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Consolidation is the Solution for Challenges Faced by Telecom Operators Finds Frost & Sullivan - The mobile and wireless industry in Europe is facing the crisis of lowered average revenues per user (ARPU) and reduced funds for implementing next-generation networks
Consolidation is the Solution for Challenges Faced by Telecom Operators Finds Frost & Sullivan

 

NewswireToday - /newswire/ - London, United Kingdom, 2011/03/24 - The mobile and wireless industry in Europe is facing the crisis of lowered average revenues per user (ARPU) and reduced funds for implementing next-generation networks.

   
 
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This is motivating mobile operators to investigate new opportunities to retain their subscribers and revenue market shares. One of the recent trends emerging in the saturated mobile and wireless markets in Europe, according to the Frost & Sullivan analysis, is consolidation among telecom operators.

"Intensifying competition from new participants has resulted in incumbents devising innovative pricing plans to improve both data and voice ARPU," notes Frost & Sullivan Research Associate Jayashree Rajagopal, author of the report on Globalisation and Consolidation of the Telecom Industry: Mobile and Wireless Perspective. "Post-paid customers are poised to play an important role since they are the major revenue contributors."

Promisingly, the number of prepaid customers has been increasing rapidly. In order to retain existing customers and attract new users, it has become necessary to design novel pricing plans that would boost revenues, while also satisfying consumers.

Next-generation technologies are being developed and tested in order to cater to the need for enhanced speed and capacity. A number of services and applications are increasing the use of mobile phones in areas such as healthcare and banking industries in order to improve their efficiency and effectiveness. These services would require better quality of service and capacity.

"However, new participants are not in a position to invest in next generation infrastructure," cautions Rajagopal. "As a result, they may have to merge with other prominent market players who have the necessary funds to deploy next generation infrastructure." Certain mobile virtual network operators (MVNOs) that become bankrupt due to the existing competition typically opt to merge with other major telecom participants.

Telecom operators are offering flat-rate plans and other provisions at lower prices to attract customers and augment market share in terms of number of customers. At the same time, with the increase in the use of data services, telecom companies are offering better services to boost data ARPU.

The entry of new participants in the telecom market has resulted in significant price wars. To gain market share, entrants reduce tariffs, resulting in the lowering of ARPU. This intense competition has widened the number of options available for consumers, sparking a trend of huge churn rates. Thus, retention of customers has become the most important challenge for telecom operators

Attracting new subscribers while retaining existing market share with respect to both subscribers and revenues will be critical to success. In order to improve the scale of operation in the countries in which they are operating, many major telecom participants have been looking at merging with smaller competitors.

"Strategic mergers and planned acquisitions will definitely help the partnering telecom operators to address the various challenges together," advises Rajagopal. "With innovation being the key for developing applications and services, these partnerships should also focus on incorporating innovation into their services to gain revenues in the saturated telecom markets."

If you are interested in more information on this study, please send an email to with your complete contact details to Joanna Lewandowska, Corporate Communications, at joanna.lewandowska[.]frost.com.

Globalisation and Consolidation of the Telecom Industry: Mobile and Wireless Perspective is part of the Mobile & Wireless Communications Growth Partnership Services programme, which also includes research in the following markets: Mobile Communications Markets in Western Europe - The Perspective of Operators, Fixed-Mobile Service Convergence - The One-Stop Shop Telco and The Rise of Tablets in the Mobile Communications Market. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

About Frost & Sullivan
Frost & Sullivan (frost.com), the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents. To join our Growth Partnership, please visit frost.com

Globalisation and Consolidation of the Telecom Industry: Mobile and Wireless Perspective / M661-63

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Consolidation is the Solution for Challenges Faced by Telecom Operators Finds Frost & Sullivan

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