Operator group ranking, Q4 2010 - China Mobile top revenue-generating operator; mature markets continuing to drive mobile revenue

Mature markets such as Western Europe, USA, Japan and South Korea continue to generate the most revenue for mobile operator groups, according to a new GSMA Intelligence operator ranking study. European-based operator groups Vodafone, Telefonica, Deutsche Telekom and France Telecom all made the top ten, as did the four nationwide US operators. Operators in Japan and South Korea also scored highly in revenue terms despite having significantly fewer customers than most other groups in the ranking. By contrast, many large operator groups in emerging markets typically generate less revenue as they tend to operate in highly price-sensitive prepaid markets.

China Mobile was ranked number one in the list with revenue of US$19.9 billion in Q4 2010, a rise of 6 percent from a year ago. The operator maintains its leadership on the back of its huge customer base in China (it surpassed 600 million connections in Q1 2011), though ARPU has fallen over the year as its connections growth has concentrated on less affluent customers. Its 3G penetration also remains relatively low, with just 26.99 million customers using 3G terminals - equivalent to 4.5 percent of the total base in Q4.

Vodafone Group was ranked second both in terms of revenue and connections, the UK-based group's revenue rising by 1.6 percent to US$15.2 billion in Q4. The group is currently in the process of selling-off many of its minority assets in a bid to maximise shareholder value, offloading stakes in China Mobile, France's Vivendi and Poland's Polkomtel. However, it maintains its 45 percent stake in Verizon Wireless; the US market-leader ranked third on our list, turning over quarterly revenue of US$14.2 billion, up 4.8 percent year-on-year.

Verizon Wireless' domestic US rivals are also ranked highly. Its closest competitor AT&T is ranked fourth with revenues rising 9.6 percent year-on-year, while US number three Sprint is ranked at #10. The fourth-placed US operator, T-Mobile USA, is owned by Deutsche Telekom, which was ranked number seven despite group revenue dropping 6.9 percent. However, revenue from its US unit grew over the year. The group's revenue decline was due mainly to the removal from Deutsche Telekom's books in 2010 of Everything Everywhere, its UK joint venture with France Telecom (the French firm - ranked number eight - had removed the asset prior to the year-ago period so did not see a similar revenue impact).

Many of the large European operators blamed negative regulatory developments (notably reductions in mobile termination rates), fierce competition and a weak macro-economic environment across the Eurozone for declining revenue. In many of these highly-penetrated markets, operators are also required to invest heavily in customer retention and subsidies.

Fifth-placed Telefonica was one of the few operator groups to benefit from a significant revenue boost from its emerging markets, with its buy-out of Brazil's Vivo last year largely responsible for a 32.9 percent increase in revenue in Q4. On an organic basis (with the Vivo contribution excluded), the Spanish-based group would have increased revenue by 3.2 percent year-on-year.

Japanese market-leader NTT Docomo is ranked number six on our list, while its domestic rivals KDDI (#11) and SoftBank Mobile (#13) also make the ranking. SoftBank recorded revenues of US$4 billion in Q4, up 14 percent, despite a customer base of just 24.4 million (the lowest in the top 20). SoftBank Mobile claims to be the first operator in the world to generate more than 50 percent of ARPU via non-SMS data services. Similarly, South Korea's largest operator SK Telecom (#18) also benefited from operating in a mature market, making our list despite a low connections base of 25.7 million.

Large operator groups that are not present in these key mature markets did not rank highly in terms of revenue even though they often serve many more customers. Latin America-focused America Movil is the third-largest operator group in terms of total connections but only ranked number nine in terms of revenue; Africa-focused MTN is ranked number eight in terms of connections but only #14 by revenue. The biggest example of this trend is Bharti Airtel; the Indian-based operator expanded into 16 African markets in 2010 and grew revenues by 63.6 percent year-on-year in Q4. However, Bharti is ranked only #17 in our list despite a connections base of almost 200 million.

Mobile operator group global ranking by revenue, Q4 2010
Source: GSMA Intelligence, company data

¹ Connections and revenue are aggregated as the sum of each group's subsidiaries where a minimum of 50% plus one share economic interest is held
² Revenue growth from Q4 2009, calculated at the Q4 2010 spot rate to USD to eliminate exchange rate effects
³ Revenue weighted by connections to adjust for fixed-line operations in certain geographies
⁴ Revenue growth N/A due to Telmex (fixed-line) merger
⁵ Revenue includes (minority) fixed-line operations