The Irish mobile phone market is worth €1.5bn and has more than three million subscribers, according to technology research firm iReach. Market growth in the coming decade is expected to come from Generation X, the key 17-25-year-old marketplace, however in order to successfully win over these high spenders operators will need to restructure existing mobile pricing practices.
Based on a survey of some 2,000 17-25 year olds, iReach expects this group to evolve into an interactive, high-spending customer base within a short space of time. By targeting Generation X, companies iReach says can align strategy to secure future revenues from this emerging customer base.
iReach’s Generation X survey reveals that O2 has a 36pc market share, or 5pc less than its overall market share, placing it between market leader Vodafone with 49pc market share and Meteor with a 15pc market share of the Generation X segment. Interestingly, Meteor’s share of this market is significantly higher in this core market than its overall market share of 9pc.
According to the iReach report, competitors in the Irish mobile market could reduce average revenue per user (ARPU) by 35pc. It illustrates this by pointing out that Telefonica Spain’s ARPU is €30 per month, whereas O2’s ARPU in Ireland is €47 per month. Last week it emerged that Telefonica is planning to buy the O2 group of companies for €26bn.
According to iReach the potential of Meteor, with Eircom as their new owners, and the expected competition from 3 and Clever Communications (both of whom have stated that large corporates are not their core markets) are also likely to force down ARPU in the Irish market, whch will also impact on the dominance of O2 and Vodafone as this market evolves.
“Essentially, Generation X is a core market for any public facing company with a long-term strategic plan,” states analyst Enda Kelly. “iReach believes the successful penetration of this market will be a key driver to the potential growth of all mobile vendors, a factor that must be addressed by incumbents if they wish to protect their investments.”
Kenny said he would expect the acquisition of O2 by Telefonica, coupled with the introduction of new service providers, as well as the maturing of trends in the key Generation X market to accelerate this reduction in ARPU through a restructure of the underlying mobile pricing practices in Ireland.
By John Kennedy