Page 75 - SAMENA Trends - January 2020

WHOLESALE UPDATES SAMENA TRENDS

Wholesale Carriers Terminated Approximately 327 Billion Minutes in 2018

Many retail service providers, such as continues to drive wholesale’s relative wholesale traffic, but 12% of wholesale
mobile operators, MVNOs, and cable growth. Declining wholesale prices revenues ($1.6 billion). Wholesale
broadband providers, rely heavily on stabilized in 2015 and have inched up revenues are bolstered by a select set of
wholesale carriers to transport and ever since. This had resulted in a modest low-traffic routes with stubbornly high
terminate their customers’ international increase in wholesale revenues between prices. Wholesale revenues are bolstered
calls. Wholesale carriers terminated 2016 and 2017. But 2018’s drop in by a select set of low-traffic routes with
approximately 327 billion minutes of wholesale volumes wiped away that gain. stubbornly high prices. For example, the
traffic in 2018, down 3% from 2017. While As a result, revenues dropped last year to France to Tunisia route accounts for just
wholesale traffic declined in 2018, over the $13 billion, below the 2014 peak of $14.4 0.3% of international traffic, but, at $0.37
last 10 years it has seen a compounded billion. Wholesale operators make the per minute, it provides 3% of all revenues.
annual growth rate of 3%. Consequently, bulk of their revenues in only a handful Thanks to low termination prices in
the ratio of international traffic terminated of regional markets. Africa, for example, Mexico, the U.S.-Mexico route serves as
by wholesale carriers increased from received 9% of the world’s wholesale a converse example: that massive route
59% in 2008 to 72% in 2018. Traffic to traffic, but accounted for 34% of wholesale represents 7% of all international traffic
mobile phones in emerging markets revenues ($4.4 billion.) Countries in the in the world, but only 0.4% of wholesale
has historically spurred expansion of Middle East accounted for 6% of world carrier revenues.
the wholesale market, and that demand
continues to drive wholesale’s relative
growth. In 2018 wholesale carriers
terminated 86% of traffic to Sub-Saharan
Africa, Central Asia, and South America,
but only 54% of traffic to Western Europe.
Revenues on calls to sub-Saharan Africa
grew 26% between 2011 and 2018, $2.4
billion to $3.0 billion. Conversely, revenues
on calls to Western Europe fell substantially
from $1.2 billion to $900 million.
Consequently, the ratio of international
traffic terminated by wholesale carriers
increased from 59% in 2008 to 72% in
2018. Traffic to mobile phones in emerging
markets has historically spurred expansion
of the wholesale market, and that demand

Three New Trends in Voice Pricing

Until 2015, international carrier voice traffic call volumes have slumped with no end decreased from $99 billion in 2012 to
had increased in each of the previous 60 in sight. International carriers had already $70 billion in 2018.
years. But for the past four years, paid suffered from revenue stagnation due • Retail prices were essentially unchanged
to slow traffic growth and falling prices. in 2018, at about $0.15 per minute.
The unprecedented occasion of outright Unfortunately, we anticipate that traffic
traffic decline, however, marked a new loss will overwhelm this recent price
and depressing turning point. In reviewing stabilization, and that revenues will
developments from the past year for our decline by a forecasted 9% in 2019.
freshly-updated TeleGeography Report • At current run rates, international service
and Database, three major pricing trends revenues will fall to $50 billion by 2024.
stand out: If that trend holds true, revenues will
• Retail international call revenues have declined by nearly half of the $99
peaked in 2012, and have been on the billion total in the 10 years after 2012.
decline ever since. Retail revenues have

75 JANUARY 2020