Mobile Operators in Western Europe See Earnings Erosion, Opex Increases in 4Q 2010

Mobile operators in Western Europe recorded further revenue losses and earnings (earnings before interest, taxes, depreciation and amortization) erosion in the fourth quarter of 2010, according to new research from Strategy Analytics. Gains those operators had made in operating expenditures in the first half of 2010 were reversed by year-end.

Looking at financial data from 200 mobile operators serving over 77 percent of global subscribers, Strategy Analytics found found that mobile service revenues fell by 1.3 percent in the fourth quarter of 2010 in Western Europe. Meanwhile, mobile operators worldwide saw revenue grew by 6.1 percent.

“This weak performance is less about the after-shocks of the global recession and more about the changing data-centric market environment," Strategy Analytics says.

Subsidies associated with smartphone sales and upgrades, and the relentless growth in data traffic from these devices, reversed the long-term trend of falling operating expenses per subscriber,” said Phil Kendall, Director, Wireless Operator Strategies. “For example, the average cost to retain a customer has increased for T-Mobile in several countries: Germany (26 percent), Austria (57 percent) and the Netherlands (12 percent). Orange customer retention costs have increased in France (11 percent) and Spain (14 percent)."

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