The Dutch mobile services market lost 1.9 percent revenue in the second quarter of 2017, reaching 1.14 billion euros. Revenue decline in Q2 accelerated compared to the first quarter of this year. Normally, the April-June period results in higher sales than January-March. This year, however, there is no growth quarter-on-quarter, as evidenced by the new quarterly report Dutch Mobile Operators of Telecompaper.Operators point to price pressure, solid competition and the influence of regulation (such as roaming) as causes. Tele2 was the best performing mobile operator, Vodafone the biggest loser.
Of the four mobile operators with their own network (MNOs), Tele2 scored the best figures: 43 percent quarter-on-year growth. The relative newcomer remains the smallest of the four MNOs, but increased its market share to just over 5 percent in Q2 2017. KPN remained stable and expanded its market leadership to 43.2 percent.
T-Mobile recorded a small sales decline (-1.3%) and remained relatively stable at 21.2 percent in market share. Vodafone, which now also measures the mobile revenue of merger partner Ziggo, nevertheless managed to process a strong sales decline of 9.6 percent. This led to the only loss of market share among the four MNOs, to 30.5 percent.
Against no recovery sales in Q2
For Q2, Q2 did not show any traditional growth in mobile sales compared with the first quarter. There was even a fall of 0.8 percent over Q1. Price pressure and competition were identified as general causes. More specifically, there was a negative impact of:
Less outside-the-bundle sales.
Regulation such as the recent reduction of the maximum roaming rates in the EU.
Changing consumer behavior.
Discounts on mobile with bundled offers.
The impact of regulation – the abolition of retail roaming tariffs in the EU as of June 15, 2017 – will continue to affect the coming time. In addition, the further reduction of MTR (mobile termination charges) will continue to play the next three years.
Turnover continues to decline: 4.4 billion euros in 2021
Based on the previous quarter results and current market influences, Telecompaper has adjusted its expectations for the next five years. Mobile sales in the Netherlands are expected to shrink by about 3 percent to around 4.6 billion euros this year.
The market research firm expects market light to continue shrinking in 2017-2021, with a negative average annual growth rate (CAGR) of 1.4 percent. By 2021, mobile sales will reach around € 4.4 billion.
Telecompaper bases this prediction on the expectation that competition will intensify further. The merger between Vodafone and Ziggo does not lead to less mobile operators. There are four MNO’s actions, a stagnant market.
Other important negative factors for the coming years are:
Regulation – with the new published MTR rates (mobile termination rates) of ACM Supervisor – and abolition of roaming.
The transparency of mobile costs for customers.
The pressure on ARPU (average revenue per user) due to the combination of mobile services with fixed services.
“Mobile data traffic continues to grow with double digits, even with a slight acceleration in the last quarter,” says research analyst Alejandra van de Roer, author of the Dutch Mobile Operators report. “Operators are struggling with the translation of demand for data services at higher rates and conversion. Strong competition and focus on multi-play packages also leave little maneuvering space here. ”
Mobile penetration to almost 120 percent
Not only data volume is growing. The Dutch mobile services market – MNOs and MVNOs together – had the end of second quarter of this year, a size of 20.4 million SIM cards (excluding M2M / IoT sim cards), which is 1.9 percent higher than in the second quarter of 2016.
This slight growth was entirely due to postpaid subscriptions, as the prepaid segment decreased to 28.1 percent of the total market. Mobile penetration rose slightly, to 119.3 percent. Telecompaper expects the market to grow by approximately 0.7-0.8 million SIM cards over the next five years, to approximately 21.1 million in 2021 (excluding M2M).