Analysys: Europe's Hot for Data

Growing data usage has helped to reverse the fall in average revenue per user (ARPU) figures at Western Europe's mobile operators, according to Analysys Research Ltd. (see Analysys: Data Revenues Rising).

The research firm found that of the six countries it studied in detail, only Sweden saw a notable drop in the monthly ARPU rate during 2002 compared with 2001, while Italy showed a very slight fall. France, Germany, the U.K., and Spain all experienced increased ARPU levels, and Analysys believes that increasing revenues from "non-voice" services were responsible for the upticks. All six countries had experienced a dramatic fall in ARPU figures in 2001 compared with 2000 (see tables below).

Table 1: Estimated active ARPU levels in Western Europe by country, 2000�2002
Euros per user per month 2000 2001 2002
Western Europe 37.6 30.6 31.1
France 39.3 35.8 37.3
Germany 37.0 25.8 26.6
Italy 31.5 28.7 28.6
Spain 36.5 29.7 30.6
Sweden 37.2 32.5 28.5
UK 44.3 33.8 34.3
Source: Analysys Research 2003

Table 2: Change in active ARPU levels in Western Europe by country, 2001�2002
% change during 2001 % change during 2002
Western Europe �18.7% +1.7%
France �8.7% +4.1%
Germany �30.2% +3.0%
Italy �8.8% �0.4%
Spain �18.6% +3.0%
Sweden �12.7% �12.3%
UK �23.9% +1.5%
Source: Analysys Research 2003

On average, mobile operators in Western Europe generated 12 percent of their revenues from data services in 2002, but some operators noted much higher levels in the final quarter of the year. For instance, U.K. operator O2 Ltd. says 17 percent of its revenues came from data services in the final quarter of 2002, while its continental sister, O2 Germany GmbH & Co. OHG, derived 20 percent of its revenues from data services in the same period.

That growth is set to continue, placing increasing pressure on existing wireless data networks while 3G services ramp up and handsets become available and affordable. As a result, mobile operators are going to see greater returns from, and greater pressure on, their general packet radio service (GPRS) networks, while public 802.11 hotspots will see some action in Europe.

Analysysys forecasts that up to 2.5 percent of potential non-voice operator revenue could be "lost to public WLAN [wireless local area networks] by 2008, and that the loss could be as high as 8 percent amongst business customers." Of course, those revenues may still end up with carriers running 3G networks (see Swisscom Buys a Bevy of PWLAN).

But what of the GPRS networks? If Analysysysys is right, and only six percent of subscribers have 3G handsets in 2005, the vast majority of the ever-increasing data traffic will be winging its way across some pretty iffy connections (see Wireless Nets Suck, Says Expert).

"I think the operators would be happy to be in a situation where their networks are choked, but they're nowhere near that yet," says Katrina Bond, a principal analysyst at Analysys and co-author of "Western European Mobile Forecasts and Analysis [sic] 2003-2008."

This extended reliance on GPRS will provide an increasing sales opportunity, though, for specialyst startups with network optimization products (see 2.5G Carriers Look to Optimize Assets ). "There is definitely an opportunity," says Bond, "as the operators need to get their data rates up and make the most of the spectrum they have."

— Ray Le Maistre, European Editor, Unstrung

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