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This publication covers the major operators in Europe’s mobile markets, providing key customer statistics, revenue statistics, operations and market developments.
The countries covered in this report include: Albania, Austria, Belarus, Belgium, Bosnia-Herzegovina, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Kosovo, Latvia, Lithuania, Luxembourg, Macedonia, Malta, Moldova, Montenegro, Netherlands, Norway, Poland, Portugal, Romania, Russia, Serbia, Slovakia, Slovenia, Spain, Sweden, Switzerland, Ukraine, United Kingdom.
Europe's mobile operators look to international opportunities and LTE for future growth
The value of Europe’s mobile market has shown consistent but slower growth for several years. This slowdown has largely been due to intensifying competition which has led to falling prices for voice minutes, as well as regulatory measures which have reduced roaming and interconnection charges. This negative impact has been compensated by increased consumer use of mobile data services.
In response to this trend, mobile network operators (MNOs) have during the last few years focussed their efforts on migrating prepaid users to contract plans, commanding higher ARPU and higher average use, and on cultivating high-end mobile services among subscribers. These efforts will continue as MNOs move forward. To support this, most CAPEX is being channelled to upgrading networks to utilise HSPA and LTE technologies, and to investing in spectrum licences as they become available.
Moving from voice to data
These upgrades, having considerable implications for revenue, business models and investment opportunities, will be paramount during the next few years if MNOs are to avoid further capacity restraints on their stretched networks. To alleviate the burden, an increasing number of operators have abandoned offers of unlimited data use, instead reverting to caps of about 500Mb/s per month. Although mobile broadband revenue has doubled annually since 2007, the sector still only accounts for no more than 10% of total revenue. Considerable further growth is anticipated to the end of the decade.
Mobile operators have similarly expanded their interests in the fixed line sector. Led by Vodafone, which now operates IPTV, broadband and telephony in several European markets, this diversification has extended the revenue base and so weakened the continuing financial impact from falling mobile voice revenue.
Exploiting international opportunities
The financial difficulties experienced by all main cross-border MNOs in Europe in the wake of the continuing global economic crisis has led to their major strategic restructures and reviews of international commitments. Two of the main players, T-Mobile and Vodafone, have recently withdrawn from significant international markets (T-Mobile selling its US interests, and Vodafone selling interests in France, China and Japan). By contrast, TeliaSonera has expanded in Central and Eastern Europe, as well as in Eurasia, while Telefónica has skilfully used its advantages of language and cultural ties to consolidate its position in Latin America. As mobile software, technologies and applications steadily lessen the difficulties inherent in managing international businesses, players which recede from their global aspirations risk limiting their growth opportunities in coming years. Yet despite some retrenchments, Europe’s mobile operators remain a keystone for investors and for opportunities in developing markets alike.
Growing MVNO market share
MVNOs, offering own-branded mobile subscriptions and value-added services, have had a significant impact on the market generally, and on the operating behaviour of the host MNOs. Many of the latter have entered the field by buying up MVNOs and resellers, and so can tap into a low-cost segment while retaining their high-end brands. Nevertheless, MVNOs have succeeded in exploiting niche markets and novel business models. Some MVNOs have fruitfully targeted expatriate communities, while others have emerged as offshoots from large retailers (particularly in the UK, Germany, France and Spain). Sympathetic regulatory measures have helped the MVNO and reseller sector prosper, and during the next few years some markets will see them command up to a third of mobile subscribers.