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Western Europe Forecast to Have the Lowest Mobile Data Growth Rate

Tuesday, October 2nd, 2012 (10:01 am) - Score 928
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Market saturation, delays in the availability of 4G based Mobile Broadband services and the greater propensity of consumers to use WiFi for mobile internet use will give Western Europe (UK, France etc.) the lowest annual growth rate in mobile data (29%) between 2012 to 2017. One solution could be to attract more fixed line ISP users to go mobile.

According to Analysys Mason, the compound annual growth rate (CAGR) of volume of mobile data traffic out of the eight regions of the world will be 40.8% for 2012 to 2017 (down from 50% for the period 2011 to 2016), which is well above Western Europe’s 29%. The analyst also noted that network costs are predicted to fall, with unit transport costs declining at about 30% per annum.

Rupert Wood, AM Principal Analyst, explained:

In an uncompetitive market, falling costs would lead to rising margins, but in a mature, competitive market such as Western Europe they result in a contracting business. In other words, it’s not getting dangerously expensive to cater for demand; it is getting worryingly cheap to transport what little demand there is.

Forecasting mobile data traffic has been bedevilled by analyst excitability, vendor and operator interests, spectrum lobbyists, and wildly mobile-centric views of device ecosystems. Open-loop forecasts with headline-grabbing growth rates simply don’t tally with long-term trends in transport costs or any plausible increase in operator revenue.”

In other words mobile internet services and data demands are still growing but in Western Europe this growth appears to be in decline, while traffic in the emerging Asia Pacific and Latin America markets is booming. This at a time when mobile operators have been looking towards cheap WiFi as a means to off-set mobile data demand where capacity is often in shorter supply.

The report recommends that two ways to off-set against this managed decline could be to offer bigger handset and multi-device bundles or by targeting the light-user end of the fixed broadband ISP user base with some “serious fixed-to-mobile substitution offers“. These could apparently involve getting users to pay for data that most of the time they could get for no additional cost, which doesn’t seem very attractive.

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