LONDON (Brand Republic) - The explosion in mobile internet usage will not be enough to offset a 36% decline in traditional mobile revenue in Europe and the massive investment made in third-generation mobile phones, according to a report from Forrester Research.
The research says that, with average revenue per user declining by 15%, the mobile industry is set to face major business failures and massive consolidation as revenue declines over the next five years.
鈥淓uropean mobile operators will consolidate or disappear, and [3G mobile services] will be the trigger that imploded Europe鈥檚 mobile industry,鈥 Lars Godell, telecoms analyst at Forrester, said. 鈥淲e expect that consolidation will leave only five groups serving all mobile users in Europe by 2008.鈥
The researchers reached their conclusion by interviewing 26 mobile operators and by building a model of average revenue in the 17 western European markets.
Increased competition will force prices to drop rapidly in the areas of voice, SMS messaging and data connections for fax and laptop computers. While many of the operators interviewed believe that new mobile internet revenues will pick up the slack, Forrester believes that these revenues will fall below expectations.
The big players -- Vodafone, T-Mobil, France Telecom/Orange and BT Cellnet -- will be four of the five winners left in 2008, Godell said, and any companies entering the market for the first time with the new 3G licences will not survive after 2007.
www.forrester.com