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Western Europe telecoms market: trends and forecasts 2020–2025
Western Europe telecoms
market: trends and forecasts
2020–2025
Julia Martusewicz-Kulinska, Charlie Westphal, Felix Hall,
Olamide Makinde, Qingyi Liang, Rémy Giraud, Michelle Lam,
and Noor Mohammed Khan
February 2021, based on data up to 3Q 2020
Western Europe telecoms market: trends and forecasts 2020–2025
Analysys Mason provides detailed 5-year forecasts of the fixed
and mobile telecoms market in Western Europe. Our
forecasts take into consideration the likely range of economic
impacts that the COVID-19 pandemic may have on operators’
telecoms service revenue worldwide.1
This report focuses on operators’ core telecoms services. It
includes discussion of IoT, pay-TV and operator business services.
These services are discussed in detail in our other research
programmes.
Our forecasts are informed by on-the-ground, regional market
experts from our topic-led research programmes and our
consulting division, as well as external interviews. In addition to
our robust set of historical data, our forecasts draw on a unique
and in-house modelling tool, which applies a rigorous procedure
(reconciling different sources, standard definitions, top-down and
bottom-up modelling).
2
About this report
1 More details about the COVID-19 forecast can be found in Analysys Mason’s COVID-19 scenarios for telecoms operator service
revenue: worldwide forecasts 2019–2024. 2 Includes USB modem, and mid- and large-screen, but not handset-based data. 3 IoT
connections and revenue figures include mobile services only. 4 Service revenue is the sum of retail and wholesale revenue.
REPORT COVERAGE
Geographical Key performance indicators (around 350)
Region modelled
▪ Western Europe
(WE)
Countries modelled
individually
▪ Austria
▪ Belgium
▪ Denmark
▪ Finland
▪ France
▪ Germany
▪ Greece
▪ Ireland
▪ Italy
▪ Netherlands
▪ Norway
▪ Portugal
▪ Spain
▪ Sweden
▪ Switzerland
▪ UK
Connections Revenue/ARPU/ASPU
Mobile
▪ Handset, mobile
broadband,2 IoT3
▪ Prepaid, contract
▪ 2G, 3G, 4G, 5G
▪ Smartphone,
non-smartphone
Fixed
▪ Voice, broadband
▪ Narrowband voice,
VoBB
▪ DSL, FTTP/B, cable,
FWA, 5G, other
Pay TV
Mobile
▪ Service,4 retail,
wholesale
▪ Handset, mobile
broadband,2 IoT3
▪ Handset voice,
messaging, data
▪ Prepaid, contract
▪ 2G, 3G, 4G, 5G
Fixed
▪ Service,4 retail,
wholesale
▪ Voice, broadband,
dedicated
connections
▪ DSL, FTTP/B, cable,
FWA, 5G, other
ICT services
Pay TV
Traffic
Fixed and mobile
▪ Outgoing voice
minutes, MoU
Mobile data traffic
Our forecasts are refined throughout the year. This
report presents the results at the time of publication
and will continue to give useful background information
about key drivers. However, we recommend that you
always use the Analysys Mason DataHub to view the
latest data associated with this report.
Western Europe telecoms market: trends and forecasts 2020–2025
The COVID-19 pandemic will result in a revenue drop.
The COVID-19 pandemic has disrupted the service revenue trend
in Western Europe (WE). We expect that service revenue will have
declined by 3.7% in 2020, mainly due to shrinkage in the
business sector and a fall in roaming revenue (45% year-on-year).
Recovery will be slow, and there will be countervailing trends.
The roll-out of 5G will be operators’ main focus, but it is unlikely to
translate into significant revenue growth. The current migration to
contract plans will boost mobile revenue, but this will be offset by
the adoption of fixed–mobile convergence (FMC) plans in markets
that are not yet FMC-saturated. Both fixed broadband and pay-TV
revenue will grow due to price rises (made palatable by speed
upgrades and improved content) as the demand for these
services has become price inelastic. ICT services are another key
area of revenue growth: traditional business revenue has fallen,
but ICT/cloud services revenue will grow faster than previously
expected due to the increasingly virtual business environment.
The EECC adoption will encourage network investment.
The adoption of the Electronic Communications Code (EECC) will
result in a fall in the cost of high-speed broadband network roll-
outs due to increased civil infrastructure sharing. FTTP roll-outs
will intensify due to the relaxation of regulations for dominant
operators that co-invest and for wholesale-only operators. This will
lead to a further fall in the number of mobile-only households.
Figure 1: Telecoms and pay-TV retail revenue by type and total
service revenue, Western Europe, 2015–2025
Telecoms revenue will fall in 2020 due to COVID-19; market competition and
maturity will stunt recovery, despite 5G adoption and ICT services revenue growth
0
50
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150
200
250
300
20
15
20
16
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17
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19
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21
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22
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25
Re
ve
nu
e (
EU
R b
illio
n)
Mobile services – handset Mobile services – broadband
Mobile services – IoT Fixed services – voice
Fixed services – broadband Dedicated connections
ICT services Pay TV
Service revenue Service revenue – previousSource: Analysys Mason
Western Europe telecoms market: trends and forecasts 2020–2025
The number of prepaid connections will fall in 2020 due to
COVID-19 and users’ continued migration to contract plans.
Operators will continue to migrate subscribers from prepaid to
contract plans, and will often include 5G network access for free
in top-end packages as a pull factor. We expect that the
competitive pressure on ARPU will ease somewhat as MNOs focus
on defending and increasing their mobile revenue. MNOs will
release more unlimited data plans with 5G speeds, and will focus
on upselling ‘speed and data’ bundles as the number of 5G
handsets grows. For example, TIM in Italy and Elisa and Telia in
Finland are already offering unlimited 5G plans with advertised
speeds of 1Gbit/s.
