The Dutch mobile sector saw service revenues fall 3.8 percent year-on-year in 2011 to EUR 6.07 billion, due mainly to the strong decline in voice revenue on the back of regulatory price cuts, competitive pressure and the difficult economic climate, according to Telecompaper’s quarterly report on the mobile market. The drop in revenues accelerated from an annual decline of 0.4 percent in 2010.
SMS revenues fell for the first time, as consumers adopted new IM applications. While non-voice services (SMS and data) now contribute over 36.5 percent of total service revenue, the strong demand for data services was not enough to return the market to growth during the year.
In the seasonally weak fourth quarter, mobile service revenue decreased 2.7 percent from the year earlier to EUR 1.52 billion and fell by 0.7 percent compared to Q3. The figures were skewed somewhat by T-Mobile’s release of deferred revenue in Q4, as a result of canceling the unlimited rollover of voice minutes on all contracts.
For 2012, Telecompaper expects the Dutch market to show a slight decline of 0.5-1.0 percent to around EUR 6.0 billion in service revenue. For the period 2012-2016, the market is expected to show a CAGR of 0.7 percent, reaching around EUR 6.3 billion in revenue in 2016. Further regulatory cuts to mobile termination and roaming rates, as well as the expected approval of net neutrality legislation in the Netherlands, will have an important effect on operator revenues in the coming period. Besides regulation, the shift to a more data-centric customer behaviour is affecting revenues, with operators forced to make changes in their tariff pricing in order to counteract the continuous drop in voice revenues and declining use of SMS, Telecompaper said.
Looking at the performance of the three mobile network operators, only Vodafone Netherlands was able to post annual revenue growth last year, of 1.3 percent. In contrast, T-Mobile Netherlands showed a drop in total service revenue of 2.8 percent (including deferred revenues in Q4 2011), and KPN’s revenues fell by 7.4 percent.
In terms of mobile SIMs, the Dutch market saw an increase of 4.2 percent annually to just under 21 million lines at the end of 2011, mainly due to the postpaid base increasing. As a consequence mobile penetration increased to 125.0 percent in Q4 from 120.4 percent the year before. KPN saw its market leader position erode slightly to 47 percent of all subscribers, while Vodafone NL and T-Mobile NL increased their market shares to 28 percent and 25 percent respectively, thanks to strong postpaid subscriber growth.
