Western Europe telecoms market: trends and forecasts 2020–2025

Western Europe telecoms market: trends and forecasts 2020–2025

Western Europe telecoms

market: trends and forecasts

2020–2025

Julia Martusewicz-Kulinska, Charlie Westphal, Felix Hall,

Olamide Makinde, Qingyi Liang, Rémy Giraud, Michelle Lam,

and Noor Mohammed Khan

February 2021, based on data up to 3Q 2020


Analysys Mason provides detailed 5-year forecasts of the fixed

and mobile telecoms market in Western Europe. Our

forecasts take into consideration the likely range of economic

impacts that the COVID-19 pandemic may have on operators’

telecoms service revenue worldwide.1

This report focuses on operators’ core telecoms services. It

includes discussion of IoT, pay-TV and operator business services.

These services are discussed in detail in our other research

programmes.

Our forecasts are informed by on-the-ground, regional market

experts from our topic-led research programmes and our

consulting division, as well as external interviews. In addition to

our robust set of historical data, our forecasts draw on a unique

and in-house modelling tool, which applies a rigorous procedure

(reconciling different sources, standard definitions, top-down and

bottom-up modelling).

2

About this report

1 More details about the COVID-19 forecast can be found in Analysys Mason’s COVID-19 scenarios for telecoms operator service

revenue: worldwide forecasts 2019–2024. 2 Includes USB modem, and mid- and large-screen, but not handset-based data. 3 IoT

connections and revenue figures include mobile services only. 4 Service revenue is the sum of retail and wholesale revenue.

REPORT COVERAGE

Geographical Key performance indicators (around 350)

Region modelled

▪ Western Europe

(WE)

Countries modelled

individually

▪ Austria

▪ Belgium

▪ Denmark

▪ Finland

▪ France

▪ Germany

▪ Greece

▪ Ireland

▪ Italy

▪ Netherlands

▪ Norway

▪ Portugal

▪ Spain

▪ Sweden

▪ Switzerland

▪ UK

Connections Revenue/ARPU/ASPU

Mobile

▪ Handset, mobile

broadband,2 IoT3

▪ Prepaid, contract

▪ 2G, 3G, 4G, 5G

▪ Smartphone,

non-smartphone

Fixed

▪ Voice, broadband

▪ Narrowband voice,

VoBB

▪ DSL, FTTP/B, cable,

FWA, 5G, other

Pay TV

Mobile

▪ Service,4 retail,

wholesale

▪ Handset, mobile

broadband,2 IoT3

▪ Handset voice,

messaging, data

▪ Prepaid, contract

▪ 2G, 3G, 4G, 5G

Fixed

▪ Service,4 retail,

wholesale

▪ Voice, broadband,

dedicated

connections

▪ DSL, FTTP/B, cable,

FWA, 5G, other

ICT services

Pay TV

Traffic

Fixed and mobile

▪ Outgoing voice

minutes, MoU

Mobile data traffic

Our forecasts are refined throughout the year. This

report presents the results at the time of publication

and will continue to give useful background information

about key drivers. However, we recommend that you

always use the Analysys Mason DataHub to view the

latest data associated with this report.

https://www.analysysmason.com/research/content/regional-forecasts-/COVID-19-telecoms-service-revenue-forecast-May2020-rddg0-rdmm0-rdmb0-rdvs0-rdmy0-rddf0-rdme0-ren02-ren01-rdmz0-rdns0/

http://www.analysysmason.com/datahub


The COVID-19 pandemic will result in a revenue drop.

The COVID-19 pandemic has disrupted the service revenue trend

in Western Europe (WE). We expect that service revenue will have

declined by 3.7% in 2020, mainly due to shrinkage in the

business sector and a fall in roaming revenue (45% year-on-year).

Recovery will be slow, and there will be countervailing trends.

The roll-out of 5G will be operators’ main focus, but it is unlikely to

translate into significant revenue growth. The current migration to

contract plans will boost mobile revenue, but this will be offset by

the adoption of fixed–mobile convergence (FMC) plans in markets

that are not yet FMC-saturated. Both fixed broadband and pay-TV

revenue will grow due to price rises (made palatable by speed

upgrades and improved content) as the demand for these

services has become price inelastic. ICT services are another key

area of revenue growth: traditional business revenue has fallen,

but ICT/cloud services revenue will grow faster than previously

expected due to the increasingly virtual business environment.

The EECC adoption will encourage network investment.

The adoption of the Electronic Communications Code (EECC) will

result in a fall in the cost of high-speed broadband network roll-

outs due to increased civil infrastructure sharing. FTTP roll-outs

will intensify due to the relaxation of regulations for dominant

operators that co-invest and for wholesale-only operators. This will

lead to a further fall in the number of mobile-only households.

Figure 1: Telecoms and pay-TV retail revenue by type and total

service revenue, Western Europe, 2015–2025

Telecoms revenue will fall in 2020 due to COVID-19; market competition and

maturity will stunt recovery, despite 5G adoption and ICT services revenue growth

0

50

100

150

200

250

300

20

15

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16

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20

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20

19

20

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21

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25

Re

ve

nu

e (

EU

R b

illio

n)

Mobile services – handset Mobile services – broadband

Mobile services – IoT Fixed services – voice

Fixed services – broadband Dedicated connections

ICT services Pay TV

Service revenue Service revenue – previousSource: Analysys Mason


The number of prepaid connections will fall in 2020 due to

COVID-19 and users’ continued migration to contract plans.

