Research shows investment in data services and smart phone subsidies set to pay off for operators
According to Informa Telecoms and Media research, revenues from the nearly 1000 operators worldwide is expected to exceed $1 trillion in 2011 and increase to $1.14 trillion in 2015.
Operators worldwide generated $965 billion last year in service revenues mainly thanks to an increase in data use which offset declining core-voice profits.
The research company said large scale operator investment in deploying next generation networks, subsidising smartphones and building out extensive multichannel retail footprints are paying dividends.
Informa Telecoms and Media principal analyst Thomas Wehmeier said: “The operators may earn big, but it should never be forgotten that they also invest heavily to generate these returns.
“Deploying and operating mobile networks to support more than 5.3 billion connections is an extremely resource-intensive business and Informa Telecoms & Media estimates that operators worldwide invested more than $175 billion in CAPEX during 2010 alone.
“Cumulatively, total CAPEX spend shelled out by operators has been in excess of US$1 trillion over the past decade.”
While data revenue is increasingly becoming more important to operators, Wehmeier said research showed voice profits, although declining were still important.
“If the media hype is to be believed around the impact of over-the-top VoIP players such as Skype and Viber and the emergence of competing forms of social communication, you’d be easily pressed into believing that operators should start thinking about writing off their voice businesses,” Wehmeier said.
“Such talk is of course foolhardy and revenues from voice services will still make up more than 60 per cent of the industry’s revenue base at the end of 2015.”
However Informa said voice will enter a period of managed decline during over the next five years.
“European voice revenues have been going backwards for a couple of years and by 2015 voice revenues will have declined in every major global region for the first time ever,” it said in a statement accompanying the research.
“The imperative for operators to offset eroded voice revenue streams through the provision of services based on the foundation of their connectivity pipes remains as strong as ever.”