European mobile operators will face a serious challenge in achieving pricing power for LTE data despite a strong take-up of services and wide availability of LTE devices, according to an annual telecom report by Arthur D Little (ADL) and Exane BNP Paribas. The study forecasts a revenue decline of 1.8 percent a year through 2016 for European telecom operators, although the sector could return to growth if LTE smartphones generate data ARPU of EUR 17 a month by 2016. This compares to EUR 7 a month for 3G smartphones today.
Arthur D Little identifies five main levers for operators to improve their outlook, namely new tariff structures, partnerships to develop new services, cost transformation, small cells and Wi-Fi offload, and network sharing. The introduction of shared data plans, which are successful in the US, should be an area of focus, according to ADL's Didier Levy. Exane's Antoine Pradayrol added that mobile challengers with lean structures and large spectrum assets are well placed, as are integrated fixed-mobile operators.
