I read the article on the Expansion newspaper, but you don’t need to go into it: the title says it all.
Telecommunications Companies have lost one third of their revenues in the last ten years
And the subtitle points out that these losses are in spite of a 50% surge in broadband connections and an 8% increase in number of wireless lines.
The article is about the Spanish market but the situation is much similar in several other mature markets in Western Europe.
According to the last Ericsson report with data from the 2020 Q3 period the amount of traffic on mobile network has grown by 50% in the previous 12 months (on the fixed network it grew even more, courtesy of the teleworking forced by the pandemic).
If you look at the graphic you see the global growth of data traffic (the voice traffic is stable and it is a small percentage of the data traffic, also considering that a growing portion of the voice traffic is part of the data traffic) over the last 7 years. An increase of 20 times over that period.
Yet, Telcos revenues have decreased and to put the cherry on the cake, Telcos have been investing quite a lot of money in the same period to deploy 4G, thus providing more capacity and much better experience to their customers.
In any other sector if you say:
- products are getting better and better
- companies are investing more and more money to increase the offer quantity and quality
- sale volume is increasing
- usage is skyrocketing
you would expect to see a matching revenue increase! Yet, that is not so in the Telecom market. Don’t expect this trend to change because of 5G, actually it might get worse as potentially new players (in the private 5G area) may further erode the Telcos market.