Since mobile services now represent at least 75 percent of total industry service revenues, what happens in the mobility segment arguably drives overall revenue performance these days. But what happens in the fixed networks segment also matters, as fixed networks still represent about a quarter of industry revenues.
MTN Consulting says that service provider revenues declined about six percent in the third quarter of 2022, after a similar six-percent decline in revenues in the third quarter of 2021, “largely due to weak service revenues.”
Recurring service revenue in the third quarter of 2022 actually dropped about seven percent, while equipment revenues grew two percent (largely mobile device sales). But services account for nearly 90 percent of total revenues.
Nor are the quarterly figures unusual. And there is a major nuance to consider when looking at revenue growth. As global mobile subscriptions have added billions of new accounts, total global revenue has grown modestly.
But discrete service providers in many markets have actually seen negative revenue growth rates. The trend also is complicated because fixed network revenue growth became negative as early as 1990, as competition ate away at profit margins and gross revenue. The counterbalance has been the growth of newer sources such as mobile phone service and home broadband. In the U.S. market, the trend has been pronounced.
Looking at all fixed and mobile services, global growth probably will average up to two percent annually for the foreseeable future. Given the challenges in the fixed networks segment, it is reasonable to argue that overall revenue growth will be driven by the mobile segment.
No comments:
Post a Comment