Half the world has now been connected, marking an important milestone for the global information and communication technology (ICT) industry; however, global retail telecommunication revenues are lagging, owing to greater market maturity.

Global retail telecommunication revenues reached $1.7-trillion in 2016, representing 2.3% of global gross domestic product (GDP); however, impacted by greater market maturity levels, the sector experienced sluggish performance between 2014 and 2016.

The latest International Telecommunications Union (ITU) ‘Measuring the Information Society Report 2018’ reveals that telecommunication revenues in 2016 represented on average 3% of GDP in Africa and the Arab States, 2% in Asia and the Pacific and the Americas, excluding the US and Canada, and less than 2% in the Commonwealth of Independent States and Europe.

However, global retail telecommunication revenues declined by 5%, as mobile-cellular penetration crossed the 100% mark in 2016.

“As mobile becomes ubiquitous across most regions, growth in mobile revenues is stalling. Globally, mobile revenues declined by 7% between 2014 and 2016, from $924-billion to $859-billion,” says ITU secretary-general Houlin Zhao.

In the developing world, mobile revenues declined 10% between 2014 and 2016, compared with a 5% drop in the developed world.

Further, during the period under review, the global increase in data revenues, at $70.2-billion, was lower than the loss of $114.6-billion recorded in voice revenues.

“In fact, Asia and the Pacific and the US and Canada were the only two regions in which the increase in mobile data revenues during the period was greater than the loss in voice revenues,” he says.

Globally, the number of SMS messages halved between 2014 and 2016, from six-trillion text messages in 2014 to just under three-trillion in 2016.

This resulted in a decline in SMS revenues from $82-billion in 2015 to $75-billion in 2016 – a trend that is expected to continue.

With financial pressures and intensifying competition, service providers are forced to transform their business models to look for new revenue streams amid the growth of the Internet of Things (IoT) and machine-to- machine communications.

This is expected to help offset declining revenue trends in core business segments.

“As IoT revenue and investment opportunities are scaling up, certain enablers, such as Artificial Intelligence, Big Data analytics and Blockchain, are gaining momentum,” explains Zhao.

“These emerging solutions are helping businesses to boost revenues, lower their cost base, and gain in efficiencies and competitive edge, while laying the foundation for smart societies.”

The ICT sector remains characterised by large infrastructure investments, with growth in telecommunication capital expenditure (capex) driven largely by data demand in developing economies – where mobile-broadband penetration remained below the 50% mark in 2016.

Globally, the telecommunications capex went up by 4% between 2014 and 2016, from $340-billion in 2014 to $354-billion in 2016.

Investments in developing economies are largely driving this growth, with capex increasing by $23.5-billion during this period, compared with a $10-billion reduction in the developed world.

There continues to be a general upward trend in the access to and use of ICTs, and the world has crossed the halfway line in terms of Internet use, with 51.2% of the world population using the Internet by the end of 2018.

In developed countries, four out of five people are online, reaching saturation levels; however, in developing countries there is still ample room for growth, with 45% of individuals using the Internet, say Zhao.

In the world’s 47 least-developed countries, Internet uptake remains relatively low and four out of five individuals, or 80%, are not yet using the Internet.