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Dutch mobile market declines 4.5% to EUR 5.8 billion in 2012

The Dutch mobile industry realized EUR 5.8 billion in service revenues for the full year 2012, down 4.5 percent from 2011 and the second consecutive year of decline. In 2011, the annual decline in service revenue amounted to 3.8 percent. According to independent market researcher Telecompaper’s quarterly mobile market monitor, the sharp drop in voice revenue after regulatory price cuts was again the cause of lower service revenues in 2012. While revenues from mobile data services are still growing, the rate of growth has slowed to single digits, meaning data services cannot fully compensate for the drop in voice revenues. Excluding the regulatory impact (mainly from lower mobile termination and roaming prices), Telecompaper estimates annual service revenue at mobile network operators fell 2.0 percent in 2012.

In the fourth quarter of 2012, mobile service revenue decreased 6.8 percent year-on-year to EUR 1.4 billion and fell by 2.3 percent compared to Q3 2012. The annual comparison is somewhat skewed by one-time deferred revenue included in T-Mobile’s Q4 2011 revenues (EUR 47 million), resulting from the operator’s end to unlimited rollover of voice minutes in all contracts.

Telecompaper has updated and expanded its five-year outlook for the industry following the 2012 results. For 2013, it expects the Dutch market to show a decline of 2-3 percent to around EUR 5.6 billion in service revenue. For the period 2013-2017, the Dutch market is expected to be flat to slightly negative, with a CAGR of -1 percent to around EUR 5.5 billion in revenue in 2017. The slightly negative outlook compared to the market researcher’s previous forecast is due to expected late effects of the economic slowdown, continued regulation and a larger impact from the threats of OTT and Wi-Fi services. “In addition to regulation, the shift in customer behavior to more data-centric services will force operators to adjust their pricing in order to counteract the continuous drop in voice revenues,” said Alejandra van de Roer, Telecompaper senior research analyst and author of Telecompaper’s quarterly mobile market monitor for The Netherlands.

Looking at the performance of the three mobile network operators, the report shows that Vodafone outperformed the market in 2012, with the smallest annual service revenue decline of 1.7 percent. In contrast, T-Mobile’s service revenue in 2012 contracted by 4.6 percent (including deferred revenues in Q4 2011), and KPN’s revenues fell by 6.3 percent.

In terms of customer numbers (including MVNOs), the Dutch market saw an increase of 1.0 percent annually to 21.2 million mobile Sims at the end of 2012, mainly due to growth in the postpaid base. As a consequence mobile penetration increased from 125.6 percent at the end of 2011 to 126.4 percent at the end of 2012. Market shares of the MNOs were relatively stable compared to 2011, with KPN having 47 percent all SIMs, Vodafone at 29 percent and T-Mobile at 25 percent. Excluding M2M and MVNOs, the market shares were somewhat different, with KPN dropping to 41 percent, while Vodafone and T-Mobile increased to respectively 31 percent and 28 percent.