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IDATE, partner analyst at the LTE World Summit 2014, has published the findings of its World telecom services watch.
After the trough of 2009 and hesitant growth in 2010, the global market has been growing at a moderate pace since 2011. Growth in 2013 stood at 2.4 per cent “`we have observed that, by and large, telecom services are recovering more slowly than the economy as a whole,” reports Didier Pouillot, head of IDATE’s Telecom Players & Markets Business Unit.
Now in a recovery phase, telecom markets in advanced countries are proving somewhat resilient, whereas in fast-developing markets the underlying momentum is coming from volume. This phenomenon is telling of a mature industry now driven more by demographics than economics. In Africa/the Middle East, for instance, the drop in regional GDP in 2009 (-6 per cent) and its rebound in 2010 (+16 per cent) had very little impact on telecom services growth rates which remained very high both years: +8 per cent and +9 per cent, respectively.
Revenue from telecom services
According to IDATE, global telecom services revenue will increase from €1,186 billion in 2013 to €1,341 billion in 2018, representing an average annual growth of 2.5 per cent.
– Revenue from mobile services will grow by 17 per cent between 2013 and 2018 (+3 per cent a year on average), reaching €826 billion in 2018.
– Revenue generated data transmission and Internet access will enjoy more substantial growth (+24 per cent between 2013 and 2018, i.e. an average +4 per cent per annum), to reach €338 billion in 2018.
– Fixed telephony revenue will continue its sharp decline: -15 per cent between 2013 and 2018, i.e. dropping by an average 3 per cent a year, down to €177 billion in 2018.
More mobiles, more users
According to IDATE, the number of mobile customers worldwide should top the 8 billion mark by the end of 2018 (+21 per cent in 5 years).
– The number of fixed Internet subscribers will grow more slowly (+18 per cent between 2013 and 2018, +3 per cent a year on average). The one billion mark is not expected to be reached before 2020.
– Traditional landlines continue to loose ground as VoIP and mobiles gain.
The spread of broadband
According to IDATE, the number of fixed broadband subscribers is expected to reach 858 million worldwide by 2018, for a penetration rate of 12 per cent of the global population. The number of LTE customers is shooting up, and LTE-Advanced users are expected to increase swiftly in early adopter countries.
IDATE forecasts more than 1.3 billion LTE subscriptions worldwide by the end of 2017, generating a total €400 billion in revenue
Two major factors will work in broadband’s favour:
– The success of bundled offers (fixed telephony, VoIP, TV, mobile telephony) and the appetite for video applications.
– Telcos’ investments in migrating their infrastructures to mobile or fixed broadband.
Scalability of operators
– European operators are still in trouble, with a growth momentum that is running out of steam, despite strong investment needs
– North American telcos are benefiting from a solid growth rate at home, especially in the mobile market.
– If several major telcos from emerging countries continue to enjoy swift growth rates of close to or above 10 per cent (Bharti Airtel, China Mobile, China Telecom, China Unicom), a number of them saw their growth flatten and tumble to virtually nil in 2013 (America Móvil, MTN, Oi, Vimpelcom). But margins remain high: EBITDA margins of between 30 per cent and 40 per cent, and even higher in some cases. Several of these operators are widely engaged in international expansion strategies.