Two new reports warn of a bleak future for the European mobile industry.
Research from Telco 2.0 predicts “brutal” losses for mobile operators in the UK, France, Germany, Spain, and Italy.
Their combined revenues from voice, messaging, and data services are expected to fall by nearly €20 billion, over the next five years – equivalent to four percent per year – and by €30 billion by 2020.
The report cites market saturation, increasing competition on core services, tightening regulation as well as threats from internet-based app ecosystems and OTT-type services as contributors.
While noting the value of data growth, service bundling, customer experience improvements and cost-cutting, it claims these cannot offset the voice and messaging losses.
The report stated: “To the best of our knowledge, nobody else has made forecasts that are both dispassionate and founded on hard data and bottom-up analysis.
“The future looks much worse than other analysts and industry observers are currently forecasting.”
Telefonica Digital, KPN, Orange and Telenor were picked out for their activity in digital services and new business models, but the report said such moves “urgently need to be accelerated and prioritised if operators stand any chance of replacing the impeding revenue declines”.
In a separate report, Ovum concurred with the grim outlook on messaging.
The analyst house predicts that operators will lose over €41.6 billion in SMS revenues by 2016 due to the popularity of smartphone messaging apps.
This is more than double the €17.7 billion they are expected to have lost by the end of 2012.
The forecast came in a report on how operators can counteract the social messaging threat posed by OTT players, particularly in Europe and the Asia-Pacific.
Neha Dharia, consumer telecoms analyst, said: “Operators need to understand the impact of social messaging apps on consumer behaviour, both in terms of changing communication patterns and the impact on SMS revenues, and offer services to suit.”