Operators to see declining revenues until 2016

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Consultancy firm Arthur D. Little has found mobile operators’ revenues will decline at least until 2016, as they struggle to make enough money from 4G

Mobile operators’ revenue will decline by 1.8 per cent per year until 2016 as they struggle to monetise 4G services, a consultancy firm has found.

A report by firm Arthur D. Little has found operators will find it difficult to make money out of 4G as there are limited opportunities for differentiation.

Based on discussions with 91 companies in the telecoms-media-technology (TIME) sector across 15 countries, the report models revenue decline of 1.8 per cent annually until 2016.

The sector could return to growth if 4G smartphones earned operators on average €17 (£14.50) per month by 2016.

“However, as this is €7 (£6) higher than today’s figures for 3G smartphones, it represents quite a stretch,” the report said.

EE, the only UK operator to have launched 4G to date, currently prices its 4G services at a £5 premium to 3G.

Arthur D. Little’s Telecommunication, Information, Media and Electronics (TIME) practice director Didier Levy said: “4G will be a commercial success in Europe but is unlikely to restore pricing power in the industry.

“To deliver business growth there are a number of innovation areas European operators should focus on, including introducing shared data plans which are already successful in the US.”

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