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www.idate.org
Mobiles in EuropeDidier Pouillot
Head of IDATE’s Industrial Analyses Department
Europe Is moving on… Does Europe still have the Wireless lead?
22www.idate.org
The European mobile market today:Ahead of the rest of the world by a hair’s breadth
A penetration rate of 76% mid-2002 (world average 18%, the USA 47% and Japan 56%)
However an ARPU below 30 € (over 50 € in the US, nearing 75 € in Japan)
European market position vs rest of the World
Cellular subscriber base Mobile service revenues
1.03 billion subscribers worldwide 390 billion € estimated for 2002
29%
71%
27%
73%
Source: IDATE
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The European mobile market today:From now on the N°1 segment in the telecoms services sector
The cellular subscriber base being significantly greater than the number of fixed lines
Revenues which in certain countries (in Italy particularly), represent over half of total telecoms revenues …
Recent trends in the West European market
0
50
100
150
200
250
300
350
1999 2000 2001 2002 (e)
in m
illio
ns
0%
20%
40%
60%
80%
100%
mobile revenues/telecom service revenues cellular subscribers access lines
Source: IDATE
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The European mobile market today:Consolidation under way
The 3 leading European Operators (Vodafone, Orange, T-Mobile) together hold almost half the cellular subscriber base in the region
Operations still in the pipe-line (Telia-Sonera merger, Ben’s takeover by T-Mobile, negociations in progress over Cegetel/SFR…)
01020304050607080
Vod
afon
e
T-M
obile
Ora
nge
TIM
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O2
Tel
efon
ica
KP
N
Bou
ygue
sT
elec
om VU
Tel
ia
in m
illio
nsDistribution of major operators’ subscribers in Western Europe (mid 2002)
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The European mobile market tomorrow:Many flies in the ointment (1)
Clear slow-down in subscriber growth since 2001 Difficulties in reversing the downward trend in ARPU The share of pre-paid still remains high, despite operators’ efforts
0
10
20
30
40
50
60
Germany UK Italy France Spain NL Sweden
in m
illio
ns
subscriber base at end 2000 new subscribers in 2001 new subscribers in 1H02
Recent trends in national cellular subscriber bases
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The European mobile market tomorrow: Many flies in the ointment (2)
Operators’ with healthy operational results (the majority with positive EBIT) …
… however, others somewhat financially shaky (concerning debt levels) and still unsure over their ability to finance 3G investments
(illustration communiquée mardi prochain)
0%
10%
20%
30%
40%
50%
60%
Orange KPN Mobile T-Mobile TelefonicaMoviles
TIM Vodafone
1H01 Y2001 1H02
EBITDA/revenues
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The European mobile market tomorrow: Many flies in the ointment (3)
Revenues threatened by potential decisions which Regulators could take, in particular to control the tarification of call termination charges (accounting for around 20% of European operators’ revenues in 2001) along with international roaming.
0%
5%
10%
15%
20%
25%
Italy Spain Netherlands Germany UK France
2001 2002 (e) 2003 (f) 2004 (f)
Termination revenue as % of total cellular operators’ revenue
Nota: data are not exhaustive
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Mobile networking market Two incompatible 3G standards
UMTS and CDMA 2000 roadmaps are the only IMT 2000 compliant 3G technologies
CDMA 1xRTT appears to be more succesful than GPRS in most of the countries where it has been deployed as at the end of year 2002…
3G2 G
GSM operators(Europe,Americas,Asia)
TDMA-136operators(Americas)
TDMA-136
CDMAoperators(Americas,Asia)
CDMAone
(IS-95)
CDMA1x
RTT
PDCoperatros(Japan)
PDC PDC-P
2,5 G
GSM GPRS
EDGE
W-CDMA
HSCSD
W-CDMA
W-CDMA
CDMA2000
3x
GSMoperators(China)
GSM
CDMA20001x
TD- SCDMA
CDMA (TimeDivisionDuplex)
CDMA DirectSpread
EDGE
GPRSGSM
Source: IDATE
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Mobile handset market Dominated by the development of electronics consumer markets
Market is willing to standardize its OS: Symbian OS Microsoft mobile PPC 2002 suite edition
3G handset market will be dominated by multiple classes of handsets, designed and integrated by consumer electronics companies
Some network operators can pilot by their own the development of their own handsets (Orange SPV)
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The European mobile market tomorrow: However, development prospects also remain (1)
Businesses’ demand for mobile services should enable operators to deploy in a sector which, up till now, was not greatly in demand
Trials with a view to combining different wireless technologies, notably cellulaire/Wifi
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The European mobile market tomorrow: However, development prospects also remain (2)
Mobile Data Services may also serve more broadly as growth relays for operators, in the same lines as the developments noted in Japan and Korea.
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5
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35
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2000 2001 2002 2003 2004 2005 2006 2007
Billion EUR
SMS person to person SMS application to person PortalsMMS Modem / Mobile office Indirect revenues
Revenues generated by mobile data services, in Western Europe (2000–2007)
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Key Questions
The huge investments in UMTS: Will it be profitable in the end?
Consolidation (national versus European): Will only pan-European mobile players survive?
The Ericsson and Nokia success story: What about the future market share of the mobile networks & handset for the european suppliers?
• Which new mobile applications will gain 30% of the revenues beyond voice services…?
• CDMA1X versus W-CDMA…
• Wi-Fi impact…
• Mobile market fully controlled by network operators versus MVNO’s expansion…
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