It’s official – the good days are behind us and no more is Europe the place to be.

For the third year in a row, revenues from Europe’s telecoms sector have dropped, according to ETNO, the trade body for the region’s operators. The group released its third ETNO Annual Economic Report and found that total revenue in Europe’s telecoms sector amounted to €274.7bn in 2011, a decrease by 1.5 per cent compared to 2010.

To put that in perspective, the last time Europe’s telecoms market was on the rise, David Tennant was still Doctor Who, Obamamania swept the US and Europe for the first time, and Justin Bieber hadn’t even been discovered. Those were the times.

The report also revealed that over the past six years, Europe’s share of global telecoms markets has shrunk from almost a third (31 per cent) to a quarter (25 per cent).

Fixed telephony revenues experienced a decline of eight per cent year on year, while mobile revenues have reduced 0.6 per cent, although broadband markets revenue grew by four per cent. Investments in fixed and mobile sectors continued to grow by 4.6 per cent.

While EU leaders are trying to come to agreement on Europe’s 2014-2020 budget, the Americans are coping more impressively with the impact the economic climate is having on the telecoms sector. The seventeen largest cable and telecoms providers in the US – representing around 93 per cent of the market) – acquired 579,521 additional broadband subscribers in the third quarter of this year, according to US firm Leichtman Research Group.

Cablecos added by far the majority (574k) of this total, with Comcast alone contributing 287,000, and Time Warner Cable delivering 98,000. Charter Communications was in third place with 78,000 additions.

The ETNO report suggests that one issue facing European businesses is time-to-market and the lack of any sense of urgency. The Informer concludes this not because of any finding flagged up in the report, but due to the fact that ETNO has only now gotten around to publishing statistics on 2011, just over a month before we enter 2013.

While Europe is in decline, the emerging markets are, well, emerging. The Informer arrived back from Cape Town earlier this week, after visiting the annual AfricaCom event, where the scenery, weather and cheap lager were not the only things that impressed. The region can still stake a claim to be a true pioneer when it comes to the use of mobile money.

This was evidenced by the African subsidiary of Indian operator group Bharti Airtel extending its mobile money transfer service across the 17 African markets it operates in. Airtel Africa’s subscribers are now able to send and receive money transfers to customers of any one of a community of mobile network operators, and money transfer organisations, through the BICS’ HomeSend global hubbing service.

Financial services firm Fundamo has reported that it expects to see accelerated growth of such services in the coming years based on research it conducted examining the opportunities in African mobile money services in Africa.

The Nigerian market in particular is set for phenomenal growth, the Visa subsidiary reported. Currently, only 38 per cent of the country’s 160 million people have access to formal financial services while there are more than 93 million mobile phone subscriptions in Nigeria, the most in Africa. However, significantly more consumers surveyed in Nigeria said that they would like to use mobile money services to save money for their family (59 per cent) and pay utility bills (58 per cent).

In other news, a Nielsen report suggests that operators complaining about the strain mobile data is putting on their networks don’t actually realise how easy they have it. UK Android smartphone users access almost 80 per cent of their mobile data over wifi networks, according to the research. In a study of some 1,500 Android users with a metering app installed on their devices, Nielsen found that wifi offload varied considerably depending on the time of day, but averaged 78 per cent.

Android users appear to be using wifi for their mobile data needs most commonly just before going to bed, as wifi usage from Android users peaks every night between 11pm and midnight, Nielsen said. What on earth could they be doing?

Perhaps they’re busy gaming? It has to be said the Informer does enjoy a good round of Plague Inc. before lights out. For those familiar with the classic Pandemic, there’s nothing quite so satisfying as wiping out the global population with a well engineered virus, right? And if life ever does imitate art in this context, well the Informer knows that Greenland is the place to be, contrary to those fans of Madagascar. Although the Africa island does have a more appealing climate.

And gaming is a trend that presents a valuable revenue source for mobile operators. Under its Tigo brand, global operator group Millicom International Cellular is one firm aiming to grasp the opportunity by inking a deal with mobile games service provider and publisher Thumbstar Games. The deal covers various countries in Latin America as well as Africa. This week, the Informer received another press release from the gaming firm, entitled: “Thumbstar Games Announces Mediocre Games Signings”. It turns out that the firm hasn’t just signed up a couple of games that are admittedly a bit rubbish, but instead it has signed up a gaming distribution partner in Mediocre Games.

