The Sunrise/UPC merger’s implications for Switzerland’s mobile and fixed broadband markets

The merger of Sunrise and UPC Suisse (UPC) will have far-reaching implications for Switzerland’s telecommunications landscape. Opensignal has assessed the proportion of users for each of Sunrise’s mobile operator rivals that used UPC as their internet service provider (ISP). We have found that a significant majority of our users who used UPC as their ISP relied on operators that are not UPC or Sunrise (or the latter’s sub-brands) for their mobile connectivity. 

We investigated the potential for bundling and cross-selling opportunities between fixed and mobile operators in Switzerland [1]. First, we looked to see what proportion of our mobile users use the same company for their fixed broadband service [2]. Similarly, we then analyzed what proportion of each ISP's customers used which mobile operator's service.

Roughly one in five of our Salt mobile users for which we also identified an ISP used UPC as their ISP. Given the Sunrise/UPC merger, our data suggests that the combined entity would have the opportunity to try and entice this subset of our user base with bundled mobile/fixed-line deals.

Out of the three mobile operators, Salt had the lowest proportion of our users that relied on it for both their mobile and fixed services. This reflects Salt’s relatively recent entry into the ISP market — it announced its ISP service in March 2018 — so Salt has only been active as an ISP for roughly three years.

By contrast, most of our Swisscom mobile users also used it as their ISP, reflecting Swisscom’s status as the dominant ISP in terms of market share. However, around one in eight of our mobile/fixed users that used Swisscom’s mobile services used UPC as their ISP. Due to Swisscom’s large market share, in our data we found more Swisscom mobile users that used UPC as their ISP than Salt mobile users who used UPC as their ISP. 

 

When we looked at the most popular mobile networks for our ISP users, our data showed that the majority of our UPC fixed users relied on other brands for their mobile service, which is unsurprising given that UPC mainly operates a cable and broadband business. This remains the case when we count those UPC users that used Sunrise or one of its major sub-brands, as having used UPC for their mobile service. When we considered UPC and Sunrise as a single merged entity, a lower proportion of its fixed-line users relied on it for mobile service than its rivals. 

Our data therefore suggests that there is a sizable potential audience within UPC’s fixed-line customer base that the combined entity can target with mobile/fixed bundle deals. 

Work to integrate Sunrise and UPC has been in progress since November 2020 and the two companies launched a combined offer in March. If these are the first steps in a coordinated campaign to capitalise on both companies’ strengths in the mobile and fixed markets, then Swisscom and Salt will need to increase efforts to offer a great mobile experience to retain their customers. In fact, we have seen across several markets that mobile users that switched operators usually had a worse mobile experience than the average for their network before they churned for example in Italy, Germany, and India.

While customers might be tempted by bundled offerings from the newly combined Sunrise/UPC, Opensignal’s analysis shows that mobile users are more likely to change their operator when they have a weaker experience than that typically observed on their network. This means that, as long as Swisscom and Salt users are happy about their mobile experience, they will be less likely to be tempted by a bundled mobile/fixed broadband offer.
 

Notes
1 In this analysis we identified a subset of our Swiss users which used a Swiss operator or MVNO for their mobile connections as well as a major local ISP for their fixed broadband services in the 90 days starting October 1, 2020 and ending December 29, 2020 and then investigated which ISPs were being used by mobile users within this sample and vice versa.

2 We have treated mobile sub-brands including Wingo, M-Budget Mobile, Yallo, Lebara, etc. as part of their parent brand on the assumption that the MNOs could cross-target users on their sub-brands as well as their major brands.