The western European mobile market is forecast to grow by more than 6pc a year from €138.4bn to reach €198bn in 2011, according to a report from Analysys. Mobile growth will be driven by rich media services such as music and television as mobile penetration saturates the market.
Active mobile penetration in western Europe was 96.2pc at the end of 2005 and is forecast to grow to 108.8pc by 2011, driven by operators’ efforts to penetrate under-served customer segments like older demographics.
Growth will also be driven by increased ownership of multiple SIM cards and more machine-to-machine communication.
Mobile music and mobile TV are vital for future earnings by mobile telcos, the report states. “We are now seeing a rapid acceleration in the number of full-track downloads and in streamed TV usage,” said report author Dr Windsor Holden.
“Subscribers are becoming more familiar and comfortable accessing both on- and off-portal content; as mobile broadband becomes more prevalent this growth is likely to continue.” Holden added that the longer-term prospects for voice revenues are also encouraging.
Average revenue per user (ARPU) levels have now bottomed out and will continue to recover, rising by 20pc from €31.30 to €37.50 in 2011.
“Although voice ARPU has been adversely affected by falling termination rates and aggressive pricing strategies, this trend is forecast to reverse from 2007 as 3G adoption increases,” added Holden. “Operators are beginning to take advantage of 3G’s greater capacity to offer lower-cost bundles, thereby accelerating fixed-mobile substitution.”
By John Kennedy