10 February, 2012
ETNO second annual economic report
The continuous revenue decline in 2010 and 2011 for Europe’s telecoms sector despite overall timid economic growth confirms that structural rather than cyclical changes are shaping the sector, reveals the second ETNO Annual Economic Report published today.
BRUSSELS – The continuous revenue decline in 2010 and 2011 for Europe’s telecoms sector despite overall timid economic growth confirms that structural rather than cyclical changes are shaping the sector, reveals the second ETNO Annual Economic Report published today.
According to the report, jointly prepared with IDATE, total revenue in Europe’s telecoms sector decreased by 1.4% in 2010. Estimates for 2011 point to a decline by 2%. The revenue decline is mainly due to fixed line revenues which fell by 8%.
Despite revenue decline, investments increased in 2010 by 2.3% and 5% in 2011. This increase is mainly due to ETNO members’ investment efforts although their revenues declined more than the sector average. However, after several years of cuts in expenses, overall investments in the sector remain below pre-crisis level.
“The telecoms sector is faced with a revenue decline for the third year in a row, putting at risk its long term capacity to meet the investment challenges ahead and the achievement of the EU Digital Agenda. Investment, especially by ETNO members, continued to increase and the number of households with high speed broadband networks doubled. However, looking at the persistent decrease in revenues, we see a high risk in terms of future investment capacity. The sector is committed to doing its best but even with these best efforts, favorable and forward looking policies are required to allow operators to keep investing and developing new business models” says Luigi Gambardella, ETNO Executive Board Chairman.
“If revenue from mobile services now accounts from more than half of total sector revenue, its growth is very limited, as markets are becoming saturated, while revenues from fixed services continue to decrease steadily. Up to now, revenue from mobile data services compensates for the decline in mobile revenue but it is not the case for fixed services”, says Didier Pouillot, Head of Telecoms Economics Practice, IDATE.
Market data indicate that while broadband subscribers continued to increase sharply, the number of fixed telephone line subscribers is further decreasing. On the mobile markets, the rapid increase in mobile data usage compensates for the flat growth of mobile voice revenue.
Finally, data on broadband deployments show that 2013 targets of the Digital Agenda are well on track. 2020 high speed broadband targets will be achieved only through a mix of technologies and platforms as shown by the report. In 2010, deployment of FTTH/B and FTTx by ETNO members has increased by 33 and 55% respectively showing that these companies are playing a leading role in achieving the 2020 Digital Agenda goals.
Main findings for ETNO 2011 Economic Report:
- Revenue of EU telecoms sector has declined in 2010 by 1.4% compared to 2009, despite an overall GDP growth of 3.5%. Revenue decline has been less abrupt in the five largest EU markets than in the rest of the EU and is mainly seen in new Member States. According to estimates for 2011, overall sector revenue has declined by 2%.
- Both mobile and broadband penetration continued to increase in Europe (respectively by one and two percentage points) while fixed telephony pursued its downward trend and declined by five per cent.
- Total investment in the EU telecoms sector amounted in 2010 to €44.5 billion, which represents an increase by 2.3% compared to 2009. Investments are significant in the mobile sector as operators have to face with increased mobile data traffic. According to estimates for 2011, investment further increased by 5%. However, investment levels remain below pre-crisis levels.
- Although their revenue decreased more than the average, ETNO members’ investment increased by 4% against 2.3% for the sector as a whole. Their revenue share devoted to investment increased from 12 to 13.1% and they account for 64% of total sector investment. ETNO members devote a slightly greater revenue share to fixed investments (15%) than to mobile ones.
- The number of households being equipped with high speed broadband (FTTx: FTTH/B, VDSL, Cable/DOCSIS 3.0, …) has increased from 38.7 to 79.2 million. ETNO members throughout Europe account for half of the deployments of high speed access networks, but these deployments have increased considerably over the past year, confirming their key role in achieving the Digital Agenda objectives.
For more information, please contact: Thierry Dieu, ETNO Acting Director/ Communications Manager Tel: (32-2) 219 32 42 Fax: (32-2) 219 64 12 E-mail: dieu@etno.be
ETNO’s 40 member companies and 10 observers from Europe and beyond represent a significant part of total ICT activity in Europe. They account for an aggregate annual turnover of more than €600 billion and employ over 1.6 million people. ETNO companies are the main drivers of broadband and are committed to its continual growth in Europe.
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