Western Europe Mobile Penetration To Hit 88% In 2007

This could be an overestimate, given that some inactive users are still counted by certain operators, even though in reality these customers may have left to join another operator. In this instance, users are potentially being counted twice. However, Yankee Group notes that the upside to this is that penetration levels may actually be lower than is currently being assumed, offering further room for growth.

Data revenues Looking at the operators’ Q4 and full year 2002 figures, Yankee Group also found that the contribution to revenues from data services (as opposed to voice services) has been weaker than anticipated. Nevertheless, it says that there is not a single carrier lowering its targets for mobile data revenues and Yankee forecasts that data will account for 30% of service revenue by 2007.

Lower prices Take-up of next-generation mobile phone services is likely to get a healthy shot in the arm after the launch of aggressive pricing plans.

“Price leaders such as T-Mobile, which recently espoused a new strategy of driving adoption through aggressive pricing, intends to slash costs to consumers by as much as 70%. Tariff packages available at launch from 3G network operator 3 in Italy and the UK also point to dramatic price competition when these new operators come online,” says the report.

Yankee Group says that the trends point to an exciting 2003 and beyond, as mobile markets and services finally take the form envisaged by the proponents of 3G. The 50-60% of customers currently using SMS on a regular basis will now be exposed to the higher bandwidth services of of multimedia messaging (MMS) and 3G platforms.

Average expenditure on data will grow to nearly $10 per user per month by 2007, maintaining overall revenue growth even as voice average revenue per users (ARPU) begins to decline, according to Yankee Group’s forecasts.

Western European Mobile Forecasts
	2002	2003	2004	2005	2006	2007	CAGR
Mobile Penetration	79.1%	82.2%	84.5%	86.0%	87.0%	87.6%	2.1%
Total Users (000s)	309,994	322,783	332,598	339,193	343,934	347,142	2.3%
Annual Growth	5.8%	4.1%	3.0%	2.0%	1.4%	0.9%
Total ARPU (US$/month)	$27.87	$28.62	$29.56	$30.40	$31.25	$31.90	2.7%
Voice ARPU (US$/month)	$24.29	$23.73	$23.15	$22.66	$22.43	$22.34	-1.7%
Mobile Data ARPU (US$/month)	$3.58	$4.89	$6.41	$7.74	$8.82	$9.56	21.7%
Data Percentage of Total	12.8%	17.1%	21.7%	25.5%	28.2%	30.0%
Total Service Revenue (US$m/year)	$100,807	$108,669	$116,252	$122,538	$128,077	$132,286	5.6%
Voice Service Revenue	$87,865	$90,106	$91,041	$91,327	$91,946	$92,650	1.1%
Mobile Data Revenue	$12,942	$18,563	$25,211	$31,211	$36,131	$39,636	25.1%
Total Annual Revenue Growth	12.7%	7.8%	7.0%	5.4%	4.5%	3.3%
Source: Yankee Group, March 2003