Eastern Europe Dominates Subscriber Growth

Europe enjoyed its strongest quarter for net additions in more than six years in Q4 2006, with over 28m new connections made to one of the continent's mobile networks. Analysing the fourth quarter proportionate customer growth of each of the three sub-regions into which we divide Europe, it is clear that Eastern Europe was the source of the majority of this growth.

The fourth quarter percentage increase surged to 10.7%, producing half of Europe's net additions, despite accounting for just 27% of the continent's population. Meanwhile in Western Europe the pattern of growth followed its traditional route, climbing to a high for the year of 2.5% in the fourth quarter, although this represents the slowest fourth quarter proportionate growth ever seen in the region. In Central Europe, the growth rate actually fell marginally between the third and fourth quarters of 2006, the first such drop since 1998 when average quarterly growth was running at around 20%.

As we predicted three months ago, fourth quarter growth in 2006 did not manage to outstrip that in 2005 in proportionate terms. The rate rose from 3.4% in Q3 2006 to 4.5% in Q4 2006, maintaining the familiar sawtooth pattern we have often remarked upon in the past, but despite Eastern Europe's best efforts this was not enough to beat Q4 2005's four-year record of 5.1%.

Given the largely predictable pattern of quarterly growth in the European market over the last few years, demonstrated in the chart below, we see the overall rate for the first quarter of 2007 dropping to around 2.1% taking the total subscriber count to around 663m. We also fully expect Eastern Europe to continue to be the main growth driver, and the rate here to fall to around 6% for the three months to 31st March 2007.

This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World. To download a sample issue of the Briefing in PDF format, please click here. For more information including full subscription pricing, please visit The Mobile World"

Posted to the site on 29th March 2007