2008 European - Mobile Data Market

The increasing demand for mobile broadband across the region is based on a solid foundation of fast networks built by mobile network operators during the last few years.

The Long-term evolution networks expected to be opened during 2010, and the potential release of digital dividend spectrum by 2012, will further develop the enormous potential for mobile data in Europe, and greatly encourage ongoing fixed-mobile substitution. Gaming, video and music portals are available from many operators, while the proliferation of flat-rate plans will encourage a greater number of 3G subscribers to use high-end data services in coming years.

Some key mobile data services such as mobile TV remain unconvincing propositions for many consumers, while operators and content providers struggle to develop profitable and popular business models for their service offerings. However, the release of spectrum and the availability of handsets receiving conventional digital terrestrial TV could be a watershed for mobile TV take-up during 2010.

As in Western Europe, mobile data is the born-again growth opportunity for Eastern Europe’s mobile industry. Voice penetration across the region is at or near saturation levels and mobile operators are looking to extract concrete value from 3G network investments made in previous years. Hence operators are increasingly turning their focus to mobile data and, more specifically, mobile broadband tied to affordable rate plans and bundled offers, often in conjunction with financing to improve affordability for a notebook or netbook computer. The challenge for operators will be encouraging mobile data usage among first time users. A number of mobile content and application offerings have been launched, though widespread success of such initiatives is yet to be seen.

Key highlights:

Austria

Austria is a pioneer in mobile TV in Europe. Based on the DVB-H standard, the infrastructure was built by Media Broadcast with the involvement of network operators, each of which have access to the DVB-H network for reselling in addition to their own 3G networks. 3 Austria alone had some 90,000 mobile TV subscribers in February 2009. Mobile broadband is also very popular, with subscriber numbers expected to reach 1.2 million by the end of 2009. The boom in mobile broadband will have considerable implications for fixed-line broadband in coming years as an increasing proportion of consumers switch to mobile-only plans.

Germany

The German mobile data market rests on Europe’s largest mobile subscriber base. The number of 3G users is expected to grow 75% in 2009, reaching about 20 million, or about 18% of all mobile subscribers. Further technological developments will continue to stimulate take-up, but operators will need to address high data prices which have thus far served as a brake on 3G’s potential. The volume of mobile data traffic is expected to double in 2009 and perhaps triple in 2010 as network coverage is expanded and transmission rates are increased to a base of 7.2Mb/s. T-Mobile reported a considerable increase in data traffic in 2008 following its launch of the Apple iPhone, while Google Android platform will also contribute to higher mobile data use in coming years as a greater number of handsets become available. T-Mobile is also likely to deploy one of Europe’s first networks based on LTE. The country’s failed mobile TV platform may be resuscitated in 2009 by mobile network operators combining to develop a business model based on terrestrial digital broadcasts.

United Kingdom

The UK has one of the largest mobile data markets in Europe, worth about £16 billion in 2008 or more than half of the total retail market for telecom services. With 3G coverage provided to some 98% of the population, mobile network operators have a large and receptive consumer pool to make use of the extensive services based on HSPA technology. Most operators offer affordable flat rate plans, such as the 15GB offer from 3 Business for £30 per month. Operators have also exploited the mobile UGC market, including the LookAtMe service from 3 and O2. T-Mobile’s Web’n’Walk is also aimed at increasing data usage and revenue. Music downloads, mobile banking and other services will continue to prop up 3G usage and operator ARPU.

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

The following notes provide some background to our scenario forecasting methodology:

·         This report includes what we term scenario forecasts. By describing long-range scenarios we identify a band within which we expect market growth to occur. The associated text describes what we see as the most likely growth trend within this band.

·         The projections shown in the tables in this report are based on our own historical information, as well as on telecommunication sector statistics from official and non-official, national and international sources. We assume a possible deviation of 15-20% around this data.

·         All statistics for GDP, revenue, etc are shown in US$, in order to maintain consistency within and between markets. At the same time we acknowledge that this can introduce some irregularities.