The latest report from consultants Analysys says that Italy, Sweden and the UK all had more mobiles than people at the end of 2004 and the remainder of Western European countries are set to hit this milestone within two years. The report forecasts that mobile penetration overall will grow from 90% in 2004 to 98% in 2006 and will exceed 100% by 2007 as users go in for multiple phones and SIM cards, particularly with the advent of 3G.

Interestingly the report (‘The Western European Mobile Market: trends and forecasts 2005-2010’) says that, despite this strong growth, penetration has stagnated in some of the markets in which operators have placed significant emphasis on converting customers from pre-paid to contract in a bid to stabilise ARPU.

“In countries such as France and Germany operators have an opportunity to increase penetration by marketing pre-paid offerings, which is often the best way to attract certain segments of the population, but they should notlose sight of profitability ”, says Alex Zadvorny, co-author of the report. “Italy, where ARPU has been in line with the Western European market average and registered the slowest decline among the major European countries between 2000 and 2004, is a good example of how the prevalence of pre-paid does not necessarily suppress ARPU.”

Voice ARPU in Western Europe is expected to stabilise, and, if operators take the right steps to gain maximum advantage from the data service opportunity, mobile service revenue is forecast to grow strongly at an annualised rate of 9% between 2004 and 2007.

“With the advent of 3G, operators have an opportunity to stabilise and potentially even grow voice ARPU by using the efficiency of the technology and offering large bundles of minutes”, says Zadvorny. “At the same time, in order to take advantage of the mobile data services opportunity, operators need to address factors such as transparency of pricing, standardisation and ease of use of devices, and the implementation of the relevant billing systems.”
Ian Channing