Staying on the topic of gaming, and the CEO at South African educational games developer Afroes, Anne Shongwe, took a platform speaking at AfricaCom to tell the region’s operators that they are not capitalising on an opportunity to foster entrepreneurial skills and provide opportunities to young people.

“We have had a lot of support from Nokia, and now Blackberry too; we are having very interesting discussions with them, but with mobile operators, it has been a struggle,” she said. “We are now beginning to get some support from SafariCom, but in general, with the operators it has been very difficult.”

Conversely Brazil is a nation that has vowed to do all it can to promote its local telcos. The Brazilian government will continue to require that a significant portion of telecoms network equipment is manufactured locally in a bid to create jobs and local wealth, the country’s minister for communications said at the Ericsson Business Innovation Forum in Sao Paolo this week. Paolo Bernado said that targets for wider deployment of broadband require sustained investment from both public and private sectors. As an example he pointed to more than 80,000 rural schools that must be given connectivity inside the next three years.

He said that, in Brazil, the state is responsible for over 50 per cent of investment in innovation and was committed to creating the right environment for continued private sector participation. In return, he said, the government expects technology developed locally to be available at a low enough cost to make connectivity across some of the most challenging geography in the world truly viable.

Following in the footsteps of Brazil, Finland’s third largest operator DNA, has made a show of support for domestic innovation as Finnish start up Jolla Mobile unveiled its Sailfish OS; a Linux mobile operating system based on the the abandoned MeeGo project.

Jolla was set up by a group of ex-Nokia executives aiming to design, develop and sell MeeGo-based smartphones. MeeGo is a free, Linux-based mobile operating system project that was first announced at Mobile World Congress 2010 by Intel and Nokia, but abandoned in 2011.

However, DNA has said that it will distribute handsets using the Sailfish OS upon its commercial launch. In addition, handset manufacturers will be able to licence and use the OS in a similar way that they currently do with platforms such as Android and Windows Phone.

Open source software developer Mozilla has also released a prototype version of its lightweight mobile operating system Firefox OS, which developers can run on Windows, Mac and Linux computers. Mozilla said that it is collaborating with OEMs and operators directly to give them more influence to meet the needs of their users and market. Users and developers aren’t locked in to one platform, so they can access their info and use apps across multiple devices.

Firefox OS will enable OEMs and operators to provide content and services across their entire device portfolio, regardless of OS, and they will be able to customise user experiences, manage app distribution and retain customer attention, loyalty and billing relationships, said Mozilla. The initial Firefox OS-based handsets are expected to arrive in 2013.

Meanwhile, Cisco has flexed its muscles and splashed its cash, announcing its intention to acquire privately held cloud management company Meraki for $1.2bn in cash.

The acquisition of Meraki complements the networking equipment vendor’s offerings with software that enables enterprises to centrally manage their network infrastructure from the cloud.

In other news, operators have been urged to take advantage of the low level of loyalty that SMEs have towards their CSP and satisfy their needs. More than 99 per cent of European businesses are SMEs, yet the vast majority plan to change telecoms service provider at the end of their contract period, according to research published recently by B/OSS specialist Comarch. The message is that the SME sector represents an enormous opportunity for CSPs to grow their revenues – but it is an opportunity they are not taking.

80 per cent of the respondents planning to change service provider at the end of their contract period for a variety of reasons, such as poor service quality; the inability of CSPs to resolve problems quickly and effectively; lack of clear pricing and well-designed tariff plans; as well as inaccurate charges.

Although all European CSPs said that they saw the opportunity in the SME space, 89 per cent admit they are currently not fully meeting the needs of SMEs, and 44 per cent say that SMEs have substantial unmet needs.

On the subject of unmet needs, here’s the opportunity to give a voice to your own.  The folks at Telecoms.com are embarking on an ambitious project to bring you the most in-depth and informative research on the state of the telecoms market today. The inaugural Telecoms.com Annual Industry Survey seeks to provide all of the views and trends that are most important to your business, and you can help by filling the survey and submitting your views. You might even win an iPad. Now you know it makes sense.

Take care,

The Informer

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