knowledge centre

IFRS 15: eliminating the impact of mobile subsidies sheds new light on mobile service revenue trends

Alex Boisot Research Analyst

"Adjusting our revenue data for IFRS 15 has resulted in a more faithful representation of historical performance, free of distortions created by handset subsidies."

A new perspective on mobile service revenue

The IFRS 15 accounting standard was adopted at the start of 2018, and has resulted in the majority of operators around the world needing to re-evaluate the methodology used to calculate revenue. Mobile service revenue has been affected the most, especially in advanced economies with a high concentration of postpaid subscribers and a large volume of subsidies for mobile handsets. This change also generated a discontinuity in our historical revenue data. This comment explores the solution that we have adopted to resolve this problem, as well as the implications of the resulting shifts in the historical revenue trends. We show that not only do the new data offer a less distorted view of the market, but also that they reveal a healthier prognosis for the mobile segment than had previously been assumed under the old accounting standard.