Report: North/South European mobile revenue split persists

Operator revenues across Europe are splitting along a North:South divide, according to ratings service, Fitch Ratings. says that Northern counties recorded positive growth, while operators in the South experience worsening conditions.

Overall, in the 12 months to March, the Fitch study said that revenues across Europe continue to decline, down 1.4 per cent, but significant regional differences are starting to appear.

A strong performance by Germany and the UK helped Northern Europe move out of negative growth and post a 1.1 per cent increase in the year to March 2011. A fall in voice revenues in Germany and the UK was more than offset by a rise in mobile data revenues.

However, in Southern Europe service revenues are sliding downwards, off 5.4 per cent in the 12 months to March, as countries in this region are hit hard by economic weakness. Some of this fall, according to Fitch, is due to increasing regulatory and competitive pressure further impacting an already fragile mobile voice market.

Fitch predicted the situation in these countries, especially Spain, to remain under pressure given that voice tariffs are higher than in Northern Europe. To make things worse, the ratings firm believes that mobile data is unlikely to come to the rescue, since data revenue has been falling in Spain and Italy since 2008.

Fitch also warned all European operators that, over the medium term, there is the risk that mobile data, in particular IP-services, will start to cannibalise profitable voice and SMS revenues. Most at risk from this threat are operators with high levels of smartphone penetration with out-of-date pricing structures similar to fixed line providers.

All of this follows a report fro Fitch in March, which hihlighted the North/South divide. During the fourth quarter 2010, operators in the North grew their revenues by 2.1 per cent, while those operating in countries bordering the Mediterranean reported a decline of 6.2 per cent, Fitch said.

For more:
- see this release
- see thus

Related Articles:
Report: North/South European mobile revenues continue to diverge
Mallinson: Mobile broadband prices will hold firm as they tumble
3UK HD Voice service booms within weeks of launch
Report: European Commission knife hovers over data roaming charges
France Telecom, Telefónica push for content charging