Europe Telecom Revenue Has Declined Three Years in a Row

By Gary Kim November 19, 2012

Though the global telecommunications business is predicted by virtually all analysts to be growing, that is not necessarily the case in every region.

The European telecom service market decreased for the third year in a row, by 1.5 percent, the European Telecommunications Network Operators Association reports. 

You might blame a tough economy for the contraction, but ETNO points out that in the most-recent year, in a context of moderate economic recovery (+4.2 percent for current gross domestic product in the region), the lagging performance suggests structural changes, not just cyclical economic impact. 

Moreover, Europe's share of the global telecoms market has been declining regularly over the recent years, from 31 percent  in 2005 to just over 25 percent in 2011, as the gap between global growth (+3.2 percent in 2011) and growth in Europe widens.

The decline in fixed telephony revenue is accelerating (-8.3 percent in 2011 and –31 percent over the last five years), driven in part by a negative five percent growth of fixed lines in service. Since 2005, fixed line subscriber accounts are down 22 percent. 

The bad news is that mobile revenue--long the industry growth driver--is also declining (-0.6 percent).

Mobile voice revenue was down 4.7 percent in 2011 (–13.2 percent over the past three years), a decline driven by significant drops in some large countries: Spain (-8.3 percent), France (-8.2 percent) and Germany (-7.1 percent).

Fixed network broadband revenue is the bright spot, as revenue was up 6.5 percent in 2011.

Mobile services, though, remain the bulk of telcos revenue, accounting for 52 percent of the total market (142.7 billion EUR in 2011).

The report also shows the divergence between European and the United States market, where it comes to revenue growth. Since 2006, U.S. service providers have done better than their European counterparts.

Edited by Brooke Neuman

Contributing Editor

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