Western European mobile operators are emerging from recession, according to a study that shows an improvement in mobile service revenues over the last 12 months.
However, the same cannot be said for mobile operators in Eastern Europe, as many continued to struggle through the difficult economic period, Analysys Mason has revealed.
“The recession will continue to preoccupy mobile operators in most European countries during 2011,” says Emma Buckland, senior analyst and leader of European telecoms market research.
“However, the key question is how much the mobile sector’s lacklustre performance was driven by recession and how much was the result of longer-term effects, such as sector maturity and the commoditisation of mobile voice services.”
Mobile service revenue based on ARPU declined for the first time – quite suddenly in some cases – in most European countries during 2008 and 2009, while customer bases largely continued to grow. In 2010, mobile subscriber bases continued to grow in most European countries – only Romania exhibited a static base, and the Netherlands lost 2pc of its active subscribers during the year.
Mixed results for mobile service revenues
In terms of mobile service revenue, results are mixed. Total revenue in Western Europe was stable in nominal terms in 2010 – a good result following a 2pc decline in 2009. Revenue grew in most Western European countries, which is encouraging – particularly for markets that contracted in 2009, such as Germany and the UK.
In the markets where revenue decreased during 2010, the rate of decline has usually slowed: the exceptions are the Netherlands and France, which posted worse declines in 2010 than in 2009.
“By contrast, 2010 was bleak for operators in Central and Eastern European (CEE) countries – in other words, 2010 was for CEE what 2009 was for Western Europe,” says Buckland. “In the six countries we considered, mobile service revenue decreased by 5pc overall in 2010 – a greater decline than in the previous year (when their revenue contracted by 4pc).
Only Poland seems to be relatively immune to the effects of recession. Its mobile service revenue declined by only 1pc, which is not surprising given that it had the best overall economic performance (unlike the other five countries, Poland’s GDP did not contract in 2010).
According to Buckland, data services – particularly mobile internet services on smartphones and connected tablets – will also be a key focus during 2011. Operators will need to find ways of using them to kick start their revenue or stimulate the emerging growth of 2010.