The wireless industry may be getting through the recession relatively unscathed compared to other sectors, but mobile operators still face tough challenges. As in the handset segment, where resilience has been seen at opposite ends of the spectrum – smartphones and emerging market handsets – the strongest areas for cellcos have been mobile data services and low cost prepaid propositions. But globally, 40% of mobile operators experienced a dip in service revenues in the difficult first quarter of this year, up from 16% in the year-ago quarter.
According to Strategy Analytics’ latest report, total service revenues were $163 billion, while the number of subscribers was up 17% year-on-year to 3.67 billion, though nearly all this growth in Q109 came from Asia-Pacific, and new customers were rare outside Asia – new net additions were down 17% worldwide, and in Western Europe, slumped by 90%.
Global mobile revenue growth fell to just 3%, from 8% in Q108, with the saturated western European markets hardest hit. Here, total revenue decline by 1.3% – partly because of the economic climate, and partly because this area has reached the top of the service revenue growth curve. This was the first drop – even in the equally tough Q408, western Europe managed 0.5% growth.
ARPU also fell in all regions – in north America by just 1.3% as the region benefits from still being on the upward side of the data growth curve, while Asia-Pacific saw a slump of 17%. The shift in the Asian balance of business was clearly highlighted by the contrast between this figure and a sizeable rise in new subscribers – the area accounted for 90% of the world’s net adds, as countries like India add huge numbers of users, but at low ARPU levels.
Where there was growth, it was mainly seen in mobile data service revenues, which now account for over 25% of the global total, up from almost 22% a year ago; and prepaid deals. Worldwide mobile penetration is now 64.2%, up nine percentage points year-on-year, and 32 countries now have over 100% penetration, led by Greece on 175.2%. Global capex reached $16bn, equivalent to 14% of service revenues, down 1.4 percentage points on the 2008 figure.