EIU forecasts 2% fall in telco revenue in 2018

Research firm expects increasing strain on operator finances due to declining ARPU, pressure to upgrade networks

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Operators could be set for a tough 2018, as the Economist Intelligence Unit (EIU) this week predicted revenues in the 60 biggest telco markets will fall by 2% to $1.2 trillion (€1.01 trillion) next year.

The research firm expects the increasing strain to be driven by the requirement to invest in network upgrades to address surging demand for data, and downward pressure on the top line due to intense competition, both from rival telcos and over-the-top (OTT) players.

The EIU said it expects ARPU in the top 60 markets to fall by 2.3% for mobile operators and by 11.5% for fixed-line operators.

"Operators are going to have to think about how best to adapt in a space where consumer demand is dictating the pace, lending an even greater urgency to the need to find new and creative revenue streams," said Matt Kendall, EIU telecoms analyst, in a research note on Tuesday.

In addition, "a more interventionist stance" by regulators is taking hold in some parts of the world, the EIU warned, which "may affect how quickly operators can roll out infrastructure and restrict their room for manoeuvre as they compete and consolidate."

On the upside, operators have a chance to ease the pressure by establishing themselves in the Internet of Things (IoT), big data analytics, and cloud computing markets. These in turn will drive developments in smart homes, autonomous vehicles, and improvements to commercial operations, the EIU said.

Meanwhile, global mobile subscriptions will continue to increase, driven by ongoing strong uptake in Asia and Sub-Saharan Africa – the world's fastest growing region, according to the EIU.

It expects global mobile subscriptions to reach 6.34 billion next year, up from 6.13 billion this year.