Mobile Revenue is Slowing in Western Europe, But Why?

There are growing signs that the mobile service provider business is facing a structural slowdown in Western Europe. Researchers at Analysys Mason, for example, say Western Europe's fixed network and mobile service providers now see declining revenue.

Consumers also are allocating a smaller percentage of their incomes to communications services.

Separately, STL Partners reports that the mobile industry’s combined revenues from voice, messaging and data services in the United Kingdom, France, Germany, Spain and Italy will drop by nearly 20 billion Euros, or four percent per year, in the next five years, and by 30 billion Euros by 2020. says.

There is a reason to suspect that use of over the top applications for voice and messaging have something to do with the declines. That is at least partly true.

More than 45 percent of customers with a smart phone use some form of instant messaging  or over-the-top (OTT) messaging app in addition to (and in some cases instead of) traditional text messaging (SMS), according to Analysys Mason. The data was collected from more than 1000 smartphone users in France, Germany, Spain, the United Kingdom and the United States.

In addition, 20 percent of consumers use a VoIP app, and 20 percent of those consumers use it more than traditional voice services.

About 20 percent of the respondents ussed the “WhatsApp Messenger” at some point over the 60 days of usage that were tracked as part of the story.

But it would appear that many users make very light use of over the top voice or messaging, and very few consumers have abandoned carrier voice and messaging completely. Just 1.7 percent  of the panel used IM or OTT messaging without using carrier text messaging at all.

And Analysys Mason says that only 16 percent of all panelists in the study use VoIP apps at all. The perhaps unwelcome implication is not that carrier services are suffering from a shift of demand to rival services, but that a possibly more worrisome trend is developing, namely that people are simply choosing to use mobile services less than they have in the past.