January 2013

European Wholesale Telecom 2013 Outlook

Ovum says, European carriers must do more in non-voice and mobile wholesale to offset voice revenue slide

For Immediate Release

London, 14 January 2013  Revenues for the European wholesale telecoms market remained steady between 2010 and 2011, despite the economic downturn, intense competition, and regulatory actions. This is according to Ovum, which reveals the European wholesale market was worth US$48.4bn in 2011, only 0.5 percent less than in 2010, representing 11percent of the leading wholesalers’ total European revenues.

Ovum’s annual analysis* of the size of the European wholesale market, based on the reported results of the 25 leading wholesalers, reveals a highly concentrated market. In 2011 the top four wholesalers in Europe (BT, Deutsche Telekom, FT-Orange and Telefonica) accounted for over 50percent of total European wholesale revenue, with the top 10 responsible for nearly 75percent of the total. Yet almost all of the leading wholesalers in Europe experienced falling revenues from fixed voice. While some are mitigating the effect of this decline by broadening the attractiveness of their non-voice services, all of them need to do more.

“Wholesalers must lessen their dependence on traditional wholesale fixed voice sales by meeting customers’ needs for non-voice services,” explains David James, principal wholesale telecoms analyst at Ovum. “Many carriers have already expanded their non-voice portfolios by offering emerging new services such as carrier Ethernet, content distribution, and hosting. However, they must do more to attract and retain customers for their wholesale mobile and non-voice services.”

Mobile wholesale is a growing sector in Europe, according to Ovum, and offers significant potential for growth based on an increasingly diverse customer base, but it requires a more complete and flexible wholesale portfolio than capacity alone. The fixed non-voice sector also offers greater opportunities for innovation and differentiation than voice services do.

Ovum found that a number of carriers, including Telecom Italia and French altnet SFR, did increase their revenues from other sectors to more than compensate for declines in fixed voice. This wasn’t the case, however, for BT, the largest wholesaler in Europe by revenue, which saw its wholesale revenues decline from 2010 to 2011 as a direct result of falling fixed voice sales. Only one of the leading players in the wholesale fixed voice sector – Belgacom – managed to increase its revenues from the sector, while all of the players in the wholesale non-voice sector experienced growing revenues.

“The decline in revenues from wholesale voice services shows no sign of relenting.  Wholesalers must take action to understand and satisfy their customers’ developing requirements for non-voice services. This is particularly true for the few that dominate Europe’s wholesale market,” concludes James.

*European Wholesale Market Share 2010–11: The Big Picture (Dec 12)

  European Wholesale Market Share 2010–11: The Detail (Dec 12)


Jointly awarded IIAR Global Analyst Firm of the Year 2012, Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Its research draws upon over 400,000 interviews each year with business and technology, telecoms and sourcing decision-makers, giving Ovum and its clients unparalleled insight, not only into business requirements but also the technology that organizations must support. Ovum is an Informa business.