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Summary

In 2014–15 non-voice revenues offset the losses in voice revenues, according to Ovum’s latest annual analysis of the size and make-up of the European wholesale market. In the report European Wholesale Market Share 2014–15: The Big Picture, we reveal that for the first time increased revenues from wholesaling capacity, access, and data services more than compensated for the continuing downward slide of revenues from wholesale carriage of voice traffic.

European wholesalers are winning the battle against the commoditization of voice

Ovum’s latest annual analysis of the European wholesale market shows that revenues totaled €40.5bn ($44.9bn) in 2015, up 1.3% from the 2014 figure of €40.0bn.

European revenues from wholesaling voice services continued to decline in the face of intense competition from traditional and OTT players. Almost all of the major wholesalers in Europe experienced the negative effects of the commoditization of voice services. However, 2014–15 was the first period in which there was sufficient growth in revenues from wholesaling non-voice to overcome the fall in voice services revenue, providing a signpost for the future growth of the European wholesale market.

Between 2014 and 2015 the value of the wholesale fixed non-voice sector grew by 6.6% to reach 64% of total European wholesale revenue. In the same period, revenues from the wholesale fixed voice sector fell by 4.7%, to become 28% of the total European wholesale market. Revenues from wholesaling mobile services to mobile virtual network operators, mobile virtual network aggregators, and mobile virtual network enablers (MVNO, MVNAs, and MVNEs) declined to 8% of the total because of these wholesale customers’ comparatively high dependence on voice traffic.

This is positive news for Europe’s wholesalers and especially for the same five national incumbents (BT, Deutsche Telekom, Orange, Telecom Italia, and Telefonica) that continue to dominate the market. All five of these companies have seen the proportion of their revenue from fixed voice continue to decline and the proportion of their revenue from non-voice increase. They all now earn substantially more from the fixed non-voice sector than from the fixed voice sector.

BT retained its leadership position in the European wholesale market with a 16% share in 2015. It also earned a higher proportion of its total sales (27%) from wholesale services sold within Europe than any other incumbent, although the other large incumbents all also earn revenues from wholesaling their mobile services.

Appendix

Further reading

European Wholesale Market Share 2014–15: The Big Picture, TE0012-000572 (June 2016)

European Wholesale Market Share 2014–15: The Detail, TE0012-000573 (June 2016)

Author

David James, Practice Leader, Wholesale Telecoms

david.james@ovum.com

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