2006-2007 Western European Mobile Data Market

2006-2007 Western European Mobile Data Market

This annual report offers the latest data, statistics and analysis on the Mobile Data market in Austria, Belgium, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Malta, The Netherlands, Luxembourg, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. Subjects include:

Telecoms Infrastructure;
Regulatory issues;
EU Regulatory Framework;
National, regional and municipal policies;
Fixed Nework Operators;
Infrastructure developments.

Executive Summary

This European market report covers developments in the region’s rapidly expanding mobile data market. In 2007 the development of mobile technologies and the rapid increase in the number of content providers will provide enormous potential for the profitability of Europe’s mobile operators, which have suffered from falling ARPU in recent years as a result of competition from MVNOs and regulatory pressure on roaming and interconnection tariffs. Operators nevertheless face a number of challenges - while gaming, video and music portals are concepts which have been transferred into the mobile arena, and subscribers have become more aware of the capabilities of 3G and other services, they are also wary of the high costs of data transfer. The most successful data service remains SMS, while only about 14% of subscribers use MMS/picture messaging, and only 10% of mobile users across Europe who have access to mobile Internet make use of it. In areas such as mobile TV, successful trials have not yet translated into general consumer acceptance. Nevertheless, newly launched concepts such as 3’s X-Series and TeliaSonera’s cap on mobile Internet have brought mobile broadband closer to the business model of fixed-line broadband. The report presents the latest statistics for mobile data services such as SMS, MMS, and i-Mode, assesses the adoption of emerging technologies such as HSDPA and evaluates mobile TV technologies and business models. An overview of operators, national markets and trends provides the necessary background to an assessment of how this important market will progress to the end of the decade. The report includes the following markets, among others:

Austria
Austria has a full complement of advanced mobile data applications, including HSDPA-capable data cards from T-Mobile, mobilkom, Connect/One and H3G, which expected to have 95% geographic coverage by the end of 2007. Mobilkom Austria also completed a live HSUPA demonstration in November 2006. Mobile TV is offered by T-Mobile. Although a small market, operators in Austria have the financial backing of Europe’s major players.

Finland
Finland has one of the world’s most progressive mobile markets, and has been the launching pad for a number of innovative services. In 2006 Elisa launched the Nordic region’s first commercial HSDPA network and carried out the world’s first W-CDMA/HSDPA data call using a commercial network operating in the 900MHz band, which provides coverage up to four times greater than the 2GHz band used for 3G services. Finland was also at the forefront in EDGE deployment as well as Flash-OFDM based mobile broadband wireless technology providing coverage in remote areas. The country has also progressed well with Unlicensed Mobile Access (UMA), converging wireless broadband Internet with mobile services. It is expected to operate one of the most extensive DVB-H mobile TV services in Europe following the award of the fourth digital broadcasting network licence to Digita, a Finnish developer of data communication networks and network infrastructure. The network had reached a third of the population by the beginning of 2007. As analogue TV transmission end in 2007 DVB-H deployment will become an extension of DVB-T, using the freed 470MHz – 850MHz UHF band which potentially allows up to 55 TV channels for mobile television.

Germany
Germany’s mobile operators hoped to take advantage of the 2006 World Cup to trigger a new phase of innovation in mobile data use, but consumer use fell short of expectations. Debitel introduced a mobile TV service based on the DMB standard during the year, while E-Plus, O2, T-Mobile and Vodafone have tested the DVB-H standard, though E-Plus later pulled out of further involvement. T-Mobile and Vodafone have advanced plans for national launched of mobile TV in 2007, having capitalised on their experiences in other European markets.

Italy
HSDPA has been a considerable success in Italy, with TIM having boosted its HSDPA service to 3.6Mb/s in October 2006, reaching 48% of the population by early 2007 from more than 3,500 sites. 3 Italia made HSDPA available in most major cities by August 2006, and aimed to deliver up to 14Mb/s within a few years. I-Mode is available from Wind, while the Vodafone live! portal had about five million subscribers by the end of 2006. Mobile TV also shows promise in 2007. Although only about one phone in 30 in the Italian mobile market is equipped with DVB-H technology, the number is growing rapidly. 3 Italia launched unveiled its mobile-TV service LaTre in February 2006, comprising more than 20 channels, and launched a commercial DVB-H service in June 2006 in partnership with broadcasters RAI, Mediaset and Sky Italia.

