The rest of the drop in revenue in 2014 was due to tough competition, lower out-of-bundle revenues and changes in customer behaviour, as the growing use of messaging and VoIP apps led to a continued decline in voice and SMS revenues. Data revenues showed only modest growth, despite a near doubling in mobile data traffic, driven by the growing number of 4G users.
In the fourth quarter, the annual drop in service revenues slowed to 2.7 percent. Compared to the third quarter, which is seasonally stronger, service revenues were down 0.5 percent in Q4 2014 to EUR 1.26 billion.
In 2014, the operators continued to focus on selling postpaid plans with data subscriptions, taking postpaid to almost two-thirds of all mobile SIMs on the market. However, this strategy could not halt the drop in voice and SMS revenue. In 2014, voice revenues fell 12.6 percent year-on-year, and SMS revenue showed an even stronger double-digit drop. While data services are still growing, the fall-off in SMS in favour of IP applications meant non-voice service revenue grew only 1.9 percent in 2014. As voice revenue declines, the share of non-voice in total service revenue rose to 45 percent in 2014.
All three operators reported lower services revenues in 2014. Vodafone showed the smallest decline, leading to an increase in its share of service revenues to almost 33 percent in 2014. This came largely at the expense of KPN, which showed the biggest decline and reached a market share of just over 42 percent of service revenues. T-Mobile remained third, but was able to increase its market share slightly to almost 25 percent.
Including the MVNOs, the Dutch market counted 20.6 million SIMs at the end of 2014, a small increase of 0.3 percent during the year. Telecompaper expects the market to grow by around 1 million SIMs in the coming five years, to around 21.6 million in 2019 (excluding M2M).
For 2015, the market researcher expects the Dutch market to show a smaller decline than last year, of around 4.4 percent to EUR 4.8 billion in service revenue. For the period 2014-2019, the Dutch market is expected to show a negative CAGR of 1.6 percent, reaching around EUR 4.6 billion in revenues in 2019.
The market forecast is based on the expectation that competition will further intensify, with the arrival of Tele2 as network operator, the merger of UPC and Ziggo and new MVNOs. Growth in data revenues will not compensate fully for the drop in voice revenue. Other negative factors include the impact of the continued weak economy, which is curbing consumer spending, and the increasing use of OTT and Wi-Fi services.
