AMSTERDAM: The mobile operators in the Netherlands generated EUR 1.2 billion in service revenue in the second quarter of 2016, a decline of 5.6 percent year-on-year, according to the latest research by Telecompaper. After the weaker-than-expected first half of 2016, Telecompaper has downgraded its market outlook for the full year.
Telecompaper’s ‘Dutch Mobile Operators Q2 2016’ report shows that of the four mobile operators, T-Mobile performed the worst in terms of revenues, with service revenue falling over 10 percent year-on-year. As a result, its market share dropped to just over 21 percent in Q2 2016. KPN did better than the overall market, with service revenue down just 3.9 percent, helping to strengthen its market lead with a share of over 42 percent. Vodafone also showed a decline in revenues (-5.5%), while its market share was stable at just over 33 percent. Newcomer Tele2 continued to grow its service revenues and increased its market share to 3.5 percent in the second quarter.
Seasonally the second quarter is usually stronger than the first, but this year the market showed no growth on a quarterly basis. The annual drop in service revenue even accelerated compared to Q1, with most operators pointing to price pressure and tough competition. Lower out-of-bundle revenues, regulation such as the latest cuts to EU roaming prices from the end of April, and changes to customer behaviour such as migration to IP messaging services continue to have a negative impact on mobile service revenue.
Based on the weaker-than-expected first half of 2016, Telecompaper has downgraded its five-year outlook for the Dutch mobile industry. For 2016, we expect the Dutch market to show a decline of around 4 percent to EUR 4.7 billion in service revenue. For the period 2015-2020, the market is expected now to show a CAGR of -1.5 percent, reaching around EUR 4.6 billion in annual revenues in 2020.
The market forecast is based on the expectation that competition will further intensify and that growth in data revenues will not compensate fully for the drop in voice and SMS. Other negative factors include regulation, transparency of phone cost, bundling mobile with fixed offers and the increasing use of OTT services.
Mobile data traffic continues to grow in double digits, but appears to be slowing somewhat, concludes Telecompaper’s Dutch Mobile Operators report. Operators are also struggling to translate the demand for data services into higher prices and revenues, and the strong competition does not leave a lot of room for manoeuvre.
Including the four operators and the MVNOs, the Dutch market counted in total 20.1 million SIMs (excluding M2M) at the end of June 2016. This is equal to an annual increase of 1.3 percent and quarterly growth of 0.7 percent. The growth is coming from more postpaid subscribers, as prepaid users fell to 30.2 percent of the total market in Q2 2016.
