Dutch mobile market revenues drop 6.4% in Q3 2013

Dutch mobile market revenues drop 6.4% in Q3 2013

Dutch mobile service revenues fell 6.4 percent annually and declined 1.9 percent quarterly to a total EUR 1.36 billion in the third quarter of 2013. According to independent market researcher Telecompaper’s quarterly mobile monitor, the main reason for the market contraction is the continued strong decline in voice revenue, which was not compensated by growth in data services.

Non-voice services, consisting mainly of data and SMS, are estimated at 42.1 percent of total mobile service revenue in the quarter, but these are not growing fast enough to offset fully the erosion in voice revenues. The split between voice and non-voice services is becoming less relevant as well, as operators move towards offering one fixed price for connectivity, rather than charging individually for minutes, SMS and data.

Telecompaper has updated its five-year outlook for the Dutch mobile industry. Based on the recent quarterly results and current market conditions, we expect the Dutch market to show a decline of 6 percent to EUR 5.5 billion in service revenue over the full year 2013. For the period 2013-2017, the Dutch market is expected to show a negative CAGR of 2.5 percent, reaching around EUR 5.1 billion in revenues in 2017.

Our negative outlook is due to the slowdown in data revenue growth, which can no longer compensate fully for the drop in voice revenues. The latter will also be impacted by the recent cuts to termination rates from the start of September 2013. In addition, the slow economic recovery in the Netherlands, continued regulation and a greater impact from OTT and Wi-Fi services are putting pressure on revenues. “Regulation as well as the shift in customer behavior to more data-centric services will force operators to make further changes to 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

In the third quarter, only T-Mobile increased its market share of service revenues (including wholesale) on an annual basis, at the expense of KPN and Vodafone. T-Mobile was the only operator to grow revenue on a quarterly basis and lost the least amount of revenue on an annual basis, leading to a sequential improvement in its market share. KPN showed the largest absolute decline in revenues across both periods.

The Dutch market saw a slight decrease of 1.3 percent year-on-year in the number of mobile SIMs (including MVNOs), to a total 20.3 million at the end of September 2013.* Mobile market penetration decreased from 122.5 percent at the end of September 2012 to 120.5 percent this year. KPN’s market lead increased to just under 48 percent of subscribers (mainly due to the migration of MVNO Lycamobile from Vodafone to KPN), while Vodafone saw its market share decrease to less than 27 percent, and T-Mobile was relatively stable at almost 26 percent.

Note: Due to a change in reporting since last quarter, these figures exclude M2M SIMs. As a result, total subscribers and market shares cannot be compared to previous Telecompaper releases.

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