PARIS-European mobile operators are set to enjoy a revenue increase of 7.5 percent this year and annual growth of 6.6 percent until 2006, according to a new report from consulting firm Arthur D. Little and independent brokerage firm Exane. The majority of the growth will come from traffic that currently is carried on fixed networks, said the companies.
Voice traffic on mobile networks should rise an average of 7 percent per annum from 2003 to 2010, according to the report, “Leaders hit back.” And while multimedia messaging services handsets accounted for 40 percent of handsets sold last year, short message service will represent most of operators’ data revenues until 2006, said the report. SMS generated three-fourths of average revenue per user growth, said the report, and it likely will continue strong growth this year.
“The outlook for the European mobile industry is positive as we believe significant potential exists for operators to increase revenue from both voice and data services,” said Philip Shepherd, director at Arthur D. Little. “Voice traffic and SMS still remain the key drivers of revenue growth. Despite strong handset sales, use of MMS services remains sluggish and it is not likely to make a significant contribution to ARPU until customers become more comfortable and familiar with the full potential of MMS.”
Other findings of the report include that operators are focusing on migrating prepaid customers to contracts, which could have a significant impact on the U.K. market where 69 percent of residential subscribers are prepaid.
