Following its attendance of the World Mobile Congress in Barcelona, Fitch Ratings has today issued a report highlighting what it considers to be the key areas of future development for the mobile telecom industry in western Europe.
Fitch says that in the last three years, it has become clear that the significant and profitable growth enjoyed by the mobile industry in western Europe in the previous decade has started to stagnate. Markets have become saturated and the continued regulatory and competitive pressure has led to declining ARPU and pressured margins.
However, unlike the fixed-line business model, mobile in western Europe is at least still attracting new subscribers, helping to offset the headline pressures. In addition, the large multinational groups which dominate the sector have achieved strong traditional new subscriber growth from their international operations. Nevertheless, as penetration rates flatten in western Europe and subscriber growth falls to mid to low single digits, today's mobile market participants, in addition to new entrants, are placing their bets on the future evolution of the mobile industry.
Fitch Ratings expects the data contribution to grow in the future as flat rate tariffs, new phones and faster networks supply the necessary ingredients to stimulate demand. Those operators that are able to provide the innovative services, pricing, transparency and business models necessary to attract subscribers will reach a new phase of profitable growth.
The search for efficiency has so far led to some consolidation within markets. As the mobile business model evolves to become a content distribution network as much as a communication network, the consolidation process will speed up. The ability to deliver to a wide cross-border customer base and benefit from related economies of scale and partnerships will define success in the sector.
The full report can be downloaded from the Fitch Ratings website (registration required)
Posted to the site on 17th April 2008
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