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Monday, October 14, 2013

Mobile revenue is expected to decline for the first time ever within five years

New research from analyst firm Ovum predicts that global mobile revenue will drop in 2018 for the first time in the history of the mobile industry.

The number of new connections is still increasing, although figures are expected to rise by a compound annual growth rate of less than 4% between 2012 and 2018, reaching 8.1 billion.

Annual mobile service revenues will rise from $968 billion (£605 billion) to $1.1 trillion (£688 billion) over the same period, although there’ll be a peak in 2017 and a 1% drop in 2018. Average Revenue per User (ARPU) is forecast to fall by 2.7% per year between 2012 and 2018.

Developed markets are expected to see particularly challenging times, with connections in Western Europe growing by an average of less than 1% per year and revenues dropping at a CAGR of almost 1.5%.

Sara Kaufman, the author of the report, said “Growth will continue to slow in most markets around the world. When you compare connection and revenue CAGRs, it is clear that mobile operators are facing a new reality: they must do much more with much less. Consolidation will help to alleviate some market pressures and is inevitable in many markets. But the need for revenue stabilization is becoming paramount for a sustainable future.”

The strongest growth is expected in Africa, where revenue is expected to grow at a CAGR of 4.2% percent during the six-year forecast period and connections are forecast to rise by a CAGR of 5.6%.

[Ovum report]

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Author: The Fonecast
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