Spain
Mobile providers in Spain have invested huge sums in building networks to support HSDPA, promising speeds of up to 14.4Mb/s in coming years from the maximum 3.6Mb/s achievable in early 2007. Given that some 85% of Spain’s broadband subscribers only receive 1Mb/s, HSDPA has an impressive advantage despite the higher access charge. Telefónica Móviles had upgraded its entire network with HSDPA technology by the end of 2005 and planned to have 13,000 enabled base stations in operation by 2008, by which time an anticipated 40% of customers would have UMTS handsets. Vodafone launched Spain’s first commercially available HSDPA-enabled mobile handset in November 2006, while Orange also offers HSDPA with single rate tariff PCMCIA cards. BlackBerry and i-Mode are also available, while the three mobile operators planned a co-operative bid for rights to broadcast digital TV via DVB-H, presenting a common front to push Spain in the forefront of DVB-H technology and usage in Europe.

Sweden
H3’s HSDPA network covered more than 90% of Sweden’s population at launch in November 2006, among the most extensive in Europe. Telenor and Telia Mobile also provide HSCSD technology, while TeliaSonera has developed an EDGE network covering 90% of the country. Mobile TV trials have been undertaken by TeliaSonera (Surf Port), while Tele2 launched a free television station for 3G mobiles. The country’s sophisticated technology infrastructure and the wide reach of the main operators, covering the Baltic and Nordic regions, offer considerable opportunities beyond the limited domestic market.

The UK
The UK was a pioneer in mobile TV, with tests during 2005 and 2006 using a range of different standards, including DVB-H, DAB-IP and MediaFlo. Orange was the first provider to offer mobile TV – ‘Orange TV’ – though the popularity of the mobile TV concept is yet to be proven. BT launched its BT Movio mobile TV service on a wholesale basis in September 2006, selling Movio to mobile operators as their own-branded product. Virgin Mobile was the first mobile operator to utilise the service, from October 2006, offering a range of TV and DAB radio channels. Operators such as 02 and Vodafone have reported positive results following the first phase of mobile TV trials, though this is unlikely to be reflected in consumer acceptance commercially until operators adopt a fixed charge business model for usage. Nevertheless, the potential UK market for mobile data is huge, given the market size and the readiness of consumers to adopt pricing structures such as those offered by H3’s X-Series.

This annual report offers the latest data, statistics and analysis on the Mobile Data market in Austria, Belgium, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Malta, The Netherlands, Luxembourg, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. Subjects include:

Telecoms Infrastructure;
Regulatory issues;
EU Regulatory Framework;
National, regional and municipal policies;
Fixed Nework Operators;
Infrastructure developments.

Executive Summary

This European market report covers developments in the region’s rapidly expanding mobile data market. In 2007 the development of mobile technologies and the rapid increase in the number of content providers will provide enormous potential for the profitability of Europe’s mobile operators, which have suffered from falling ARPU in recent years as a result of competition from MVNOs and regulatory pressure on roaming and interconnection tariffs. Operators nevertheless face a number of challenges - while gaming, video and music portals are concepts which have been transferred into the mobile arena, and subscribers have become more aware of the capabilities of 3G and other services, they are also wary of the high costs of data transfer. The most successful data service remains SMS, while only about 14% of subscribers use MMS/picture messaging, and only 10% of mobile users across Europe who have access to mobile Internet make use of it. In areas such as mobile TV, successful trials have not yet translated into general consumer acceptance. Nevertheless, newly launched concepts such as 3’s X-Series and TeliaSonera’s cap on mobile Internet have brought mobile broadband closer to the business model of fixed-line broadband. The report presents the latest statistics for mobile data services such as SMS, MMS, and i-Mode, assesses the adoption of emerging technologies such as HSDPA and evaluates mobile TV technologies and business models. An overview of operators, national markets and trends provides the necessary background to an assessment of how this important market will progress to the end of the decade. The report includes the following markets, among others:

Austria
Austria has a full complement of advanced mobile data applications, including HSDPA-capable data cards from T-Mobile, mobilkom, Connect/One and H3G, which expected to have 95% geographic coverage by the end of 2007. Mobilkom Austria also completed a live HSUPA demonstration in November 2006. Mobile TV is offered by T-Mobile. Although a small market, operators in Austria have the financial backing of Europe’s major players.

