Mobile operators are beating the recession

Emeka Obiodu/Ovum
30 Apr 2009

Mobile operators are comfortably and steadily beating the recession, according to the findings of a new report, Mobile operators in a recession: lessons and coping strategies.

The report tracked the performance of mobile operators across all regions in the world for 2008. Overall, operators maintained revenue and customer growth during the period, but the rate of growth is down.

While most operators in emerging markets are yet to see any serious pressures on their performance, operators in countries such as the US and across Europe, where the recession has had dramatic impact, operators\' revenues are holding up. Indeed, it is not about immunity from the recession per se, but rather, adaptability to the downturn.

Whereas other industries have gone to the government with begging bowls, mobile operators are pledging to invest billions to roll out a new high speed mobile network. After scouring the world, we are yet to find any mobile operator that is struggling calamitously solely because of the recession.

The report projected the three key mechanisms of how the recession affects mobile operators:

  • The threat to the number of revenue generating customers has yet to materialize as operators are generally still growing and adding customers.
  • While the fear that existing customers will reduce their spending is valid, mobile operators have taken steps to avoid or negate the impact.
  • The biggest threat to mobile operators is that currency fluctuations reduces the value of their revenue, making it difficult to maintain repayment on dollar or euro denominated debts and to fund new network investment.

Operators need to focus on competition and regulation, which are the biggest challenges they face: wherever an operator has complained about the recession, it is possible to show a corresponding non-recessionary force at play.

While the short term impact is limited, the recession will ultimately bring about shift in strategic thinking across the industry. The basics of the industry will surely remain the same, but the approach to service delivery will eventually change.

Emeka Obiodu, Senior Analyst

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