2008 European - Mobile Voice Market

Consumers have benefited from regulated roaming and interconnection tariffs and from competitive pricing pressure from numerous MVNOs and resellers. Operators have responded to lower voice and data revenue by encouraging consumer use of mobile data. Some mobile applications have failed to take off, though music downloads, location-based services and a rage of other services such as mobile banking will provide increasing promise in coming years.

Mobile broadband will have continued phenomenal growth in 2009, and by 2010 its fuller potential will show as the first networks based on LTE technology become commercial. The extraordinary growth in Europe’s 3G subscriber base will continue in coming years as consumers take advantage of faster networks and flat-rate charging models.

The report presents statistics for Europe’s key mobile markets, including an assessment of emerging technologies and consumer trends. An overview of the national market conditions provides the necessary background to evaluate how this key market will progress to the end of the decade and beyond.

Austria’s mobile market is fiercely contested by four network operators and a growing number of MVNOs and resellers. The competitive environment has led to relatively low ARPU for operators and some of Europe’s lowest tariffs for consumers. The four 3G networks have seen impressive growth in subscriber take-up, largely at the expense of existing GSM offerings. The incumbent’s mobile division, mobilkom, has expanded to Eastern Europe to incorporate lucrative neighbouring markets. Mobile Internet has shown extraordinary growth in recent years though mobile TV, reaching 60% of the population by early 2009, has yet to make a mark on consumers. Austria was also the first country in Europe to deploy mobile VoIP on 3G networks.

Finland has one of most innovative mobile markets in Europe. The country was a pioneer in developing 3G, and was the first to deploy 3G over 900MHz spectrum; Finland was also the first to build a 450MHz digital mobile network. Growth in the sector continues to be strong despite high mobile penetration. In early 2009 the 3G made up nearly a third of the total subscriber base, while mobile broadband has also grown considerably during the last two years. In addition, the country boasts the lowest mobile call charges of all EU Member States.

The German mobile market remains the largest in Europe. Mobile penetration has caught up with the EU average, while in common with most markets the main area of growth is in the 3G sector. The market is dominated by T-Mobile and Vodafone, while an increasing number of resellers has fuelled competition and placed pressure on tariffs, resulting in lower ARPU. Regulatory pressure on termination tariffs and voice roaming has encouraged operators to step-up their development of data applications to improve profits.

Italy

Italy’s vibrant mobile market is supported by a large population keen to adopt new technologies. The popularity of multiple-SIM use has led to a mobile penetration rate far above the European average. The market is dominated by three operators, while a fourth, 3 Italia, has struggled to make a profit or significantly expand its customer base. All four providers operate 3G networks, while investments in network upgrades have provided rich opportunities for mobile data use among consumers. A trial SCDMA network launched in late 2008 has added to the mix.

Competition between the three main mobile players in Spain has driven down the cost of calls by 20% since 2004. About a dozen MVNOs had been launched by early 2009, further intensifying price competition. The 3G market has also seen great changes, including the launch of services from Xfera and the release of 900MHz frequencies for 3G services.

An innovator in the mobile sector, Sweden was the first country in Europe to have UMTS networks across all major operators. Slower subscriber growth in recent years, due to market saturation, has been enervated by greater consumer take-up for mobile data services, made possible by significant investments in HSPDA networks. The analogue network was shut down in mid-2007, while the 450MHz frequency has been switched to digital use to provide a national mobile broadband service. Strong competition among network operators has led to falling call prices and ARPU, not yet compensated for by data use. The digital 450MHz network operated by Nordisk Mobiltelefon provides almost nationwide coverage.

The UK

The UK’s mobile market is served by five major providers which have all launched 3G services, as well as by a growing number of low-cost MVNOs. The market is characterised by new developments in advanced data services such as mobile TV, the bundling of mobile as a quad-play service, and regulatory controls on charges and fees. Mobile penetration approached 130% by early 2009, yet subscriber growth remains strong as consumers adopt additional SIMs as well as business-oriented devices such as the BlackBerry and iPhone. Fierce competition has forced operators to concentrate on packaging service bundles and line service promotions, and explore applications such as mobile searching and advertising facilities. ARPU has been relatively stable for all operators, with growing mobile data use offsetting lower voice, interconnection and roaming tariffs.