The drop in mobile service revenues in the Netherlands worsened in the second quarter to an 8.2 percent fall on annual basis, according to Telecompaper’s Dutch Mobile Operators Q2 2014 report. The market continues to feel the effects of the weak economy, driving a shift to cheaper SIM-only offers and low-cost brands. Mobile operators are suffering from lower out-of bundle revenues, as well as regulatory effects and a drop in SMS revenues. Mobile service revenues increased slightly compared to Q1 2014, by 1.4 percent to a total of EUR 1.27 billion.
While Q2 is the stronger seasonal quarter and showed slight quarterly growth of 1.4 percent, the annual drop in service revenue accelerated to 8.2 percent from 7.0 percent a year ago, amid a continued fall in voice revenue and a double-digit drop in SMS revenue. While data services are still growing, the fall-off in SMS in favour of IP applications meant non-voice service revenue grew only 1.7 percent year-on-year in Q2. As voice revenue declines, the share of non-voice in total service revenue rose to 44.8 percent in the quarter. For 2014, Telecompaper expects the Dutch market to show a decline of around 7 percent to EUR 5.0 billion in service revenue.
In terms of overall mobile service revenue performance, mainly Vodafone but also T-Mobile increased their market shares at KPN’s expense in the second quarter. KPN lost the most market share on an annual basis. Vodafone increased its market share annually by 1.1 percent points, and T-Mobile gained 0.8 percent points, while KPN lost 1.7 percent points.
In terms of mobile SIMs (including Tele2, Ziggo and the rest of the MVNOs), the Dutch market was relatively stable. The number of mobile SIMs decreased by 0.4 percent annually to 20.4 million at the end of June 2014. As a consequence mobile market penetration decreased from 122.0 percent in Q2 2013 to 121.1 percent in Q2 2014. For the forecast period, Telecompaper expects the total market to increase to 21.8 million mobile SIMs in 2018 (excluding M2M).
KPN increased its share of SIMs to 48 percent in the second quarter, mainly due to growth at prepaid MVNOs on its network. Vodafone’s share declined to 27 percent, and T-Mobile was relatively stable at 25 percent. Excluding M2M and MVNOs, the market shares look somewhat different, with KPN dropping to 42 percent, and Vodafone and T-Mobile increasing to respectively 32 percent and 26 percent.
