‘Keep the faith’ is the message to telecoms investors from market research company Strategis. Although the European mobile communications industry has been experiencing a drop in growth and revenues recently (see Insight Analysis), Strategis believes that once the 3G network is established growth within the market will continue.
Much of future revenues will come from existsing subscribers updating handsets and packages as opposed to previous years when new subscribers were the target of mobile service providers. As the market has become saturated, so growth has decreased, in 1998 and 1999 growth stood at more than 40% but in 2000 that figure declined to 37.5%.
In 2001, Strategis expect growth to come in at around 23% and forecast that the decline will continue into 2002. The migration of users from “Basic GSM” to GPRS, and ultimately to W-CDMA (starting in 2003), will provide a new Â’revenue engineÂ’ for operators and manufacturers says Strategis.
“GPRS success by 4Q-2001 will be essential. If that doesnÂ’t occur, we are not going to see an upturn in investor confidence in the mobile communications arena for some time to come”, said Jake Saunders, European Director of the Strategis Group Europe.
