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Global mobile revenues to decline for first time in 2018

Mobile operators worldwide are set to face a decline in revenue by 2018, according to Ovum

Mobile operators worldwide are set to face a decline in revenue by 2018, according to Ovum

A drop in global mobile revenues forecast for 2018 will be the first time in the history of the mobile industry that service revenue contracts year on year, according to industry analysts Ovum.

The firm predicts that global connections will grow by a CAGR of less than four per cent between 2012 and 2018, while global revenues will grow at less than half that rate. The firm warned that, as growth slows and ARPU continues to decline, operators will need to find new ways to serve customers more profitably rather than focusing on increasing subscriber numbers.

Global mobile connections are set to grow from 6.5 billion in 2012 to 8.1 billion by 2018, while mobile service revenues are set to rise more modestly from $ 968bn to $ 1.1tn during the period. But the closing revenue figure will be down one per cent, or $ 7.8bn, on 2017 revenues.

Growth opportunities will still exist though, particularly in Africa, said Ovum. Revenues in the continent are expected to grow at a CAGR of 4.2 per cent throughout the forecast; no other region in the world will see revenue growth at a CAGR above three per cent during the forecast period. Africa will also have the fastest-growing connections, increasing at a CAGR of 5.6 per cent between 2012 and 2018, and ending the period with just over one billion connections.

Certain markets in Asia-Pacific and South and Central America will also drive growth over the next five years, the research firm added. Growth in Asia-Pacific will slow, but this region will remain the biggest contributor of new connections, driven largely by China, India and Indonesia, according to Ovum.

“Growth will continue to slow in most markets around the world,” said Sara Kaufman, analyst for Industry, Communications and Broadband at Ovum. “When you compare connection and revenue CAGRs, it is clear that mobile operators are facing a new reality: they must do much more with much less. Consolidation will help to alleviate some market pressures and is inevitable in many markets. But the need for revenue stabilisation is becoming paramount for a sustainable future.”

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