The Dutch mobile services market generated EUR 1.11 billion in revenue in the first quarter of 2016, a drop of 3.0 percent compared to the same quarter last year and a decline of 2.9 percent versus the fourth quarter of 2015. According to Telecompaper's latest quarterly mobile market monitor, the four network providers continued to see some price pressure due to strong competition and lower out-of-bundle revenues. Both T-Mobile and Vodafone experienced a drop in annual mobile service revenues and as such they lost market share. In contrast, KPN showed an annual revenue growth which reinforced its market share. Tele2 also showed growth but remains the smallest player.
Among the four mobile operators, KPN showed a positive performance in Q1 2016 with a 2.3 percent annual mobile service revenue growth and was able to increase its leadership position to a market share of 42.4 percent. In contrast, both T-Mobile and Vodafone showed declining year-on-year revenues with T-Mobile losing the most. The operator saw its revenue decline 9.4 percent, with a market share drop to 21.2 percent. Vodafone’s revenues declined by 5.8 percent, resulting in a market share drop to 33.1 percent in Q1 2016. Newcomer Tele2 saw an increase in service revenues and grew its market share to 3.3 percent in first quarter of this year.
The Dutch mobile network operators combined generated EUR 1.11 billion in revenue in the first quarter of 2016, down 3.0 percent compared to last year and down 2.9 percent compared to the previous quarter. Seasonally the first quarter is weaker than the fourth quarter, but annually the decline slowed down in the last quarters. The strong growth in demand for data services combined with the MNOs’ continued focus on selling postpaid plans with data is helping to stabilise the market and slow the annual decline in revenue. Nevertheless, increasing competition, price pressure and lower out-of-bundle revenues continue to have a negative impact on mobile service revenue.
Including the four operators and the MVNOs, the Dutch market counted a total of 19.9 million SIMs (excluding M2M) at the end of March 2016, a small increase of 0.3 percent year-on-year. The growth came from postpaid, as prepaid declined to 30.5 percent of the total market.
Based on the latest quarterly results and current market conditions, Telecompaper has updated its five-year outlook for the Dutch mobile industry. For 2016, we expect the Dutch market to show a decline of around 2 percent to EUR 4.9 billion in service revenue. For the period 2015-2020, the Dutch market is expected to show a negative CAGR of 0.9 percent, reaching around EUR 4.7 billion in revenues in 2020.
The market forecast is based on the expectation that competition will further intensify and that growth in data revenues will not fully compensate for the drop in voice and SMS. Other negative factors include regulation, transparency of phone cost, bundling mobile with fixed offers and the increasing use of OTT.
Mobile data traffic is estimated to have grown annually by double digits in Q1 2016, states the Dutch Mobile Operators report. However, operators continue to struggle to translate this demand into higher prices and revenues, and the strong competition does not leave a lot of room for manoeuvre.
