Mature connectivity services markets are very nearly zero-sum games. What one contestant gains is almost directly offset by losses incurred by some rival. Until recently, suppliers could count on rapid account and usage growth in core markets in much of the developing world.
At some point, with slowing growth rates, growth strategies must switch from gaining new accounts to selling additional products for the same accounts, expanding out of region or taking market share from other contestants.
One revenue component distinguishes mobile from fixed network revenue streams in the U.S. market: video entertainment. In 2017, voice communications was 11.8 percent of fixed segment industry revenues. Internet access services contributed 28 percent. Video entertainment revenues represented 27 percent.
That same year, video entertainment represented zero percent of mobile segment revenues.
Note also that 33 percent of fixed network segment revenues consisted of private network services, customer premises equipment, internet telephony and all other services.
In the mobility segment, telephony represented 33.5 percent of revenues. Internet access accounted for another 37 percent of segment revenue. Other revenue sources contributed 29 percent, perhaps largely fueled by phone sales.
The bigger problem for service providers is the collapse of revenue per consumer account. Between 2003 and 2013 alone, ARPA declined 69 percent, according to Rob Van Den Dam,
IBM Institute for Business Value global telecommunications industry leader.
Other studies confirm the trend of lower average revenue per user. Of course, lower revenue per account is equally important, which is what the IBM figures likely point to.
But slow revenue growth in most global markets is another key issue, compounded in many markets by saturated customer upside. At some point, every prospect who wants to buy and use services has done so.
Battles for market share then are characteristic of mature markets.
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