Mobile network operators' revenues undented by credit crunch, says Ovum

Credit crunch hastens mobile network operators' focus on non-voice services

For immediate release, 23 September 2008. Europe's mobile telecoms industry remains strong despite fears about the impact of the global credit crunch, according to a new report from global advisory and consulting firm Ovum titled 'Europe's top MNOs unfazed by credit crunch'.

"It is business as usual for Europe's mobile operators," says Emeka Obiodu, senior analyst at Ovum and author of the report. "Whereas the markets expected them to take a hit from reduced consumer spending in their operational market, Europe's mobile operators have continued to grow their revenues, with the economic downturn having little impact. Apart from isolated cases, the operators are more susceptible to their usual competitive dynamics than to any credit crunch."

Ovum's report tracked the revenue growth trends of Europe's leading mobile operators in the region's biggest markets from 2007 to date. It reveals that overall mobile network operator (MNO) revenues have grown steadily. The revenue growth rate pattern in France, Germany and Italy suggests the operators are actually improving revenues. This is in contrast with operators in Spain, which show evidence of sustained decline in revenue growth rates. Revenues for UK operators are mixed.

The report identified two key factors that have guaranteed steady revenue growth for Europe's MNOs. Firstly, mobile services have now become quasi-utilities that people can no longer do without. Voice revenues may be falling, but more and more people are signing up for mobile phones even in markets with over 100% penetration rates. Secondly, to offset declining voice revenues, operators are turning their focus to non-voice services, with mobile broadband becoming a big hit for them.

Going forward, the report notes that these conditions will hardly change. Mobile phones will continue to remain popular and mobile broadband services will get even more users. Instead, operators have to worry about continued regulatory pressures on their businesses.

"In many of the markets where revenues are falling, we have observed that cuts in termination and roaming rates have had the most impact on revenue growth rates," says Obiodu. "Given that European regulators are still advocating for more cuts in mobile data roaming, and are pondering an overhaul of the entire tariff structure for mobile services, MNOs face a daunting challenge for the future."

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Notes for editors

The report tracks the revenue growth rate trend for the operations of Orange, O2/Telefonica, T-Mobile, TIM and Vodafone in Western Europe's five largest markets - France, Germany, Italy, Spain and the UK. Together, these five markets account for about 75% of all mobile subscribers in Western Europe.

For further information

For more information or to speak with Emeka Obiodu about this research, please contact Maria Di Martino, Public Relations, maria.dimartino@ovum.com, +44 (0) 20 76757529 or a member of our global PR team listed below.

About Ovum

Ovum is a global advisory and consulting firm. Its primary activity is providing value-added advisory services and consulting to retained and project clients. The company acts as a well-respected and trusted source of industry data, knowledge and expertise on the commercial impact of technology, regulatory and market changes. Ovum engages in continuous research and industry analysis to determine market dynamics in its specialist sectors.

 Ovum has developed long-standing relationships with many of its corporate clients, which include major international blue-chip companies such as Alcatel-Lucent, AT&T, BT, Cable & Wireless, Cisco Systems, Deutsche Telekom, Fujitsu, HP, IBM, Microsoft, Telstra and Vodafone.

Ovum is part of the Datamonitor Group.

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