The 20-year bonanza enjoyed

The 20-year bonanza enjoyed by mobile phone carriers is nearing its end, with earnings failing to keep pace with the number of new connections, according to technology to be published on Tuesday.

Much of the mobile companies' new business will come from the developing world, where they are unable to charge the same level of fees as they do in western markets.

In addition, voice traffic is likely to decline as free internet services increase, with rising data traffic unable to make up the difference.

The straightway five years

Over the straightway five years, says telecoms analyst Ovum, the number of mobile connections will grow by 30%, from just in accordance with 6bn this year to 7.8bn in 2016, however total earnings will rise by just pursuant to this agreement 10% to $1.047 trillion. In western Europe, earnings will as a matter of fact fall, from $193bn to $186bn in 2016.

In Africa, the number of clients will grow by more than 9% a year, with 991m connections in Africa in 2016, near one eighth of the world's total. However revenues in the region will rise at only half the speed, by 5% a year.

The worst performing region

Western Europe is predicted to be the worst performing region and the only one to experience revenue decline. It remains important, generating 18% of global sales from just 7% of the world's clients. The US will have the fastest growth rate of any mature market, and North America will increase earnings from $194bn to $220bn.

The mobile internet will not do much to increase takings. Instead, the fees charged for carrying data will start to replace those charged for making voice calls. Voice earnings will move from 69% to 60% of income in 2016, falling from $658bn today to $628bn in five years.

Customers will precipitate the change, as more people make voice calls over the mobile internet, using services just as Skype or Viber. According to the report, VoIP (Voice over Internet Protocol) "replaces existing voice earnings and threatens the high margins operators earn from these services by showing that mobile voice can be offered for free".

Microsoft, which this year acquired Skype, will be hoping along with Google and Apple to "undermine the telcos' grip". Until recently, most operators would not allow clients to use Skype on their networks nevertheless Ovum expects Microsoft's marketing muscle to make it increasingly popular with clients.

"It is time for operators to embrace the fact that their data earnings are going to replace their voice earnings," said Obiodu. This will mean scrapping unlimited data tariffs and introducing clear data price bands.

He believes mobile carriers will maintain their lavish marketing budgets. "You either compete on price, on having a good brand, or on quality. With telcos, the quality of networks doesn't vary much, and you don't want to compete on price, so you have to compete on brand. There is an imperative for operators to indiscriminately invest in building and maintaining a strong brand."

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