European mobile operators cannot neglect legacy lines of business

Europe's mobile business faces key transitions of business model, suggests Declan Lonergan, Yankee VP. With markets saturated, revenue growth now is driven by new sources such as mobile broadband and mobile Internet, while the traditional voice and messaging market is flat, or worse.

That means mobile network operators must re-evaluate their market strategies. They have to decide what customer segments to go after, which services to prioritize and what handsets to promote. Most companies seem to be focusing on mobile broadband, mobile Internet, smartphones and high-value customers. But you can see the problem: if all the carriers focus on the same segment, potentially-ruinous competition is the likely result.

Longergan suggests more attention to legacy services is warranted.

Though core voice and messaging businesses are struggling to produce any meaningful revenue growth and are declining in several cases, T-Mobile Germany actually saw an increase in voice usage in 2009 of more than six percent. Telecom Italia, on the other hand, experienced a 7.7 per cent decline in voice revenue.

Over the last decade, text messaging revenues have helped sustain average revenues per user as voice pricing has softened. But average prices for texting services have been declining, and uptake of mobile broadband is growing fast.

For Vodafone, which relied on messaging for 13.4 per cent of its mobile service revenue in the three months to December 2009, non-messaging data accounted for 11 percent. For some service providers, including Telefónica O2 Spain, "other" mobile data is already larger than person-to-person text messaging. Article

 

Suggested Articles

Wireless operators can provide 5G services with spectrum bands both above and below 6 GHz—but that doesn't mean that all countries will let them.

Here are the stories we’re tracking today.

The 5G Mobile Network Architecture research project will implement two 5G use cases in real-world test beds.