Operators will continue to migrate subscribers from prepaid to

contract plans, and will often include 5G network access for free

in top-end packages as a pull factor. We expect that the

competitive pressure on ARPU will ease somewhat as MNOs focus

on defending and increasing their mobile revenue. MNOs will

release more unlimited data plans with 5G speeds, and will focus

on upselling ‘speed and data’ bundles as the number of 5G

handsets grows. For example, TIM in Italy and Elisa and Telia in

Finland are already offering unlimited 5G plans with advertised

speeds of 1Gbit/s.

MNOs will focus on increasing the take-up of 5G services,

despite the limited scope for a 5G-related ASPU increase.

Many MNOs in WE launched commercial 5G services in 2020,

despite COVID-19-related delays to spectrum auctions.1 MNOs will

therefore focus on further 5G network roll-outs and increasing

service take-up throughout the forecast period. 5G will only have

a moderate impact on ARPU due to competition among MNOs and

limited potential for premiums. However, together with expanding

LTE access, it will further drive the data traffic per handset. The

yearly growth in this metric will be particularly strong in 2020

(46%) due to the pandemic-related upsurge in handset data

usage, mainly from mobile-only customers.

Mobile: subscribers’ migration to contract plans and the increased take-up of 5G

speeds will help MNOs to slow down the decline in mobile revenue

Figure 7: Mobile connections by plan and 5G connections,

Western Europe (million), 2015–2025

Figure 8: Cellular data traffic per handset connection, Western

Europe (GB per month), 2015–2025

8

1 5G services are available in 15 of the 16 analysed countries in WE (Portugal is the exception) as of December 2020.

214 204 192 183 175 161 159 155 151 148 144

309 320 330 338 347 356 361 364 367 370 372

51%

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Prepaid Contract 5G share of connectionsSource: Analysys Mason

0.7 1.1 1.8 2.7 3.75.3

7.4

10.0

13.1

16.3

19.4

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Source: Analysys Mason


ContentsExecutive summary

Regional forecasts and cross-country comparison

Individual country forecasts

Methodology

About the authors and Analysys Mason


Charlie Westphal (Research Analyst) is a member of the research team in Cambridge. He holds an MSc in physics from the University of Leeds,

where he specialised in cyber-security methods within the IoT.

About the authors [1/3]

93

Julia Martusewicz-Kulinska (Senior Analyst) is a member of the regional markets research team, contributing mainly to the European Core

Forecasts, Telecoms Market Matrix and European Country Reports programmes. She has more than 17 years of research and telecoms

industry regulations experience. Prior to joining Analysys Mason, she worked for the Qatar national regulatory authority as a Competition

Analysis section manager and for Polish national regulatory authority as the head of the Research Division, where she was responsible for

telecoms market research, and as the leader of the Telecommunications Market Analysis Department, which was accountable for co-operation

between the regulatory authority and the Information Society and Media DG of the European Commission.

Felix Hall (Research Analyst) is a member of the data team in London, contributing to the European Country Reports and Telecoms Market

Matrix research programmes. He holds a BEng (Hons) in civil engineering from the University of Manchester and an MPhil in nuclear engineering

from the University of Cambridge, and has several academic publications concerning the application of machine learning techniques.


Qingyi Liang (Research Analyst) is a member of the Data Team in London, contributing primarily to the Telecoms Market Matrix, European

Country Reports and Asia–Pacific programmes. Qingyi has a MSc in Biomedical Sciences, and a PhD in Epigenetics and Cancer Biology from

University College London.


94

Rémy Giraud (Analyst) is a member of the regional markets research team in London, contributing mainly to the Telecoms Market

Matrix, European Core Forecasts, European Country Reports and Global Telecoms Data research programmes. Rémy holds a BSc in Economics

from the London School of Economics (LSE), and is on course to obtain an MSc in Risk and Finance from EDHEC Business School.

Olamide Makinde (Research Analyst) is a member of the Data Team in London, contributing primarily to the European Country Reports, The

Middle East and Africa and Telecoms Market Matrix research programmes. Olamide holds a BSc in Molecular Genetics from Kings College

London and an MSc in Genomic Medicine from Queen Mary University.


Noor Mohammed Khan (Research Analyst) is a member of the data team in London, contributing to the European Country Reports and

Telecoms Market Matrix research programmes. He holds a BEng (Hons) in chemical engineering from the University of Manchester and an MSc

in chemical process engineering from UCL.


95

Michelle Lam (Research Analyst) is a member of the data team in Cambridge, contributing to the European Country Reports and Telecoms

Market Matrix research programmes. She holds a BSc in physics and an MSc in quantum technologies from University College London (UCL),

where she was elected as an academic representative to the Students’ Union and served as a Research Executive at the UCL Centre for

Blockchain Technologies. She has worked as a data analyst in machine learning and experimental physics and has undertaken quantum

computing research at the London Centre for Nanotechnology.


▪ Consulting

▪ We deliver tangible benefits to clients across the telecoms

industry:

− communications and digital service providers, vendors,

financial and strategic investors, private equity and

infrastructure funds, governments, regulators, broadcasters

and service and content providers

▪ Our sector specialists understand the distinct local challenges

facing clients, in addition to the wider effects of global forces.

▪ We are future-focused and help clients understand the

challenges and opportunities new technology brings.

▪ Research

▪ Our dedicated team of analysts track and forecast the different

services accessed by consumers and enterprises.

▪ We offer detailed insight into the software, infrastructure and

technology delivering those services.

▪ Clients benefit from regular and timely intelligence, and direct

access to analysts.

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Analysys Mason’s consulting and research are uniquely positioned

Analysys Mason’s consulting services and research portfolio


Research from Analysys Mason

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Consulting from Analysys Mason

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MARCH 2021

Western Europe telecoms market: trends and forecasts 2020–2025

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