Thursday, May 24, 2012

Will European Telcos Lose 20 Percent of Revenue, 40 Percent of Earnings by 2020?

Many large service providers could face excruciating revenue pressures over the next decade.

By 2020, for example, European telcos could see their sales fall by up to 20 percent, while; earnings (EBITDA) could even drop by 40 percent, according to an analysis by Roland Berger Strategy Consultants 

Change of that sort might lead to relatively shocking changes for many service providers, including separation of retail and wholesale units or a switch to “wholesale-only” operations.

To respond, telcos must reduce operating costs, adopt new, sales and service models and tap growth markets, Roland Berger says.

The study suggests European telcos will have to invest up to EUR 600 billion, mostly for optical fiber and Long Term Evolution fourth generation mobile networks, says Alexander Dahlke, Partner at Roland Berger Strategy Consultants.

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