Informa Telecoms & Media Shop - Incumbent PTTs in Western Europe
 

Incumbent PTTs in Western Europe

Benchmark-IT's report profiling 14 carriers.

Published: September 2005

Executive Summary

Incumbent operators across Western Europe had combined revenues of almost ے253 billion in 2004, employed nearly one million people, serving billions of customers around the world.

Although faced with continued stiff competition in their domestic fixed markets, and with many national mobile markets reaching a plateau, growth has been achieved through international assets in less mature markets, expansion into adjacent markets on the value chain, such as systems integration, and through the on-going boom in the take-up of broadband services.

Organisations have become more focused on target customer groups, with previously separate divisions tending to have been re-absorbed in an effort to present a consistent approach to individual customers, as well as to enable synergy savings. Debt levels have been reduced overall and merger and acquisition activity has picked up.

However, incumbents face a potentially bewildering array of shifts in the telecoms sector as a whole. Developments such as VoIP (Voice over Internet Protocol), FMC (Fixed-Mobile Convergence) and NGNs (Next Generation Networks) offer both threats and opportunities. Regulation continues to play a key role, as does the on-going influence of national governments, many of which continue to hold substantial stakes in their domestic incumbent.

With the continued erosion of revenues from traditional fixed voice services, incumbents have been looking for new revenue opportunities and ways to build stronger relationships with their existing base of customers. A combination of tariff and product bundles has generally slowed, but not stopped, that erosion. Most companies profiled in this report are now looking to exploit 'triple play' (fixed voice, Internet access and content) strategies to generate new revenues, but this will involve them facing up to a new competitive sector - content owners, suppliers and aggregators. To date, there has been little evidence of success amongst PTTs following this path, so the strategy is high-risk.

In the meantime, costs have continued to be cut to compensate for declining revenues, and there is clear evidence that costs are under close review in mobile units as well as fixed ones. Should new revenue streams not prove to be forthcoming, or deliver much less than projected, incumbents, particularly those without growing international assets, will once again look to consolidation to leverage economies of scale. Summary & Sample Pages benchmark-it.co.uk Data to end July 2005 © benchmark-it.co.uk. All rights reserved. For reproduction rights contact info@benchmark-it.co.uk. Opinions reflect judgement at the time and are subject to change.

To date, experience of incumbent consolidation has not been particularly encouraging, but the political, cultural and organisational challenges will be overcome if the motive is compelling enough - and the day when that motive becomes compelling may well be growing nearer.