A recent study released by market watcher Ovum (News - Alert) reveals that European telecom carriers are struggling to grow. Hence, to offset declining revenue from the traditional fixed voice market, the study indicates that they must broaden their non-voice services.
Ovum’s report indicates that revenue for the European wholesale telecoms market remained steady between 2010 and 2011, despite the economic downturn, intense competition and regulatory actions.
According to Ovum’s report, the European wholesale market was worth $48.4 billion in 2011 – only 0.5 percent less than in 2010.
Based on data from 25 leading wholesalers, Ovum’s annual analysis of the European wholesale market suggests it is a highly concentrated market. In 2011, the top four wholesalers in Europe (BT, Deutsche Telekom (News 
- Alert), FT-Orange and Telefonica) accounted for over 50 percent of total European wholesale revenue, with the top 10 responsible for nearly 75 percent of the total.
Yet, almost all of the leading wholesalers in Europe experienced falling revenue from fixed voice. Some are mitigating the effect of this decline by broadening the attractiveness of their non-voice services.
However, all of them clearly need to do more.
In a statement, commented David James, principal wholesale telecoms analyst at Ovum, “Wholesalers must lessen their dependence on traditional wholesale fixed voice sales by meeting customers’ needs for non-voice services. Many carriers have already expanded their non-voice portfolios by offering emerging new services such as carrier Ethernet, content distribution, and hosting.”
“However,” continued James, “they must do more to attract and retain customers for their wholesale mobile and non-voice services.”
According to Ovum, mobile wholesale is a growing sector in Europe, and offers significant potential for growth based on an increasingly diverse customer base. But it requires a more complete and flexible wholesale portfolio than capacity alone.
The fixed non-voice sector also offers greater opportunities for innovation and differentiation than voice services do, said the analyst.
Ovum found a number of carriers, including Telecom Italia and French altnet SFR (News - Alert), did increase their revenue from other sectors to more than compensate for declines in fixed voice. But it was not the case for BT, the largest wholesaler in Europe by revenue.
As a direct result of falling fixed voice sales, BT saw its wholesale revenue decline in 2011. Only one of the leading players in the wholesale fixed voice sector – Belgacom (News - Alert) – managed to increase its revenue from the sector.
The report shows that all of the players in the wholesale non-voice sector experienced growing income.
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Edited by
Braden Becker
