Saturated markets tend to mean slim revenue growth, and that is what the European mobile industry now faces, according to the GSMA. The good news is that the industry has halted its revenue slide. The bad news is that revenue growth will occur at less than one percent per year to 2020, though recurring service revenues will grow slightly faster.
Most observers would say that is an environment that will encourage consolidation in region, and also encourage investment outside of region, where markets are not yet saturated.
Profit margins have been affected by competition, regulation and revenue declines, as well. Margins have fallen by around nine percentage points between 2009 and 2014.
“Cash flow margins remain well below their historic averages and may raise questions over the industry’s ability to finance the next wave of investment around 5G,” GSMA says.
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