Informa Telecoms & Media has forecast that mobile operators in Central and Eastern Europe will increase their annual service revenues by more than 30% to US$77 billion in 2013. As the rise in voice revenues levels off from 2011, overall growth will be driven by a doubling in the value of data revenues which will reach US$23.4 billion in 2013.
Growth will be chiefly driven by continued expansion of the mobile subscription base, which Informa Telecoms & Media forecasts will increase almost 20%, from 447 million at end-2008 to 534 million at end-2013.
"New customers will be signed up in fast-growing markets in Central Asia and the Balkans," said Abigail Browne, senior analyst at Informa Telecoms & Media. "But growth will also be fuelled by the increasing tendency for people to maintain two or more SIM cards in active use – in some cases buying the second for a mobile broadband connection."
'Central & Eastern Europe: Mobile Market Analysis and Forecasts', the new report from Informa, is said to show that annual mobile data revenues in Central and Eastern Europe will increase 107% from US$11.3 billion in 2008 to US$23.4 billion in 2013. As a result, the proportion of operators' revenue generated by data is forecast to increase by more than half, from 19.4% in 2008 to 30.4% by 2013.
Voice revenue from existing subscriptions will also rise gradually, due to increased usage: leading Russian operators MTS and VimpelCom, for example, have already seen average outgoing and incoming minutes of use (MOU) exceed 200 per subscription per month in 2008, which can be attributed partly to promotions offering low-cost on-net calling.
Higher monthly rental incomes are also contributing to revenue growth in markets where operators have concentrated on migrating prepaid subscriptions onto contracts – a trend that will continue to have a positive impact on revenues in the region over the next five years. "The share of subscriptions on contracts in the Czech Republic, for example, increased by 3.3 percentage points over 2008, helping to shore up blended ARPU, as revenue from contract subscriptions increased," said Browne.
However, the forecasts may be impacted by the ongoing financial crisis with leading operators in Central and Eastern Europe having registered a fall in revenue in 4Q08 reported in US dollars. This was due in large part to the sharp fall in the value of many of the region's currencies against the US dollar (the Ukrainian Hryvnia lost around 52% of its value in 4Q08 alone, while the Russian ruble and Polish zloty have both lost more than 30% of their value since September 2008).
Although voice revenues, particularly in the enterprise sector, are likely to be suppressed by the contraction of the region's economies, operators have expressed optimism that mobile data services will prove resilient.