2007 Western European Mobile Data Market

Publication Overview

This annual report offers the latest data, statistics and analysis on the Mobile Data market in Austria, Belgium, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Malta, The Netherlands, Luxembourg, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. Subjects include:

• Revenue and ARPU forecasting;
• High-speed data technologies;
• Infrastructure developments;
• Mobile TV deployments;
• Spectrum issues;
• Consumer use of services.

Executive Summary

This European market report covers recent developments in the region’s rapidly evolving mobile data sector. During 2007 most European mobile operators deployed or expanded EDGE and HSDPA networks in a bid to encourage consumer use of mobile broadband services and increase data ARPU. The number of content providers and the range of services on offer has expanded, making consumer involvement in mobile data a more likely proposition during the next few years. The European Commission suggested imposing regulatory limits on data roaming tariffs during 2008, which will dent operator revenue. Operators nevertheless still face a number of challenges - while gaming, video and music portals have been transferred to the mobile arena, and subscribers have become more aware of the capabilities of 3G services, they are also wary of the high usage costs - some operators, such as 3 and TeliaSonera, have introduced flat-rate data charging models to overcome consumer reticence about high charges. SMS still accounts for the bulk of data revenue, while less than 20% of subscribers use MMS/picture messaging and fewer still make use of mobile Internet and mobile TV despite numerous launches and promotions. The report presents the latest statistics for mobile data services such as SMS, MMS, and i-mode, assesses the adoption of emerging technologies, and evaluates mobile TV standards and business models. An overview of operators, national markets and trends provides the necessary background to assess how this important market will progress to the end of the decade. The report includes the following markets, among others:

Austria

Austria has a full complement of advanced mobile data technologies, including HSDPA networks providing 95% geographic coverage. Subscribers to mobilkom austria had the fastest mobile broadband speeds available in Central and Eastern Europe when the system was rolled out in early 2007. In September 2007 the operator launched a prepaid mobile Internet service. It also launched its HSUPA service in March 2007 in Vienna, becoming the first in Europe to integrate HSDPA 7.2 and HSUPA into its network. Mobile TV is offered by T-Mobile, mobilkom austria and the broadcaster ORF, while the regulator in September 2007 opened DVB-H license applications with a view to launch services in time for the Euro 2008 football tournament, which takes place in Austria and Switzerland. For the country overview, see chapter 2, page 17.

Finland

Finland has one of the world’s most progressive mobile markets, and has been the launching pad for a number of innovative services. In 2007 the country became one of the first in Europe to launch an HSUPA network, while Elisa was the first operator to open a commercial 3G network based on the 900MHz band. Finland was also at the forefront in EDGE deployment as well as Flash-OFDM based mobile broadband wireless technology providing coverage in remote areas. The people are aware of emerging mobile services, and have been at the forefront of services such as mobile ticketing systems for public transport. The country has also progressed well with UMA, converging wireless broadband Internet with mobile services. The regulator estimated that there were 355,000 mobile broadband subscriptions and other fixed priced data packages in June 2007. For the country overview, see chapter 5, page 29.

Germany

The German mobile data market has enormous potential for growth. The four network operators have invested heavily in upgrading networks to meet growing demand for higher bandwidth mobile data services, while the regulator has anticipated future growth by preparing for fresh UMTS licences in 2008 with additional spectrum, and has begun a frequency assignment procedure for mobile TV services. The number of 3G users reached nearly eight million by mid-2007, representing more than 9% of all mobile subscribers and a year-on-year growth of 384%. Four operators have built HSDPA networks, while in November 2007 T-Mobile secured exclusively marketing in Germany for Apple’s iPhone, based on its EDGE network. For the country overview, see chapter 7, page 42.

Italy

In common with many mobile operators in Europe, Italian mobile operators in 2007 began to switch charging for data services from the per-volume model to a flat rate model. Up to 2GB of data can be used without incurring the government concession tax charge, which is refunded to customers as a bonus in traffic. HSDPA has been successful in Italy, with TIM’s network providing 70% of the population with 3.6Mb/s downloads. In October 2007 the operator contracted Huawei to build an HSUPA network covering Southern Italy and providing data at up to 7.2Mb/s. i-mode is available from Wind, while the Vodafone live! portal had nearly six million subscribers by the end of 2007. Mobile TV also showed further promise in 2007, with TIM TV reaching about 75% of the population and 3 Italia reporting 770,000 subscribers to its nine Walk TV packages by October 2007. For the country overview, see chapter 10, page 57.

Spain

Mobile providers in Spain have invested huge sums in building networks to support HSDPA, promising speeds of up to 14.4Mb/s in coming years from the maximum 7.2Mb/s achievable in 2007. Given that Spain’s fixed-broadband subscribers have relatively slow data speeds, HSDPA has an impressive advantage. Since 2006 3G has accounted for the majority of net adds, as well as migration from GSM, but the high cost of data has prevented consumers from making full use of the technology and services available. By early 2007 there were about 325,000 mobile broadband users in Spain. Three mobile operators have presented a common front to bid for a DVB-H licence, fearing that the government could turn to a neutral broadcaster, as happened in Finland. Cooperative agreements were also reached between Telefónica Móviles, Vodafone and Orange in 2007 providing users with open access to mobile Internet. For the country overview, see chapter 16, page 74.

Sweden

TeliaSonera’s UMTS coverage in 2007 was effectively 100%. To develop mobile broadband the regulator proposed continuing investment in EDGE and HSPA technologies, as well as a mix of measures such as technology- and service neutrality, refarming 2G spectrum, issuing licenses in the 2.6GHz and 3.6-3.8GHz bands, and government funding for infrastructure. Mobile TV is provided by TeliaSonera, H3 and Tele2. For the country overview, see chapter 17, page 78.

The UK

Operators including H3, Vodafone and Orange have introduced innovative pricing and usage models which have substantially increased consumer use of mobile data, making effective use of the high-speed HSPA networks which have been built out during the last two years. By mid-2007 3G coverage was provided more than 90% population, and almost half of mobile subscribers owned an Internet-enabled phone. In October 2007 Ofcom proposed opening up the 900MHz and 1800MHz spectrum bands for 3G to encourage the launch of new services and increase competition. For the country overview, see chapter 19, page 87.

Data in this report is the latest available at the time of preparation and may not be for the current year.

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