Finland
Finland has one of the world’s most progressive mobile markets, and has been the launching pad for a number of innovative services. In 2006 Elisa launched the Nordic region’s first commercial HSDPA network and carried out the world’s first W-CDMA/HSDPA data call using a commercial network operating in the 900MHz band, which provides coverage up to four times greater than the 2GHz band used for 3G services. Finland was also at the forefront in EDGE deployment as well as Flash-OFDM based mobile broadband wireless technology providing coverage in remote areas. The country has also progressed well with Unlicensed Mobile Access (UMA), converging wireless broadband Internet with mobile services. It is expected to operate one of the most extensive DVB-H mobile TV services in Europe following the award of the fourth digital broadcasting network licence to Digita, a Finnish developer of data communication networks and network infrastructure. The network had reached a third of the population by the beginning of 2007. As analogue TV transmission end in 2007 DVB-H deployment will become an extension of DVB-T, using the freed 470MHz – 850MHz UHF band which potentially allows up to 55 TV channels for mobile television.

Germany
Germany’s mobile operators hoped to take advantage of the 2006 World Cup to trigger a new phase of innovation in mobile data use, but consumer use fell short of expectations. Debitel introduced a mobile TV service based on the DMB standard during the year, while E-Plus, O2, T-Mobile and Vodafone have tested the DVB-H standard, though E-Plus later pulled out of further involvement. T-Mobile and Vodafone have advanced plans for national launched of mobile TV in 2007, having capitalised on their experiences in other European markets.

Italy
HSDPA has been a considerable success in Italy, with TIM having boosted its HSDPA service to 3.6Mb/s in October 2006, reaching 48% of the population by early 2007 from more than 3,500 sites. 3 Italia made HSDPA available in most major cities by August 2006, and aimed to deliver up to 14Mb/s within a few years. I-Mode is available from Wind, while the Vodafone live! portal had about five million subscribers by the end of 2006. Mobile TV also shows promise in 2007. Although only about one phone in 30 in the Italian mobile market is equipped with DVB-H technology, the number is growing rapidly. 3 Italia launched unveiled its mobile-TV service LaTre in February 2006, comprising more than 20 channels, and launched a commercial DVB-H service in June 2006 in partnership with broadcasters RAI, Mediaset and Sky Italia.

Spain
Mobile providers in Spain have invested huge sums in building networks to support HSDPA, promising speeds of up to 14.4Mb/s in coming years from the maximum 3.6Mb/s achievable in early 2007. Given that some 85% of Spain’s broadband subscribers only receive 1Mb/s, HSDPA has an impressive advantage despite the higher access charge. Telefónica Móviles had upgraded its entire network with HSDPA technology by the end of 2005 and planned to have 13,000 enabled base stations in operation by 2008, by which time an anticipated 40% of customers would have UMTS handsets. Vodafone launched Spain’s first commercially available HSDPA-enabled mobile handset in November 2006, while Orange also offers HSDPA with single rate tariff PCMCIA cards. BlackBerry and i-Mode are also available, while the three mobile operators planned a co-operative bid for rights to broadcast digital TV via DVB-H, presenting a common front to push Spain in the forefront of DVB-H technology and usage in Europe.

Sweden
H3’s HSDPA network covered more than 90% of Sweden’s population at launch in November 2006, among the most extensive in Europe. Telenor and Telia Mobile also provide HSCSD technology, while TeliaSonera has developed an EDGE network covering 90% of the country. Mobile TV trials have been undertaken by TeliaSonera (Surf Port), while Tele2 launched a free television station for 3G mobiles. The country’s sophisticated technology infrastructure and the wide reach of the main operators, covering the Baltic and Nordic regions, offer considerable opportunities beyond the limited domestic market.

The UK
The UK was a pioneer in mobile TV, with tests during 2005 and 2006 using a range of different standards, including DVB-H, DAB-IP and MediaFlo. Orange was the first provider to offer mobile TV – ‘Orange TV’ – though the popularity of the mobile TV concept is yet to be proven. BT launched its BT Movio mobile TV service on a wholesale basis in September 2006, selling Movio to mobile operators as their own-branded product. Virgin Mobile was the first mobile operator to utilise the service, from October 2006, offering a range of TV and DAB radio channels. Operators such as 02 and Vodafone have reported positive results following the first phase of mobile TV trials, though this is unlikely to be reflected in consumer acceptance commercially until operators adopt a fixed charge business model for usage. Nevertheless, the potential UK market for mobile data is huge, given the market size and the readiness of consumers to adopt pricing structures such as those offered by H3’s X-Series.