Data to overtake European voice revenues within seven years

Intense competition between European operators is continuing to push down voice revenues, with the growing likelihood that income from data traffic could overtake voice by 2017.

While operators have for many years attempted to boost data revenue contributions, the prospect of voice being overtaken was something that few envisioned or contemplated.

The deployment of technologies such as LTE and tablets now looks set to bring about this revolution in data traffic as mobile broadband is increasingly accepted as the model for high-speed connection, and not the exception.

While multi-megabyte wireless services in Europe remain very much in the minority today, where available subscribers claim download speeds of around 5MB are capable of bringing good quality multimedia services (including TV) into households.

This widescale adoption of mobile broadband will, according to the research firm Ovum, kick start a healthy growth in revenues generated from data services. The company believes the UK operator community could see an increase from £6.6 billion in 2009 to £8.4 billion by 2015.

Meanwhile, Ovum claims that revenues generated in the UK through voice services will fall from £13 billion at the end of 2009 to just under £9.5 billion by 2015.

Commenting on this shift in the UK market, Steven Hartley, an Ovum analyst, said: "Data is now a key driver of the mobile market and revenues will continue to grow steadily. By 2015 there will be a much narrower gap between the revenues from voice and data and if data continues to grow at the same rate, it will overtake voice in 2017."

But this picture doesn't come without worries.

Hartley claims that, while the increase in revenues from data services will offset the decline in voice revenues slightly, total UK mobile revenues will decline from £19.7 billion in 2009 to £17.6 billion by 2015.

By contrast, in the US overall revenues will increase from £102.8 billion to £117.6 billion over the next five years.

But fixed line telcos are still investing heavily in fibre deployments with the aim of capturing the market for high-speed services to the home. Their capacity to offer gigabyte speeds is already proven, as against the cellular base station developers who are today only admitting that these speeds might be possible in the future.

Projecting mobile revenues, and in particular data, is fraught with difficulties. Smartphones and tablets are fast becoming (or hyped) as the platforms of choice today, with e-readers perhaps not far behind.

But it's a fickle world, and some believe that this drive towards having high specification mobile devices requiring megabyte download speeds are little more than a passing phase--albeit one adored by a technology-obsessed elite. - Paul