As you mentioned, Chairman, our chief executive officer, Stewart Sherriff, had a relatively minor but critical medical procedure. It occurred yesterday in the United States, so unfortunately he could not be here today. We are grateful for your comments and will take them to him.
We have brought along the senior management team of the company. On my left is Cliodhne Whelan, chief financial officer, Liam Hamilton, technical director, and Jan Remmelg, commercial director. We hope to be able to answer any questions. We are delighted to be here.
We will run through a presentation which will give you a little information on our company background. We will not take too long on that. We will look at issues such as our impact on the market, delivery and competition. Our presentation may be different to the two that have gone previously. My interpretation of them was that two operators spoke about themselves and not about competition or prices. We will be talking about them as well as ourselves, and about competition and prices, because we understood this is what the work of the joint committee is about. We will also look at some other issues, including coverage and national roaming and at the end we may have a request for the joint committee to consider.
In February 2001, Meteor launched the third GSM operator, that is, 2 and 2.5 GPRS. As everybody is well aware, there was a two year court delay so we entered the market when there was high market penetration. Two years on, we have invested well over €200 million in the network infrastructure and we have over 85% population coverage with no capacity constraint. Previous presentation referred to taxis and cars. Our network is state of the art. The equivalent is like driving on a Friday on the M50 between the5 a.m. and 7 a.m. on the one hand, and 5 p.m. and 7 p.m. on the other hand. The experience is entirely different with regard to how fast one gets to somewhere.
We have 12 owned retail stores, 300 store outlets, that is other retailers who sell our products, and 7,000 top-up locations nationwide. We have 320 staff in Dublin, Limerick and Galway and our majority shareholder is Western Wireless of the United States. It is an 80% majority shareholder.
I understand the joint committee has been told by the Consumers Association of Ireland that we have a 3% market share. That is an old figure. The last reported figure from ComReg for the first half of the year was over 4%. We predict we will have 6% or more by the end of this year and 10% by the end of next year. The competitive element we are bringing to the market is working
As far as are concerned, competition exists in the Irish market and Irish mobile phone users have a genuine choice. From our point of view that choice is coming from us. We are offering better value, lower prices and better services. Competition exists, but not between Vodafone and O2. They comprise a duopoly while we are trying to bring competition to this market. They both focus their attention on us as the smallest operator and we believe that in their marketing and approach to the market they are projectionist rather than competitive. However, we have succeeded in bringing competition to the market and we have forced prices down.
Some 70% of the overall market is pre-paid while 97% of our subscriber base is pre-paid, so for the most part we will talk about the pre-paid market. We are not, at this stage, very active in the post-paid market. We have simple tariffs and we offer lower prices. We have driven huge SMS growth in this country. We have low tariffs which have stimulated the market and we have forced Vodafone and O2 to compete. On average, Meteor customers pay one third less. That is substantiated. We had to substantiate it in order, for example, to carry the advertisements on RTE.
The ComReg presentation, which has been referred to several times, and the slides they used acknowledged Meteor's competitive impact on the market. Our pre-paid tariffs in this country are the third lowest in Europe and below the EU average. We have taken this slide from ComReg's own website, which they presented to you last week. It shows Ireland being the third highest with the post-paid basket and the third lowest for the pre-paid basket. ComReg's bullet point on that slide was very interesting to us. It states: "Meteor is more active in the pre-paid market." It was an acknowledgement, which we have verified with ComReg, that where the third operator is active in the market there is competition and prices are lower. This is the impact that Meteor has had on the market, not the impact of the big two.
In a competitive comparison, where prices are lower, usage is stimulated. High usage of voice and SMS on the Meteor network does not lead to higher ARPU. Meteor SMS usage per subscriber is more than double the industry average. The industry average is 78 SMS, or text messages sent per month; Meteor customers average 179. Some 25% above the average of those SMSs are paid for SMSs. They are not free, they are paid for. The lower tariff is effectively stimulating growth and use. High usage, we think, reflects the customer response to low prices. Our price is the lowest in the market, at 9 cent anytime to all other Irish networks. There are no restrictions and Meteor to Meteor is free.
Average revenue per user has been mentioned. The figures may vary slightly in terms of interpretations of international or published figures, but they are pretty close to what the committee has been talking about, which is a Vodafone ARPU of €46 per month, an O2 ARPU of €45 per month, while our ARPU is €27.50 per month. The same comments cannot be levelled at us regarding high ARPU usage.
The Chairman referred earlier to the Yankee report. The next slide shows ComReg's ARPU reporting with Ireland shown as third highest in Europe. Superimposing our ARPU over that graph shows that the Meteor ARPU is about the fourth or fifth lowest in Europe. At €27.50, it is €2.50 below the €30 EU average on the ComReg and Yankee graphs.
Much interest has been shown by the committee in tariffs and the publication of same. What committee members see in front of them are our tariffs. We have only two pay as you go tariffs: Meteor "leisure time" and Meteor "any time". They are exactly what they set out to be by way of title. "Leisure time" is a tariff for social users who use their phones in the evening and at weekends whereas "any time" is a tariff used mainly by higher use customers who use their phones during the day. Our subscriber base is 97% pre-paid. We have post-paid tariffs and will make them available to the committee. They would take up just one other page; we do not have reams of them. We have always stated since our launch that we would bring a simple approach to the markets in order that all customers would understand exactly what they receive and for what they pay and are charged.
