Global Mobile Revenue Will Begin Decline in 2018

In 2018, for the first time ever, global mobile service provider revenue will drop, declining from 2017 levels by 1 percent or $7.8 billion, according to analysts at Ovum, though the number of connections will continue to grow.

Global mobile connections will grow from 6.5 billion in 2012 to reach 8.1 billion by 2018, while annual mobile service revenues will rise from $968 billion to $1.1 trillion.

Decline already is happening in Western Europe, with total revenue dropping 1.5 percent on a compound annual rate and connections growing less than 1 percent.

The U.S. market, robust and growing, will slow. Global connections still will grow, at a less than 4 percent compound annual growth rate between 2012 and 2018, while global revenues will grow at less than half that rate. 


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Africa, on the other hand, presents the largest growth opportunity, revenues expected to grow at a compound annual growth rate of 4.2 percent.

Since mobility services have driven global service provider revenue growth for at least a decade, current efforts to discover new sources of revenue obviously are required. The forecast assumes that the current growth driver, mobile Internet access, will saturate by about 2018.

“What drives revenue next?” is a question with no accepted answer, which is why so many initiatives are underway, ranging from mobile commerce and mobile payments to connected car, mobile video, home security, home automation, mobile advertising and other potential new sources of revenue.  

One reason you are hearing so much about the Internet of Things, or machine-to-machine services, is that selling mobile connections to enterprises selling services using sensor networks is one obvious way to tap new customers and activate millions of new accounts.

According to Ovum, operators in developed markets face particularly challenging times. Aside from troubles in Western Europe, several other developed markets will see year-on-year revenue declines in 2018, including the United States, Ovum maintains.

Much of the revenue decline will be driven by falling average revenue per user, which will continue to decline across all markets by a 2.7 percent global CAGR between 2012 and 2018.

If you want to know why tier one service providers are so focused on new revenue sources, the Ovum data is one compelling reason.