IDATE: EC faces long road to achieve goal of single telecoms market

European Commission goals of unifying the regions' telecoms markets face several hurdles that will delay the formation of a single market, research firm IDATE predicted.

In its latest DigiWorld Yearbook, the research company said Europe faces a "long journey" towards breaking down national boundaries in telecoms markets, due to three main challenges: price wars that threaten operators' ability to invest in new infrastructure; the need to create a market that allows for pan-European telecoms operators to emerge; and achieving the margins and critical mass needed to reinvent the telecoms sector in a market now dominated by large internet companies.

IDATE noted growth in telecoms service revenues slowed to 2.5 per cent in 2013, while internet services revenues enjoyed growth of around 20 per cent.

Mobile apps and over the top (OTT) video were two of the most dynamic internet services in terms of revenue growth in 2013, with increases of at least 30 per cent each. When combined with social media revenues, the services accounted for 20 per cent of OTT market revenues during the year, IDATE revealed.

OTT's growing market influence requires digital companies to start developing business models compatible with "an all-IP value chain that places most applications and services outside the network," the company stated.

IDATE CEO, Yves Gassot, said the cloud and big data are other "core issues up for debate amongst digital ecosystem stakeholders". The company noted cloud revenues rose by almost 30 per cent in 2013, and accounted for at least 25 per cent of overall internet service revenues.

The company regularly analyses the performance of global telecom, internet and media industries, and noted that total revenues grew 3.2 per cent in 2013 to €3.5 trillion ($4.7 trillion). The growth is up marginally from a 2.8 per cent rise in 2012, as two competing trends affect the market.

On the one hand, growing data traffic is forcing hardware manufacturers to work hard to keep up with a steady pace of smartphone, tablet, and smart TV replacements and upgrades. However, on the other hand, economic factors mean consumers and businesses are being careful with their cash, which is tempering demand for devices.

Didier Pouillot, DigiWorld Yearbook's editor-in-chief, said the modest rise in revenues in 2013 "is a reflection, first, of the ongoing healthy momentum in key sectors and, second, a still bleak economic climate, especially in Europe".

For more:
- see this IDATE press release

Related Articles:
EC competition head rejects calls for changes to aid telecom consolidation
EU reaches 'broadband for all' target, but challenges remain
Ericsson unveils analytics and cloud tools
Alcatel-Lucent wins NTT DoCoMo LTE backhaul contract
Netflix expands European presence, signs exclusive content deal with Vodafone UK
KPN follows Vodafone with live LTE Broadcast trial