30 years of experience in the liberalization of the European Telecommunications Market
since many countries issued licenses to mobile operators in the mid-1980s, the competition in the European telecommunications market has become increasingly fierce, typically between leading fixed line companies and mobile operators. There are great differences in the speed of market liberalization among countries, but they typically involve a mixed mode: pre select operators, and split wholesale lines, broadband and local loops according to the dominant operators; Completely liberalize the competition in infrastructure; Additional mobile operators issue licenses, approve MVNO (mobile virtual network operator) to provide services, and allow cable TV companies to provide services. Over the past 30 years, what are the growth, challenges and opportunities of the European Telecommunications Industry
the old giants are still in power.
megabuyte, an industry analysis company, has tracked and analyzed the financial, corporate and strategic activities of more than 80 Telecom and network operators that mainly operate in Europe. These operators' revenue is at least 50million euros. They have earned a total of 260billion euros in major European markets and 410billion euros in global markets. In the analysis, the top nine operators are leading companies or pioneers of early mobile operators, such as Deutsche Telekom, telecom Spain, Vodafone and orange. Liberty global is the top non European operator/foreigner from the United States, ranking 10th. The 80 companies are roughly divided into companies with revenues of at least 1billion euros and many companies with revenues of less than 1billion euros, the latter mainly providing services for the commercial communication market. Among the larger companies, most of them are leading companies, second/third ranked mobile operators or cable TV operators
in general, the leading companies still account for about two-thirds of the total revenue of the industry. In its domestic fixed market and mobile market, most of the leading companies, except for the agricultural market, are hung with a thick stack of plastic bags on the stalls, and they still occupy the first position, and are the main competitors in other geographical markets. Only companies with mobile services account for about one-fifth of the total revenue of the industry, and the rest belong to cable television companies, telecommunications networks companies, and various companies that can be called alternative network providers, from professional network companies with rich infrastructure to pure commercial communication dealers. Each group has some different financial characteristics, although generally speaking, cable TV companies are currently in a very favorable position compared with their peers (i.e. leading companies and mobile operators), especially for the latter, who are suffering from declining revenue and profits, increasing capital expenditure bills and reducing free cash flow
the financial situation of cable TV enterprises is the best.
based on the data of 2013 by replacing the pendulum and sample base, the revenue of leading companies and mobile operators decreased by 4% to 5%, mainly due to the decline of mobile terminals and roaming charges driven by regulation. In contrast, cable TV companies' revenue increased by an average of 1%, thanks to higher TV revenue growth and lower mobile terminal tariffs. The revenue of alternative network providers increased by nearly 6% on average, mainly due to the fact that they are usually smaller and more agile, and can gain market share growth in a stable market. Even so, there are huge differences in the financial status of alternative network providers, and not all differences can be attributed to countries, market segments or company ages
in fact, like leading companies, many early alternative network providers now face the same risks in their business models, because they may lose the ability to transmit from and to computers; The computer can take the income of industrial control configuration software system business, and need to invest in new business at the same time. In this regard, jazztel's performance is noteworthy. Despite the income level of 1billion euros, the company has achieved an overall growth of 15% in the highly competitive and economically challenging Spanish market, leading the three in one consumer service market in Spain. The only European telecommunications company that surpassed jazztel in terms of scale/growth was Iliad of France, whose revenue increased by 19% in 2014 to 3.2 billion euros
in addition to beating leading companies and mobile operators in terms of revenue growth, cable TV companies also performed well in terms of profits, with EBITDA profits (before interest, taxes, depreciation and amortization) of about 45%, compared with 34% for leading operators, 26% for mobile operators and 21% for alternative network providers. Considering the high profits lost in mobile terminals and roaming business revenue, as well as the negative impact on EBITDA, which has been slowed down due to cost savings in customer service, sales and marketing, networking and other aspects, the relatively stable EBITDA profits of leading companies and mobile operators are actually quite impressiveThe trend of
is also more conducive to cable TV companies, with an average increase of 2%. Compared with the average decrease of 5% for leading companies and mobile operators, it generally reflects the basic income trend. The EBITDA of alternative network providers actually achieved a surprisingly strong growth of 12%
cable TV companies have the highest proportion of capital investment, accounting for 18% of total revenue. In comparison, mobile operators and leading companies account for 14% - 16%, and typical, asset light alternative network providers account for 8%. Due to investment in broadband services, the capital expenditure of cable TV companies, leading companies and mobile operators also increased by 7% to 9%
among European telecom operators, how can cable TV companies form the best combination of return and growth? In general, compared with their dominant fixed competitors, cable TV networks are more technologically advanced, especially in terms of broadband capacity, and they have larger growth areas, such as video. They are also at the forefront of the newly integrated three in one/four in one business model. It is no wonder that leading companies and mobile companies have killed back these areas, especially broadband and integration
operators fight back with broadband
all major operators are now spending a lot of money to promote the rapid development of broadband technology by using 4G mobile technology, vdsl+vector technology, DOCSIS 3.0 technology, FTTP and FTTC technology. Compared with existing technologies, these technologies can provide much faster speed. For mobile operators and cable TV operators, 4G and DOCSIS 3.0 are relatively simple and easy to implement technical solutions. Leading companies face more complex options between more expensive but more durable and effective FTTP and FTTC technologies. In terms of technical options, Europe faces a more complex and mixed situation
may represent a huge technological progress, bringing real broadband speeds of up to 300mbps to mobile devices. In terms of ARPU (average income per user) with advanced production equipment such as 1+1 (3300mm, 2800mm) wide hot rolling production line, 2800mm cold rolling mill, 30mn stretching machine, mobile network operators are also promoting the positive impact of 4G and accelerating the launch of 4G plan. Although Europe has lagged far behind the United States, operators are making efforts. At the end of 2014, EE in the UK had 7.7 million 4G users, accounting for about a quarter of its user base, breaking its initial target of 6million. The improvement of regulatory impact prospects and company specific factors provide strong support for increasing investment. For example, Vodafone obtained unexpected gains from the sale of its shares in Verizon Wireless
for fixed line broadband providers, technology upgrading is not so direct. Leading companies have a variety of options, such as choosing between FTTP and fttc/vdsl. The choice is usually based on various factors, including housing density, regulatory environment, etc. Major operators, such as BT and Deutsche Telekom, choose VDSL technology with low cost, while markets such as Portugal and Sweden see strong growth in FTTP penetration. Of course, a controversial issue is how many typical bandwidth consumers really need these technologies. Some people argue that FTTP with 0.5~1gbps is supported, while others claim that various VDSL modes with 20~200mpbs are more appropriate. In 2000, bredbandsbolaget, an ISP in Sweden, believed that the market at that time mainly provided 10Mbps services through its optical fiber network, and the supply exceeded the needs of any family! The lesson may be that many times, the so-called requirements are often created by the service provider itselfallen bradley parts