Top 10 mobile carriers generate US$202 billion in gross profit
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Top 10 mobile carriers generate US$202 billion in gross profit

Worldwide service revenue, year-on-year (YoY) for 4Q-2012 grew 2.8% to US$240.5 billion, according to new data from ABI Research (www.abiresearch.com).

Western Europe and Africa’s mobile operator actually demonstrated a contraction in service revenue YoY of 8.2% and 6.9%, respectively, according to the research group. Middle East, Latin America, and Asia-Pacific are still showing reasonably robust rates of growth of 7% to 11%. Eastern Europe and North America, however, are only barely keeping their service revenue growth in positive territory.

"As the underlying lift from accumulating subscribers has matured, carriers are starting to cast around for additional revenue streams that don’t just boost revenues but also profitability," says Jake Saunders, vice president for core forecasting at ABI Research. "There is still tremendous income to be generated from mobile services; the Top 10 Mobile Carriers alone generated US$ 202 billion in gross profit, up 4.2 % year-on-year in 2012."

For some of those in the Top 10, subscriber growth is still a major contribution (e.g. China Mobile, is 1st; MTN is 6th; and China Telecom, 8th). These carriers may rely on expanding subscriber bases to drive overall profit for another 3-5 years, but after that, they will need to tap other sources.

For the other carriers in the Top 10, securing a significant market share in their domestic/regional markets, combined with pooling infrastructure resources such as data centers, as well as group-level handset and equipment purchasing, has led to economies of scale, says ABI Research.

Verizon Wireless (2nd), Vodafone Group (3rd), AT&T (4th), and NTT DoCoMo (5th) do hold significant market shares, but this does not entirely explain their success. These carriers have aggressively hopped onto the fourth innovation wave shaping the mobile telecommunications industry -- namely, IP-based value-added services. OTT players can potentially sap the revenue opportunities for incumbent mobile telecom players but carriers, such as Verizon and AT&T, are showing that it is possible to put ARPU [average revenue per user] back on an upwards trajectory through the introduction of, for example, multi-device tariffs and M2M services.

 
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