According to a new report from Strategy Analytics, Western European cellular service revenues will increase 20% to reach US$90 billion in 2001.
As the region’s cellular markets approach saturation, 2002 will represent the last year of double digit revenue growth.
As subscriber growth rates in West Europe slow dramatically, prospects for service revenue growth for the region have been saved by strong signs that the average revenue per user (ARPU) is reaching the bottom of the curve.
According to Phil Kendall, Director of the Strategy Analytics Global Wireless Practice, ‘Average revenues have fallen by one-third over the last three years to reach US$370 per subscriber. If that trend continued, prospects for the region would be particularly bleak. But with average voice expenditure levels stabilising in many markets, and data expenditure continuing to grow strongly, ARPU will creep up slowly after 2002.’
Prospects for the handset market, however, are not as smooth.
‘Having increased by 46% in 2000, handset sales will contract by 13% in 2001 with only 120 million handsets sold. Subscriber growth was never going to get close to the 72 million net additions recorded in 2000, and the replacement market is failing spectacularly to fill this gap. Operators cutting prepaid subsidy levels, and delays in the introduction of GPRS handsets and services, have all played a part. The good news is that the handset market should rebound quickly as users make those delayed replacement purchases in 2002,’ noted David Kerr, VP of the Strategy Analytics Global Wireless Practice.
The findings are presented in ‘West European Cellular Market Forecast (2001-2006),’ a study published recently by Strategy Analytics within its strategic advisory service, Wireless Network Strategies.