A European market that will not regain its 2010 levels... in 2020!
For several decades, the telecommunications sector has been in the throes of profound upheavals. What started with the overwhelming popularity of mobiles and later the internet, has led to today's environment: the era of IP everywhere, cloud computing and big data. This created an environment with no shortage of challenges for telcos hoping to continue to grow.
Telecommunications companies face:
the demand for growth outlets to offset the inexorable decline of now mature sections of their business (voice calling in particular);
the requirement to invest in fixed (fibre) and mobile (4G LTE) new generation access (NGA) systems to handle the explosion in traffic; and
the need to find their place in increasingly open value chains and an ecosystem populated by fast-rising new and ultra dynamic players, including OTT providers, device suppliers, etc.
Consumers are spending more and more time on their phones and computers, using increasingly bandwidth-hungry applications (enhanced content, a lot of video, using multiple devices at once, etc.). But any extra money spent on digital pastimes is tending to be on hardware, as customers are leaning more and more towards low-cost plans for their connection needs.
According to Didier Pouillot, the head of IDATE Telecom Strategies Business Unit, in charge of this report, "...this explosion in consumption and the traffic it generates can also prove an opportunity for telcos, if they can find the right way to monetize it. For them, this is the biggest challenge that lies ahead."
What is next?
"Evolution", can be seen as the middle path, although not built solely on current and short-term revenue trends stretching out into the future. It is characterized by market growth (calculated here for the top five European markets, or EU-5) that has been shrinking since 2008, and expected to dip further still in 2013 (-4%). Growth will continue to decrease in the coming years, with a gradual upswing starting in 2016. This means that in 2015 the market will not have reached its 2009-2010 levels... in nominal value!
The three telecom Services market scenarios, 2008-2025 (EU-5, million EUR)
The other two scenarios describe more "extreme" situations, and help sketch out the perimeters of what the future might hold:
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