Arthur D. Little and Exane BNP Paribas: 4G LTE is a must-have but won’t be enough to restore pricing power in European mobile industry

Moving to 4G LTE is a no-brainer for European telecoms operators but is unlikely to restore better pricing conditions in the European mobile industry. This is the key finding of 4G – going faster, but where?, the 12th edition of the joint annual telecoms report from global management consultancy Arthur D. Little (ADL) and equity broker Exane BNP Paribas. For European operators moving to 4G LTE makes solid business sense. Driven by data-hungry consumers, 3G networks will soon hit a “capacity wall” and 4G LTE provides the ability to surmount this. Operators can also expect customers to adopt the higher speed and lower latency of 4G quickly and can count on a good line-up of compatible smartphones and tablets, leading to 54% penetration of 4G-enabled devices by 2016. However, the report concludes that mobile operators will face a strong challenge in monetizing 4G LTE data with limited opportunities to create sustainable differentiation. It models revenue decline of -1.8% compound annual growth rate (CAGR) for European telcos through to 2016. The sector could return to growth if LTE smartphones generated data average revenue per user (ARPU) of EUR17/month by 2016. However, as this is EUR7 higher than today’s figures for 3G smartphones, it represents quite a stretch. Overall ADL identifies five main levers for operators to improve their outlook which it elaborates on in the full report: 1. new tariff structures 2. partnerships to develop new services 3. cost transformation 4. small cells & WiFi offload 5. network sharing “4G will be a commercial success in Europe but is unlikely to restore pricing power in the industry,” said Didier Levy, Director of Arthur D. Little’s Telecommunication, Information, Media and Electronics (TIME) practice. “To deliver business growth there are a number of innovation areas European operators should focus on, including introducing shared data plans which are already successful in the US.” “Mobile challengers with large spectrum assets and a lean cost structure and integrated fixed-mobile players are well placed,” added Antoine Pradayrol of Exane BNP Paribas. The report is based on discussions with 91 companies in the telecoms-media-technology (TIME) sector across 15 countries. For further information, please visit

Notes for Editors

About Arthur D. Little

Founded in 1886 as the world’s first consulting firm, Arthur D. Little has continually transformed business thinking and practice by applying its expertise in the areas of strategy, technology and innovation. Today, Arthur D. Little helps companies to create growth, overcome strategic challenges, improve innovation capabilities, and increase efficiency and competitiveness in a globalised marketplace. Arthur D. Little has a global footprint in 20 countries with a network of over 1,000 people.

Further Information

Contacts: Rob Hickling / Cate Bonthuys
Say Communications
Tel: +44 (0)20 8971 6400