Will Global Telecom Revenue in 2019 be Higher or Lower than in 2011?

Historically, global telecom revenue, with a few minor and temporary dips, has gone in just one direction: up. Given growth in developing regions such as India and China, a reasonable person might argue that the trend will remain in place, despite potential stresses in some regions.


Many observers still believe that is the most likely outcome, between now and 2020. Still, 
we are entering a period of unprecedented revenue uncertainty in regulated services, argues Alan Quayle. 


And that uncertainty seems to be causing a divergence of views about overall industry revenue. 


Surveying industry participants about what they expected, in terms of revenue sources and volumes between now and  2019, optimists expected revenue growth between one percent and 1.75 percent, with mobile and fixed data driving the bulk of the growth, while mobile voice remaining flat and fixed voice declining. That easily would pass for today's conventional wisdom. 


Optimists expect total regulated revenue of $1.6 trillion in 2019, a relatively sanguine outcome in a business with lots of challenges. 
                                                            
But there are pessimists who expect a flat revenue environment through about 2014, while others think revenues could decline by 2019 by about two percent, yielding annual global revenue of about $1.4 trillion. 


In either scenario, though, new and unregulated services are critical for future revenue growth. 


Unregulated revenue, in either the optimistic or pessimistic scenario, could be key. Quayle estimates that unregulated businesses will have three percent to six percent annual growth rates over the near term. 


On the other hand, mobile data will grow faster, at a six percent to nine percent range. Fixed network data revenues will grow at three to four percent annual rates in the near term. 


Mobile voice will be flat to up by about two percent annually, while landline voice will continue to contract at negative five percent annually to seven percent annually, over the next couple of years. 

Though the possibility of recessions in some regions is one source of uncertainty, there are structural trends of more importance. Over the top messaging will create revenue pressure for mobile service providers. 

For fixed network providers, mobile broadband increasingly will become a viable alternative to fixed network broadband, especially in market segments such as young singles, Quayle argues.

Long Term Evolution and family data plans are expected to accelerate this trend.

Market saturation and aggressive price competition from non-incumbent service providers will create pressure as well, especially in the mobile segments of the business. For fixed network providers, facing losses of voice accounts, the issue is not so much competition as shrinking demand. 

On the other hand, even in regions such as Western Europe that seem to face more pressure in mobile voice and messaging, much could hinge on service provider moves in the retail packaging area. One should not discount packaging innovations that boost revenue, though it might be reasonable to worry about profit margin on that higher gross revenue.