Global Telecom Revenue Will Grow in 2014, But That Isn't the Story

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It's the season for predictions about what will happen in 2014. Many of those predictions will center on the size of markets, among them the size of the global telecom market. A safe prediction is that virtually all global predictions will show slight growth, since in nearly every year for which data are available, global telecom revenue has grown. Looking only at revenue trends in a number of developed and developing telecom markets, the overall revenue trend is about flat, with revenue growth of 0.4 percent in 2012, according to Ofcom.

But as has been the case for nearly a decade, the overall numbers hide as much as they reveal. Fixed voice revenues fell by 8.9 percent, for example, calling volumes declined 15 percent and lines in service dipped 3.2 percent, as nearly all revenue growth now comes from non-voice services, with one exception. In most developing markets, as subscriber growth continues, voice revenues and subscription revenues continue to grow.

Still, on a global basis, mobile voice revenues increased by 3.1 percent, mobile data revenues by 10.4 percent. Fixed broadband revenues increased by 5.2 percent and connections grew by eight percent during 2012.

And pressure on voice revenues continues. Some 14 percent of people in the United Kingdom with a home phone do not use landline services regularly. As any student of churn will attest, non-use is a very good predictor of future disconnections. In Japan, 24 percent of respondents had a landline but were not regular users of fixed voice services. Fixed network call volumes fell in all countries studied by Ofcom, with the exception of France, between 2007 and 2012.

Total fixed-line voice call volumes fell by an average annual rate of 5.5 percent to 1.5 trillion call minutes between 2007 and 2012, for example. But fixed network call volumes increased in France by an average annual rate of 1.3 percent over the same period.

As you might guess, mobile revenues were growing as fixed network revenues were shrinking. U.K. mobile revenues increased by an average of 2.2 percent a year between 2007 and 2012. Sweden mobile revenues grew at a 7.5 percent annual rate.

All that noted, what is important is not "global growth," but regional growth trends and changes in the composition of revenue contributors. That will continue to be the story in 2014. 




Edited by Cassandra Tucker
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