infrastructure, underpinning economic growth, digital services and competitiveness.

“Our Index hows that, with the right market conditions, more concentrated markets can create a virtuous cycle of investment, stronger networks and better customer outcomes. For the UK, that presents an opportunity to build a healthier telecom sector that benefits consumers, businesses and the wider economy.”

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Categories: Articles, Broadband, Markets, MNO, Mobile, Research, Telco

Tags: kearney, Netomnia, Virgin Media O2, vodafonethree