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Cellular operators in Western Europe should expect another challenging year in 2006, according to Western European Cellular User Forecasts, 2005–2010, the latest research report on the subject from the Strategy Analytics Wireless Network Strategies service. Competitive pressure saw average revenues weaken in 2005 with churn creeping up and the report predicts no relief at all in 2006, though 3G growth is highlighted as one bright spot for the industry.
After growth in 2003 and 2004, average revenues per active subscriber fell one percent in 2005 and are forecast to fall two percent in 2006. 2005 was also the first year to witness a single-digit service revenue growth in the history of the Western European cellular market and it is forecast to grow by less than four percent in 2006.
In the Nordic region average revenues fell 11 percent in Finland in 2005, six percent in Norway and five percent in Sweden, while following market consolidation in Denmark, revenues grew there by three percent. Consequently, Nordic operators are keen investors in the wireless markets of Eastern Europe and beyond.
However, the silver lining is in the 3G market.
WCDMA subscriber numbers quadrupled in 2005 in Western Europe to reach 25 million and they will more than double in 2006. Vodafone made strong inroads into Hutchison’s 3G lead and has done much to raise the profile of 3G in the consumer space. It is expected that there will be over 100 million WCDMA users in Western Europe by the end of 2007.
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