Mobile revenues will fall for first time ever in 2018
Global connections will struggle to grow by 4% a year while revenues will rise at half that rate as markets mature
Published: 10 October, 2013
Mobile operators face the toughest period in their short history as markets become saturated and over-competitive, and will have to find ways to add value and compete on service quality not market share. These are conclusions from a new study by Ovum, which this week forecast that western European carriers' revenues would decline at a CAGR of 1.5% up to 2018, while cellcos will face revenue decline on a global basis for the first time in history in 2017-2018.
Global connections will grow by a CAGR of less than 4% between 2012 and 2018, while global revenues will grow at less than half that rate as growth slows, markets saturate and ARPUs decline, says the firm. That means operators will have to find ways to serve customers more profitably, rather than concentrate on traditional KPIs like market share and subscriber numbers alone.
According to Ovum's figures global mobile connections will grow from 6.5bn in 2012 to 8.1bn by 2018, while annual mobile service revenues will rise from $968m to $1.1 trillon. However, global service revenues will fall in 2018 by 1%, compared to 2017, or $7.8bn.
Connections in western Europe will grow by a CAGR of less than 1% during the period, while revenues will decline at 1.48% a year. The US will also see year-on-year revenue decline in 2018 as it mature, though the sharpest drop will be in the Middle East, at 2.5%. Much of the global shortfall will be caused by falling ARPU, which will continue to decline across all markets, at a global CAGR of 2.7% .
The greatest opportunities will be in Africa, where revenues will continue to grow throughout the period of the study, at a CAGR of 4.2%, the only region which will see rates above 3%. African connections will rise at 5.6% a year and by 2017 they will total one billion. The three huge Asian markets of China, India and Indonesia will account for 57% of global connections at the same date, totalling 4.2bn.