Eastern Europe Harnesses LTE to Boost ARPU and Innovate
Published on: 16th Apr 2014
Note -- this news article is more than a year old.
Mobile service revenues in Eastern Europe grew 4.3% year on year (YoY) in 4Q 2013 as 4G LTE subscriber adoptions continued to gather pace. At the end of December 2013, there were 9.84 million LTE subscriptions in the region (up 410% YoY).
"These upgrades in mobile subscriptions helped to prop up, and even boost, the monthly average revenue per user (ARPU) in a number of countries in the region," commented Jake Saunders, VP of core forecasting at ABI Research. "The weighted monthly ARPU in Eastern Europe grew 2% YoY to US$ 9.51. Previously it had been on a downward slide."
"ARPU will continue to grow in 2014 but in the longer term it will erode steadily as competition sinks its teeth into LTE pricing. There is strong LTE mobile subscription upgrade growth in Eastern Europe as a number of countries such as Poland, Russia, the Czech Republic, etc. have benefited from greater discretionary spending on smartphones by consumers and businesses," added Saunders.
In 2008, total data service revenues were just US$ 7.58 billion, of which messaging constituted 50%. By the end of 2014, total data service revenues will have ballooned to US$ 18.3 billion, for a 32% share of overall mobile service revenue. A burgeoning installed base of 4G LTE subscriptions will further stimulate mobile data revenues to US$ 22.5 billion by 2019. However in the same period, mobile carrier generated messaging revenue will dwindle to US$ 3.97 billion.
"LTE is priming innovation in a number of Eastern European markets. For example, in Russia, Yota has evolved from being a WiMAX pioneer to a mainstream LTE service provider that supports wholesale LTE services for other Russian carriers as well as introducing its own novel smartphone. The YotaPhone, with its front and back LCD and e-Ink handset has helped to differentiate the profile of Yota in its domestic market but it is also been able to sell the YotaPhone into a number of non-competing markets, such as the UK and India, that help build economies of scale," continued Saunders.