Figures from the federal telecom regulator BIPT show that the prices of telecom bundles have risen sharply since 2021. The price of an Orange bundle with fixed internet and TV has even risen twice as fast (+24%) as inflation (+12%) in recent years. It is clear to BIPT that Orange is no longer the price fighter that it used to be. The regulator puts its hopes on DIGI, the fourth telecom player, which wants to challenge the market.
Telecom prices are once again heading in the wrong direction, is the conclusion of a price study by the Belgian Institute for Postal Services and Telecommunications (BIPT). Anyone who is a Proximus or Orange customer has seen their bill rise sharply in recent years, much more than Belgian inflation.
An Orange bundle with internet and TV became 24 percent more expensive in the period from the end of 2019 to the beginning of this year. For Proximus, a government company, this was 22 percent for a comparable package. The consumer price index rose only 12 percent in the same period. In other words, telecom became considerably more expensive than other products and services. It has been known for some time that our country is one of the most expensive countries in Europe for telecom.
The graph below shows the price evolutions of bundles that combine internet, TV and a mobile subscription. We make a distinction between all-in-one bundles with 5 gigabytes (GB) of mobile data and those with 10 GB of mobile data. These are among the most popular among consumers: 40 to 45 percent of families have such a bundle. We also compare the rates of bundles with fixed internet and TV, without a mobile subscription. About a quarter have such a subscription.
It is striking that telecom prices have fallen during the corona crisis, while inflation has risen sharply. In the period from the end of 2021 to the beginning of this year, Orange and Proximus prices have caught up. The prices of most all-in-one plans have risen far more than inflation. In a short time, a large group of customers saw their telecom bills rise disproportionately. On the other hand, Telenet has lowered its prices, but it was already the most expensive player in the market.
Below, compare the price evolutions of the most popular bundles compared to the consumer price index.
For BIPT it is clear: Orange is no longer the price fighter it was in 2016, when it first offered fixed internet and TV. “The change has become clear since the takeover of the Walloon operator Voo in 2021,” notes Jimmy Smedts, spokesperson for BIPT. “Since then, Orange has been strongly anchored in Wallonia. The company is no longer a challenger, but it has become one of the major players.”
At the beginning of this year, Orange Belgium CEO Xavier Pichon said in an extensive interview with Trends that his company has doubled its market share.
Cable cutters win
BIPT research shows that not all products and bundles have become significantly more expensive. Anyone who has a subscription with only fixed internet, or fixed internet combined with a mobile subscription, may have seen their bill drop in recent years.
This concerns the so-called cable cutters, customers who have canceled their TV bundle and instead stream TV programs on their smartphone or smart TV. Cable cutters represent less than 5 percent of the market, but their share is rising. “The advantage of such subscriptions is that competition is greater. There are many more secondary players that compete with Orange, Telenet and Proximus,” Smedts explains.
Compare the price evolutions of telecom subscriptions without TV below.
Why do about half of customers continue to opt for expensive bundles that combine internet, TV and a mobile subscription, when cheap alternatives exist? “There are too many different products and temporary promotions. Moreover, the offer changes quickly. People can no longer see the forest for the trees. Price comparators, such as those of BIPT, are also no longer up to date with the full range. We are working on an update to our price comparator to address that issue.”
Does DIGI live up to expectations?
To stimulate competition in the telecom market, the government is bringing in a fourth player, which will offer internet, TV and mobile subscriptions. DIGI Belgium promises market-disrupting prices, CEO Mitch De Geest emphasized in an interview with Trends in January. “When we say we will market aggressively, we mean it. We can roll out our network very cost-efficiently, which allows us to charge fair prices.”
The regulator BIPT places its hopes on the arrival of DIGI. “The prices I was told in conversations with DIGI are indeed competitive,” says Jimmy Smedts. “We also see this in other countries where it is entering the market.”
But the spokesperson is cautious. “The company still faces many challenges,” he explains. “Rolling out a network, offering roaming, negotiating copyrights, concluding agreements for the use of fixed internet: these are all expensive contracts in our country, and DIGI does not have everything in its own hands. Until such contracts have been concluded, it is difficult to promise truly competitive rates. DIGI also wants to roll out its own fixed network in major cities. That is ambitious, but is it also feasible in the foreseeable future? Therefore, we are very conditional, although we hope that the company can deliver on its promises.”
It is not yet known when DIGI will launch its offering for consumers.
Proximus CEO Guillaume Boutin: ‘A competitive environment in full change‘
Proximus shared its quarterly results on Friday. Group turnover amounted to 1.504 billion euros, 1.2 percent higher than in the first quarter of 2023. In the home markets (without the international branches BICS and Telesign), turnover increased by 4.5 percent. Proximus acquired 21,000 mobile subscription customers, 12,000 internet customers and 17,000 convergent customers. The group’s gross profit (EBITDA) rose 4.4 percent to 465 million euros; net profit increased by 6.5 percent to 101 million euros.
“In a rapidly changing competitive environment, our activities in the home markets continued to perform commercially strong, supported by our product superiority and multi-brand strategy,” Proximus CEO Guillaume Boutin said in a press release.
Proximus “confidently” confirms the annual expectations, with growth in turnover and EBITDA in the home markets, as well as in group EBITDA, “up to 1 percent”. In the meantime, Proximus is preparing to complete the acquisition of Indian cloud specialist Route Mobile. That is expected in May. Route Mobile will be integrated into the international segment of the telecom group.
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