Mobile market to reach EUR198bn by 2011,

Analysys: The Western European mobile market is forecast to grow by more than 6% per year to reach EUR198.4 billion in 2011. With mobile penetration close to saturation, growth will primarily be driven by rich-media services including music and television.

We are now seeing a rapid acceleration in the number of full-track downloads and in streamed TV usage. 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 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.

Fxed–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.

• total mobile services revenue is forecast to grow at a compound average growth rate of 6.2% from EUR138.4 billion in 2005 to EUR198.4 billion in 2011
• active mobile penetration in Western Europe was 96.2% at the end of 2005 and is forecast to grow to 108.8% 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
• ARPU levels have now bottomed out and will continue to recover, rising by 20% from EUR31.3 in 2005 to EUR37.5 in 2011.

The Western European Mobile Market: trends and forecasts 2006–2011 Publ 20060622