A price war could see the value of the voice services market in Western Europe fall from E185 billion to E170 billion in the next five years, warns telecoms consultancy Analysys.
In a new report,
The Future for Fixed-Mobile Substitution: options for fixed and mobile operators, Analysys claims that a price war would result in mobile voice traffic increasing from 310 billion minutes this year to 522 billion minutes in 2007.
However despite this 69% increase in volume, mobile operators would see sales slip by 2% to E87 billion. Under this scenario, fixed operators would fare even worse with the number of lines remaining static whilst revenues declined by 14% from E96 billion in 2002 to E83 billion in 2007.
“Fixed-mobile substitution is inevitable and will become more prevalent if the price difference between using a fixed and a mobile phone is eroded significantly,” said Eddie Murphy, the author of the report. “However, it is important for fixed and mobile operators to avoid a price war at all costs, as this would ultimately devalue the overall voice market.”
