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Dutch mobile market slows revenue decline in 2015

Dutch mobile market slows revenue decline in 2015

The contraction in the Dutch mobile services industry, which gained a fourth operator in Tele2 in 2015, slowed to 3.3 percent last year, for total revenues of EUR 4.9 billion. The rate of decline more than halved compared to 7.5 percent in 2014. According to Telecompaper’s latest quarterly Dutch Mobile Operators report, the four network providers continued to see price pressure due to strong competition, lower out-of-bundle revenues, changes in customer behaviour and regulatory effects from lower roaming rates. T-Mobile experienced the biggest drop in annual mobile service revenue and as such lost the most market share. In contrast, KPN and Vodafone showed relatively stable revenues, while Tele2 reached a small market share.

Only Vodafone and Tele2 showed some growth in mobile service revenues. Vodafone’s revenue grew by 0.2 percent, helping strengthen its second place on the market with a 33.6 percent share. KPN lost only 0.6 percent and was able to increase its leadership position to 41.1 percent. In contrast, T-Mobile lost 14.3 percent in 2015, and its share dropped to 21.9 percent. Newcomer Tele2 obtained 3.4 percent of the total mobile service revenue in full year 2015. 

Dutch mobile service revenues (KPN, Vodafone, T-Mobile, Tele2)

The slower decline in total market revenues was due to a reduced impact from regulatory price cuts and accelerating growth in data traffic and related revenues, which is helping to compensate more for the drop in voice and SMS revenues. In the fourth quarter, which is seasonally weaker than the third quarter, mobile service revenue still decreased 5.5 percent year-on-year to EUR 1.2 billion. T-Mobile again showed the biggest drop in revenues. 

Based on the latest quarterly results and current market conditions, Telecompaper has updated and extended its five-year outlook for the Dutch mobile industry. For 2016, we expect the Dutch market to show a decline of around 1.5 percent to EUR 4.9 billion in service revenue. For the period 2015-2020, the Dutch market is expected to show a negative CAGR of 0.7 percent, reaching around EUR 4.8 billion in revenues in 2020. 

The market forecast is based on the expectation that competition will further intensify with four operators and that growth in data revenues will not compensate fully for the drop in voice. Other negative factors include the impact of regulation, with the pending abolishment of roaming charges in the EU, and the increasing use of OTT and Wi-Fi services.

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