The following few slides are some comparisons to indicate to the committee where a third operator, in this case Meteor, brings competition into the marketplace. I will not go through them line by line given the amount of time we have, but they are available to the committee members to study at their leisure. We show in these that, in terms of choosing an off-peak or peak tariff, Meteor is significantly cheaper. Depending on usage, it can be between 29% and 86% cheaper. As we said earlier, on average our customers pay one third less.
With regard to top-up, we reward loyalty. Every time a customer tops-up on our network, he or she receives a Meteor reward bonus. On average, customers receive an additional 10.5% free call value as a bonus for topping up.
We believe we are the texters' network of choice. We drove SMS growth in this country by first introducing a 7p text which translated into a 9c text. Now Meteor to Meteor text messaging is free. One thousand texts with Meteor can be cheaper than one text with our competitors because one cannot get much cheaper than free.
We also offer the cheapest international and roaming text rates. When people go abroad, they like to use their mobile phones for texting because they believe it to be cheaper. The rates show that both international texts from Ireland and from abroad are cheaper on the Meteor network by a substantial difference than the other two operators.
We may be a newish operator in this country. However, we have 180 roaming partners in 90 countries. Our customers can use their phones globally. Prices are significantly cheaper where Meteor has control. We have no control in some areas but we remain highly competitive there and negotiate the best prices for our customers. Often these prices are the cheapest available.
On the issue of control, effectively Meteor controls the cost of a call received while abroad if the call comes from its network. The cost of making a call when a customer is abroad is controlled by the host operator in the country in question. Where the control lies with the host operator, we add a 15% margin which covers our costs in terms of routing that call, customer care and all the other costs associated with it. When all these costs are removed, the margin to Meteor on that rate is 2% which we do not regard as excessive. Where we have no control, we negotiate the best prices we can on behalf of our customers.
In countries where Meteor has control - where we send a call abroad - prices are lower for a Meteor customer to receive a call on the O2 or Vodafone network in some countries than it is for Vodafone's and O2's customers. That may sound a little unbelievable but it is true. We have some indications which will be seen on the next page of our presentation. In the United Kingdom, France, Germany, Italy and Spain it is cheaper for a Meteor customer to receive a call while roaming on the Vodafone network than it is for a Vodafone customer. It is cheaper in the UK, Germany and the Netherlands for a Meteor customer to receive a call while roaming on the O2 network than it is for an O2 customer. The same applies to SMS. In the five countries I listed where Vodafone has operations, the text rate is 30c for Meteor and 49c for Vodafone. It is 30c for Meteor in Germany, the UK and the Netherlands and 44c for O2.
Meteor is consistently cheaper than Vodafone and in many cases cheaper than O2 when roaming on networks not owned by either. This underlines how well we have negotiated lower roaming tariffs. This means we offer our customers a wider range of networks when they travel abroad. Networks in all countries, as in this country, are different. They differ in terms of service levels and coverage in different parts of each country visited. We do not believe it is right to limit a customer travelling abroad to roaming on a single network. It could be argued that Vodafone is forcing its customers to choose its network while abroad to obtain the commercial value from that because it charges significantly higher rates to use another network. In theory, it should be as capable as we are of negotiating rates on other networks.
I will not go through the slide dealing with international outgoing calls but the committee members may wish to examine it. It shows some examples where, even though we do not have control and are not a global network, we negotiate the best possible and often much cheaper prices for our customers. I have highlighted one in bold at the end because the poor Irish soccer supporters in Switzerland last week could have phoned home on Meteor for 96c or €1.59 on Vodafone. They were sad enough without having to pay €1.59 for a call.
We do not believe O2 passes on to its Irish customers the savings of having its own networks abroad. The all-Ireland rate is an add-on service. It costs €7.50 per month to have access to that service. O2 charges the same rate of €1.20 no matter what network is used. Although at €1.19 it is only 1c of a difference, it is still cheaper for a Meteor customer to make a call on O2 Germany than it is for an O2 Ireland customer to make the same call. It is O2's network; why are wecheaper?
At its launch, Meteor announced flat rate tariffs for the first time for Ireland and the UK. We still offer the same rates for calls to mobiles and land lines in the Republic of Ireland, Northern Ireland, England, Scotland and Wales. We offer cheaper international rates than Eircom to many locations, including central Europe, Africa, Australia and New Zealand. We offer the cheapest international text and voice rates in ten out of 13 international areas, including the UK land lines and mobiles, even though Vodafone and O2 are UK companies. Meteor is also cheaper than Vodafone and O2 for international calls to EU countries, central Europe, the USA, Canada, Australia and New Zealand, the latter of which are English speaking areas. The graph I am showing highlights ten of the 13 international areas to which I referred where Meteor offers the cheapest service.
Mobile number portability has been introduced in this country. It is a strong competitive tool and was resisted strongly by Vodafone and, in our view, possibly still is, but was championed by Meteor. Difficulties since launch have been mainly due to system problems with Vodafone and O2 which we believe demonstrate a lack of commitment to competition.