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Dutch mobile market suffers 9% fall in service revenues in Q1

Houten, The Netherlands, 05 June 2014 - The decline in mobile service revenues in the Netherlands accelerated to 9.0 percent on an annual basis in the first quarter of 2014, as the market suffers from the weak economy, regulatory effects and the sharp drop in SMS use. According to Telecompaper's quarterly mobile market monitor, mobile service revenues were down 3.4 percent compared to the fourth quarter of 2013, to a total EUR 1.25 billion.

While Q1 is seasonally weak, the annual drop in service revenue accelerated to 9.0 percent from 5.8 percent a year ago, amid a continued fall in voice revenue and a double-digit drop in SMS revenue. While data services are still growing, the fall-off in SMS in favour of IP applications meant non-voice service revenue grew only 2.3 percent year-on-year in Q1. As voice revenue declines, the share of non-voice in total service revenue rose to 44.8 percent in the quarter.

Among the three mobile operators, mainly T-Mobile but also Vodafone increased their shares of the market's service revenues in Q1, as KPN lost the most revenues both on an annual and quarterly basis. T-Mobile increased its market share annually by 2.1 percent points, and Vodafone added 0.4 percent, while KPN lost 2.5 percent points.

"The weak economic climate in the Netherlands is making consumers focus more on costs. While 'no-frills' MVNOs may be profiting from this, the three network operators are finding it difficult to respond, as their revenues are already under pressure from regulation and the widespread use of messaging apps," said Alejandra van de Roer, Senior Research Analyst and author Telecompaper's Dutch Mobile Operators report. "The hope is that by quickly expanding LTE coverage they will be able to accelerate the growth in data services and encourage consumers to upgrade to bigger data plans."

The report shows that KPN is still the largest in terms of customer numbers, with 48 percent of all Sims at the end of March 2014, mainly due to growth in prepaid at MVNOs hosted on its network. Vodafone's share of customers declined to 27 percent, while T-Mobile was relatively stable at 25 percent. Excluding M2M and MVNOs, the market shares look somewhat different, with KPN dropping to 41 percent, while Vodafone and T-Mobile increased to respectively 32 percent and 27 percent of all Sims.

In total, the Dutch mobile market (including Tele2, Ziggo and the rest of the MVNOs) saw a slight decrease of 1.3 percent annually to 20.3 million Sims at the end of March 2014. As a consequence mobile market penetration decreased from 122.5 percent in Q1 2013 to 120.4 percent in Q1 2014. Telecompaper expects the total market to return to growth by the end of 2014 and increase to 22.6 million mobile SIMs in 2018 (excluding M2M).

The report Dutch Mobile Operators Q1 2014 is based on Telecompaper's continuous research into developments in the Dutch communication services market and looks at Dutch mobile network operators KPN, Vodafone and T-Mobile, as well as Tele2, Ziggo, UPC and other MVNOs. It analyses Q1 2014 results, both revenue and subscribers, and compares the findings with results in the fourth quarter 2013 and first quarter 2013. A breakdown of postpaid/prepaid and voice/non-voice revenues for each operator is included. The report also provides a five-year forecast for revenues and subscribers on the Dutch market. Single-user price for the report is EUR 495. More information can be found on our website.
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  Alejandra van de Roer
  +31 30 6349600
  alejandra@telecompaper.com
  www.telecompaper.com
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