Mobile network operators in Europe feel full punch of credit crunch

Europe has become the first regional mobile telecoms market to feel the impact of the credit crunch, according to a new report from global advisory and consulting firm Ovum titled, Credit crunch jitters dawn on global mobile market.

Ovum’s report looked at the third quarter financial results of multiple mobile operators in all regions of the world, finding that Europe’s top mobile operators are the one that are beginning to feel the hit from the credit crunch. Unlike other regions where the mobile market has proved resilient so far, the third quarter financial results of Europe’s top mobile operators show a marked, credit crunch induced deterioration in their performance, says Emeka Obiodu, senior analyst at Ovum and the lead author of the report.

According to Ovum’s report findings, while operators in other regions showed little signs of feeling the credit crunch, their European counterparts saw their revenue generating prospects shrink. So far, the North American mobile market has withstood the credit crunch and has been helped by the rise in two year mobile contracts. Meanwhile, operators in the emerging market continued to enjoy generous revenue growth rates, with Africa and Latin America operators reporting double digit revenue growth rates.

However, despite the general state of the global mobile industry, Ovum does not anticipate a major slow down for the mobile telecoms industry. Although some operators may become vulnerable, the market remains overwhelmingly buoyant and we expect it to ride out the financial crises.

Reassuringly, the basics of the mobile market are still intact, says Obiodu. “Mobile services have become the de-facto consumer communication tool of choice, and with an increasing shift to postpaid contracts, plus the opportunities enabled by high-speed mobile data services, there is still money out there to be made in the mobile market.”