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Global Telecom Insider / Vol. 2, No 5, Edition 9 - Influx of New Competitors Poses Challenges for Mobile Operators Worldwide
Pyramid Research, Inc., Sep 2010, Pages: 18
While the number of mobile network operators has grown over the past six years, mobile services continue to be dominated by the largest operators, posing significant long-term challenges to new competitors in their efforts to build market share and sustainable revenue streams, according to a new report.
Influx of New Competitors Poses Challenges for Mobile Operators Worldwide analyzes competition among mobile network operators by examining the number of operators in each country and researching the new players to determine how much of the growth is local and how much is from foreign operators expanding into new markets. The impact of the global economic crisis of 2007-2009 on market share and competition globally is addressed, along with case studies of three regions: Africa & the Middle East, Asia/Pacific, and Western Europe.
The number of mobile network operators (MNOs) per country has continued to increase from an average 4.0 operators per country in 2004 to 4.9 this year, leading to increased competition at the local level and smaller market share for the top players. When analyzing emerging and developed markets separately, one can discern two separate and distinct trends: In developed regions, the number of operators stayed relatively flat, whereas in emerging markets the number of operators per country increased from an average of 4.0 in 2004 to 5.4 today, notes Emily Smith, Research Associate at Pyramid.
'As mobile markets mature, Pyramid Research has found that the market share for the top operators converges toward an equilibrium point that is roughly the same across all global regions,' Smith says. 'While the average market share has hardly changed in developed regions, in emerging regions the market share for top operators has decreased by 10 percentage points in the past seven years.'
'Due to consumers' changing appetite for mobile services over the course of the recent global financial crisis, the speed at which the top operators lost share increased, although now that the global economy is moving into a recovery stage, top operators can expect to experience less share shrinkage than in recent years,' Smith adds.
Key findings
- Competition in the mobile network market has increased, as indicated by the growing number of operators globally as well as the shrinking market share for the top two operators.
- New operators in recent years have been local players, either from neighboring countries or from within the country, indicating that now there is an advantage for operators that have greater familiarity with the local market.
- Market share for the largest operators globally have begun to converge, especially in the more mature markets, which leads us to believe that there is a natural size for the largest operator, all other factors being equal.
- The global financial crisis has changed consumers’ spending patterns in a way that is not expected to revert back to former patterns in the medium term, meaning further market share loss for top operators.
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