MNOs will focus on increasing the take-up of 5G services,
despite the limited scope for a 5G-related ASPU increase.
Many MNOs in WE launched commercial 5G services in 2020,
despite COVID-19-related delays to spectrum auctions.1 MNOs will
therefore focus on further 5G network roll-outs and increasing
service take-up throughout the forecast period. 5G will only have
a moderate impact on ARPU due to competition among MNOs and
limited potential for premiums. However, together with expanding
LTE access, it will further drive the data traffic per handset. The
yearly growth in this metric will be particularly strong in 2020
(46%) due to the pandemic-related upsurge in handset data
usage, mainly from mobile-only customers.
Mobile: subscribers’ migration to contract plans and the increased take-up of 5G
speeds will help MNOs to slow down the decline in mobile revenue
Figure 7: Mobile connections by plan and 5G connections,
Western Europe (million), 2015–2025
Figure 8: Cellular data traffic per handset connection, Western
Europe (GB per month), 2015–2025
8
1 5G services are available in 15 of the 16 analysed countries in WE (Portugal is the exception) as of December 2020.
214 204 192 183 175 161 159 155 151 148 144
309 320 330 338 347 356 361 364 367 370 372
51%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Prepaid Contract 5G share of connectionsSource: Analysys Mason
0.7 1.1 1.8 2.7 3.75.3
7.4
10.0
13.1
16.3
19.4
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Source: Analysys Mason
Western Europe telecoms market: trends and forecasts 2020–2025
ContentsExecutive summary
Regional forecasts and cross-country comparison
Individual country forecasts
Methodology
About the authors and Analysys Mason
Western Europe telecoms market: trends and forecasts 2020–2025
Charlie Westphal (Research Analyst) is a member of the research team in Cambridge. He holds an MSc in physics from the University of Leeds,
where he specialised in cyber-security methods within the IoT.
About the authors [1/3]
93
Julia Martusewicz-Kulinska (Senior Analyst) is a member of the regional markets research team, contributing mainly to the European Core
Forecasts, Telecoms Market Matrix and European Country Reports programmes. She has more than 17 years of research and telecoms
industry regulations experience. Prior to joining Analysys Mason, she worked for the Qatar national regulatory authority as a Competition
Analysis section manager and for Polish national regulatory authority as the head of the Research Division, where she was responsible for
telecoms market research, and as the leader of the Telecommunications Market Analysis Department, which was accountable for co-operation
between the regulatory authority and the Information Society and Media DG of the European Commission.
Felix Hall (Research Analyst) is a member of the data team in London, contributing to the European Country Reports and Telecoms Market
Matrix research programmes. He holds a BEng (Hons) in civil engineering from the University of Manchester and an MPhil in nuclear engineering
from the University of Cambridge, and has several academic publications concerning the application of machine learning techniques.
Western Europe telecoms market: trends and forecasts 2020–2025
Qingyi Liang (Research Analyst) is a member of the Data Team in London, contributing primarily to the Telecoms Market Matrix, European
Country Reports and Asia–Pacific programmes. Qingyi has a MSc in Biomedical Sciences, and a PhD in Epigenetics and Cancer Biology from
University College London.
About the authors [2/3]
94
Rémy Giraud (Analyst) is a member of the regional markets research team in London, contributing mainly to the Telecoms Market
Matrix, European Core Forecasts, European Country Reports and Global Telecoms Data research programmes. Rémy holds a BSc in Economics
from the London School of Economics (LSE), and is on course to obtain an MSc in Risk and Finance from EDHEC Business School.
Olamide Makinde (Research Analyst) is a member of the Data Team in London, contributing primarily to the European Country Reports, The
Middle East and Africa and Telecoms Market Matrix research programmes. Olamide holds a BSc in Molecular Genetics from Kings College
London and an MSc in Genomic Medicine from Queen Mary University.
Western Europe telecoms market: trends and forecasts 2020–2025
Noor Mohammed Khan (Research Analyst) is a member of the data team in London, contributing to the European Country Reports and
Telecoms Market Matrix research programmes. He holds a BEng (Hons) in chemical engineering from the University of Manchester and an MSc
in chemical process engineering from UCL.
About the authors [3/3]
95
Michelle Lam (Research Analyst) is a member of the data team in Cambridge, contributing to the European Country Reports and Telecoms
Market Matrix research programmes. She holds a BSc in physics and an MSc in quantum technologies from University College London (UCL),
where she was elected as an academic representative to the Students’ Union and served as a Research Executive at the UCL Centre for
Blockchain Technologies. She has worked as a data analyst in machine learning and experimental physics and has undertaken quantum
computing research at the London Centre for Nanotechnology.
Western Europe telecoms market: trends and forecasts 2020–2025
▪ Consulting
▪ We deliver tangible benefits to clients across the telecoms
industry:
− communications and digital service providers, vendors,
financial and strategic investors, private equity and
infrastructure funds, governments, regulators, broadcasters
and service and content providers
▪ Our sector specialists understand the distinct local challenges
facing clients, in addition to the wider effects of global forces.
▪ We are future-focused and help clients understand the
challenges and opportunities new technology brings.
▪ Research
▪ Our dedicated team of analysts track and forecast the different
services accessed by consumers and enterprises.
▪ We offer detailed insight into the software, infrastructure and
technology delivering those services.
▪ Clients benefit from regular and timely intelligence, and direct
access to analysts.
96
Analysys Mason’s consulting and research are uniquely positioned
Analysys Mason’s consulting services and research portfolio
Western Europe telecoms market: trends and forecasts 2020–2025
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MARCH 2021