Skip to main content

Top 10 Mobile Operators Achieve $202 Billion Profit

Worldwide mobile service provider revenue, year-on-year (YoY) for 4Q-2012 grew 2.8 percent reaching $240.5 billion. According to the latest market study by ABI Research, the regional dynamic is varied.

Western Europe and Africa’s mobile operator actually demonstrated a contraction in service revenue YoY of 8.2 percent and 6.9 percent, respectively. Middle East, Latin America, and Asia-Pacific are still showing reasonably robust rates of growth of 7 percent to 11 percent.

Eastern Europe and North America, however, are only barely keeping their mobile service revenue growth in positive territory.

"As the underlying lift from accumulating subscribers has matured, carriers are starting to cast around for additional revenue streams that don’t just boost revenues but also profitability,” said Jake Saunders, VP for core forecasting at ABI Research.

There is still tremendous income to be generated from mobile network services. ABI estimates that the top ten mobile carriers alone generated $202 billion in gross profit, that's up by 4.2 percent year-on-year in 2012.

For some of those in the top ten, subscriber growth is still a major contribution (e.g. China Mobile, is 1st; MTN is 6th; and China Telecom, 8th). These mobile service providers may rely on expanding subscriber bases to drive overall profit for another 3 to 5 years. But after that, they will need to tap other sources of revenue.

For the other carriers in the top ten, securing a significant market share in their domestic or regional markets, combined with pooling infrastructure resources such as data centers, as well as group-level handset and equipment purchasing, has led to economies of scale.

Verizon Wireless (2nd), Vodafone Group (3rd), AT&T (4th), and NTT DoCoMo (5th) do hold significant market shares, but this does not entirely explain their success.

These companies have aggressively hopped onto the fourth innovation wave shaping the mobile telecommunications industry -- namely, IP-based value-added services.

OTT players can potentially sap the revenue opportunities for incumbent mobile telecom players but carriers, such as Verizon and AT&T, are showing that it's possible to put ARPU back on an upwards trajectory through the introduction of, for example, multi-device tariffs and M2M services.

Popular posts from this blog

Telecom and Cable Strategic Growth Trends

Telecom and pay TV providers are entering a period where traditional connectivity revenue is growing at well under 2 percent a year worldwide, even as traffic volumes, quality expectations, and competitive pressures continue to rise. This widening gap between flat service revenues and escalating investment needs is the central strategic challenge now confronting network operators, tech vendors, and investors across the communications value chain. This transitional environment forces service providers to pivot from "grow by adding lines" to "grow by monetizing experiences, insights, and ecosystems." Enterprise digital transformation, 5G, fiber, and cloud computing are all necessary enablers, but none of them automatically translate into higher ARPU or margin; they need to be coupled with new value propositions and operating models. Telecom and Cable Market Development According to the latest IDC market study, worldwide spending on telecom and pay TV services is expec...