There are growing signs of strain even in mobile service provider operations in Europe, it now appears, with one big problem being an apparent massive rate of consumer defection from use of text messaging services.
Telefonica‘s revenue from European operations during the first quarter of 2012 was down 6.6 percent, following a dip of seven percent in the fourth quarter of 2011. Telefonica’s revenue in Spain was up slightly, following a slight dip in the fourth quarter of 2011.
The bright spots came in Telefonica’s Latin American operations and mobile data services. In Spain, Telefonica’s fiber to the customer network now passes about 15 percent of homes. The important test will be the ultimate adoption of fiber access and its impact on churn, profit margin and gross revenue, of course.
Telefonica’s first quarter 2012 report might indicate that even mobile services are not immune from economic troubles, and might also indicate a significant current impact from over the top messaging alternatives, according to a report in Forbes.
Spain’s economy is contracting sharply, with consumer spending falling by double digits. That seems to be putting pressure on uptake of mobile broadband services and could be leading consumers to abandon carrier-provided text messaging services as well.
WhatsApp Messenger, for example, is the number-one paid app downloaded by consumers in scores of countries. In fact, some might speculate that 2012 will be a watershed year, an inflection point for consumer use of carrier-provided messaging in many countries.
Spanish mobile revenue declined by -10.7 percent year over year. That might be a signal as well. To be sure, the severe and apparently growing economic and financial crisis in Spain arguably is a huge driver of consumer behavior, but the shift in text messaging behavior might be something more.