Dutch mobile service revenues contracted 6.7% year-on-year in the second quarter of 2013 to a total EUR1.38 billion.
According to Telecompaper’s quarterly mobile monitor, the annual rate of decline is more than twice that of the same period last year, as a drop in non-voice revenue (SMS and data) added to the continued fall in voice revenues.
Seasonally the second quarter is stronger than the first, but this year’s quarterly growth of 0.6% was a third of last year’s rate, with revenues increasing by only EUR8 million. Non-voice services now contribute 40% of total mobile service revenue, but these are not growing fast enough to offset fully the erosion in voice revenues.
The weak market performance in the first half of 2013 led to a downgrade in Telecompaper’s outlook for the Dutch mobile industry. The market researcher now expects the Dutch market to show a decline of around 6 percent to EUR5.5 billion in service revenue over the full year. For the period 2013-2017, the Dutch market is expected to show a negative CAGR of 2.5%, reaching around EUR5.1 billion in revenues in 2017.
The reduced forecast is due to the slowdown in data revenue growth, which can no longer compensate fully for the drop in voice revenues. The latter will also be impacted by a new cut to termination rates from September. In addition, the slow economic recovery in the Netherlands, continued regulation and a greater impact from OTT and Wi-Fi services are putting pressure on revenues. All of this is expected to lead further adjustments by operators in pricing, in an attempt to offset the continued drop in voice revenue.
In the second quarter, only Vodafone increased its market share of service revenues on an annual basis, at the expense of T-Mobile and KPN. T-Mobile was the only operator to grow revenue on a quarterly basis, leading to a sequential improvement in its market share. KPN showed the largest absolute decline in revenues across both periods.
In terms of mobile SIMs (including MVNOs), the Dutch market saw a slight decrease of 0.4 percent annually to 20.3 million at the end of June 2013. As a consequence mobile market penetration decreased from 121.7% at the end of June 2012 to 120.9% this year. KPN’s market lead eroded slightly to 44% of subscribers, while Vodafone saw its market share increase to 30%, and T-Mobile was also up slightly, to around 26%.