Abstract
The European region was hit hard by the economic downturn during the first
half of 2009. Although the telecommunications market has proven resilient,
mobile operators' financial indicators have been affected and the new
challenging scenario has reshaped operator strategies.
Through a series of case studies, this Insight provides an analysis and
commentary on the impact of an increasingly complex operating environment on
mobile operators. The report explores how mobile revenue streams have been
affected by regulatory changes as well as shifts in consumer spending
behaviour. The report also highlights those European operators who have
thrived during this period and the main drivers behind this trend.
The report also focuses on changes in capital expenditure strategies that
operators have undertaken in an attempt to control costs and improve EBITDA
levels. In a series of case studies, we analyse how operators have shifted
investment patterns relating to cost saving measures and network upgrades in
light of customer demand.
In summing up, the report highlights the growing importance of marketing to
operators as companies respond to changes in consumer behaviour. At a time
when the European mobile market is becoming increasingly crowded and
saturated, and with the retention of existing customers at the heart of many
operator strategies, the report highlights the importance of promotions and
differentiation in achieving this aim.
Key issues addressed:
- How badly have mobile operator revenues been affected by the economic
downturn?
- What revenue streams have been hit worst and how much of this is due to
regulatory issues?
- What revenue streams have held up better during the last year?
- What are European operators doing to improve EBITDA margins without
compromising market share?
- Are operating choose to downgrade capex spending as a result of the
economic downturn?
- What are European operators doing to tackle restrained consumer spending?
- What new promotions have come out of this new economic scenario?
Key Highlights:
- Informa Telecoms & Media estimates that total wireless revenues have
dropped 2.8% in the year to 1Q09 to € 48.6bn in Europe while service
revenues have fallen slightly less (-2.6%) to € 44.9bn.
- The mid-priced handset appears to be under pressure as mobile customers in
Europe shift either to high end smartphones or the low end market through the
growing number of SIM-only offers. Some operators such as T-Mobile Germany are
subsidizing high end phones while others such as O2 Germany and Orange France
have returned to financing handsets and selling second hand devices.
- Informa estimates that despite capex increasing in Europe by 5% y-o-y in
1Q09 to EUR5.84bn, there was a steep quarterly decline of 33%. This q-o-q
decline was most pronounced in Eastern Europe where CAPEX slumped by 48% q-o-q
to approximately EUR2bn, as compared to a more moderate 21% decline in Western
Europe.
- Informa estimates that ARPU in Europe fell by 11% y-o-y to EUR15.68 during
1Q09 with Eastern Europe experiencing a 13% decline (to EUR8.12) whilst
Western Europe' s was a rather less pronounced 9% (to EUR21.39).
- SIM-only subscriptions have grown significantly in Western Europe with
mobile operators in the UK selling over 1.2 million SIM-only subscriptions
during 2008 (one third of net additions in the year) and German operator
E-Plus reporting over 10 million no frills subscriptions up to 1Q09.
- New tariff plans and promotions have emerged as a result of the
macroeconomic climate. The rise in unemployment has encouraged operators in
Spain, France and the UK to offer monthly bill discounts to the unemployed and
making the shift from corporate to personal plans easier.
Who should read this report:
- Operators
- Vendors
- Telecoms strategists
- Content Providers
- Financial Institutions
- Consultancies
- Government
- Regulators
- Retailers
- Entertainment companies
| 
View Cart
