Western Europe eyes 100 per cent cell phone use

LONDON - Cell phone use in western Europe will hit 100 per cent by 2007 as mobile savvy customers continue to buy multiple phones or phone cards, according to a report published today.  

Management consultancy Analysys Research said active mobile penetration, which excludes phones that have not been used for about three months, would grow to 98 per cent from 90 per cent in 2006 and eventually exceed 100 per cent in western Europe. 

But the consultancy said penetration would stagnate in markets in which operators shied away from cheaper pay-as-you-go offerings to focus on more lucrative contract deals, where customers sign up for 12-18 months, to stabilise customer revenues or ARPU (average revenues per user).  

"In countries such as France and Germany, operators have an opportunity to increase penetration by marketing pre-paid offerings, which is often the best way to attract certain segments of the population, but they should not lose sight of profitability," says Alex Zadvorny, co-author of the report.  

"Italy, where ARPU has been in line with the Western European market average and registered the slowest decline among the major European countries between 2000 and 2004, is a good example of how the prevalence of pre-paid does not necessarily suppress ARPU. "  

There are already as many mobile phones as people in countries such as the UK, Italy and Sweden, and wireless groups have been at pains to emphasise this does not mean growth will slow. They say they can win customers from rivals as well as encourage subscribers to stay on their phones for longer.  

Backing industry assurances, Analysys expects mobile service revenue to grow at a robust 9 per cent per year between 2004 and 2007, helped by new third-generation (3G) video phones that can lure customers into digging deep for mobile data services such as quality picture, internet and music services.  

- REUTERS