TV and music will fuel continued growth in saturated European mobile market, says Cambridge report
The Western European mobile market is forecast to grow by more than 6 per cent per year to reach £136.5bn in 2011, according to a new report The Western European mobile market is forecast to grow by more than 6 per cent per year to reach £136.5bn in 2011, according to a new report from telecoms, IT and media advisers, Analysys.
With mobile penetration close to saturation, growth will primarily be driven by rich-media services including music and television, the report says.
Amazingly, it also predicts that market penetration will exceed 100 per cent in the future. Active mobile penetration in Western Europe was 96.2 per cent at the end of 2005 and is forecast to grow to 108.8 per cent by 2011, driven by operators’ efforts to penetrate under-served customer segments, such as older demographics, as well as by increased ownership of multiple SIM cards and more machine-to-machine communication
“We are now seeing a rapid acceleration in the number of full-track downloads and in streamed TV usage,” says 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 adds that the longer term prospects for voice revenues are also encouraging.
“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,” adds Holden. “Operators are beginning to take advantage of 3G’s greater capacity to offer lower-cost bundles, thereby accelerating fixed-mobile substitution.”
The report concludes that fixed-mobile convergence has emerged as a key strategic challenge for mobile operators. “While it is likely to further encourage fixed-mobile substitution, fixed operators’ moves towards converged technologies will also result in greater competition within the mobile market,” said Holden.