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The Acceleration of Fixed–Mobile Substitution in Western Europe: facts and figures
Analysys Mason
Management Report July 2007
“Voice traffic in Western Europe continued to migrate rapidly from fixed to mobile services in 2006, and it won’t be long before half of all voice minutes originate on mobile phones. This report presents all the latest facts and figures, as well as case studies of leading mobile operators that are making the most of fixed–mobile substitution, and fixed operators that are managing to resist this trend.” Dr Alastair Brydon, Analysys Associate
Voice telephony generates by far the greatest proportion of mobile operator revenue in Western Europe, so mobile voice telephony will strongly influence mobile operators’ revenue prospects for at least the next three years. Fixed–Mobile Substitution (FMS) encompasses traffic substitution, as voice calls migrate from fixed to mobile services, and line substitution, as households and businesses dispense with their fixed-line voice services.
The report examines the state of FMS in Western Europe, and considers the extent and effects of traffic and fixed-line substitution. It provides analysis of the latest data for Western Europe, as well as for individual countries and operators, to determine the overall extent of FMS and the degree to which operators can, and are, influencing the outcome. Case studies of leading mobile operators are presented to illustrate how they have managed to make the most of FMS, by driving usage growth without sacrificing pricing, to achieve the best outcome for mobile spend, despite strong competitive and regulatory pressures.
FMS continues to represent a critical threat to fixed operators. Fixed-line substitution is particularly damaging because it removes fixed operators' opportunity to generate revenue from either voice or broadband services. The report includes case studies of leading fixed network operators that are using effective tactics to maintain fixed voice spend and usage levels, and to resist fixed-line substitution.
The Acceleration of Fixed–Mobile Substitution in Western Europe: facts and figures answers your key questions:
- How is the proportion of voice traffic that originated on mobile phones changing? What are the differences between countries in the extent of, and speed of, traffic migration during 2006?
- How is the proportion of households that have a mobile phone, but no fixed-connection services, changing? What are the differences between countries in the extent of, and speed of, fixed-line substitution during 2006?
- What is happening to voice usage per capita, split between fixed and mobile? Are customers spending more on voice telephony services, or are they diverting their spend from fixed to mobile services?
- How much of customers’ spend on voice is accounted for by mobile services? Is this proportion still growing?
- What is happening to the average spend per minute of fixed and mobile services?
- Which operators are the most successful in maintaining or increasing voice usage and spend per subscriber? Which operators are the least successful?
- What are the leading mobile operators doing to maximise the opportunities from FMS? What tangible benefits is this providing?
- Which fixed operators are managing to sustain voice spend on fixed services? What are the leading fixed operators doing to achieve this?
- What actions should fixed and mobile operators take to address the opportunities and threats?
Contents
| 0 | Executive Summary |
| 1 | Introduction |
| 2 | FMS accelerated during 2006 |
| 3 | Mobile operators exploiting FMS |
| 4 | Fixed network operators defending against FMS |
| 5 | Actions |
| Figure 1: | Mobile-originated voice traffic as a proportion of total voice traffic (including VoIP) in Western Europe, 1Q 2004–4Q 2006 |
| Figure 2: | Mobile-originated voice traffic as a proportion of total voice traffic (including VoIP) in Western Europe, by country, 4Q 2005–4Q 2006 |
| Figure 3: | Mobile-only households as a proportion of total households in Western Europe, by country, December 2005–December 2006 |
| Figure 4: | Mobile, fixed and VoIP usage per capita in Western Europe, 1Q 2004–4Q 2006 |
| Figure 5: | Fixed and mobile voice spend per capita in Western Europe, 2004–2006 |
| Figure 6: | Average spend per fixed voice connection on access charges and calls in Western Europe, 1Q 2004–4Q 2006 |
| Figure 7: | Fixed-to-mobile calls as a proportion of fixed voice calls in Western Europe, 1Q 2004–4Q 2006 |
| Figure 8: | Spend on mobile calls as a proportion of total spend on mobile and fixed voice calls in Western Europe, 1Q 2004–4Q 2006 |
| Figure 9: | Average spend per minute on mobile and fixed voice services in Western Europe, 1Q 2004–4Q 2006 |
| Figure 10: | Changes in mobile voice usage and spend per subscriber for pairs of operators in selected Western European countries, 4Q 2005–4Q 2006 |
| Figure 11: | Change in outgoing voice usage per subscriber for Vodafone in selected Western European countries, 4Q 2005–4Q 2006 |
| Figure 12: | Voice minutes per subscriber per month for mobile operators in Spain, 1Q 2004–4Q 2006 |
| Figure 13: | Voice spend per subscriber per month for mobile operators in Spain, 1Q 2004–4Q 2006 |
| Figure 14: | Mobile-originated voice traffic as a proportion of total voice traffic in Germany, 1Q 2004–4Q 2006 |
| Figure 15: | Voice minutes per subscriber per month for mobile operators in Germany, 1Q 2004–4Q 2006 |
| Figure 16: | Voice spend per subscriber per month for mobile operators in Germany, 1Q 2004–4Q 2006 |
| Figure 17: | Mobile-originated voice traffic as a proportion of total voice traffic in Finland, 4Q 2003–4Q 2006 |
| Figure 18: | Average spend per minute on mobile voice services in Finland, 1Q 2004–4Q 2006 |
| Figure 19: | Voice minutes per subscriber per month for mobile operators in Finland, 4Q 2005–4Q 2006 |
| Figure 20: | Voice spend per subscriber per month for mobile operators in Finland, 1Q 2004–4Q 2006 |
| Figure 21: | Decrease in the number of fixed connections, December 2005 to December 2006 |
| Figure 22: | Decrease in average fixed voice minutes per connection, 4Q 2005 to 4Q 2006 |
| Figure 23: | BT's ARPU from traditional voice services, 4Q 2004–1Q 2007 |
| Figure 24: | Number of subscribers to BT Together Option 2 and Option 3 fixed voice call packages, December 2004–December 2006 |
| Figure 25: | Average outgoing voice minutes and spend per capita per month in Belgium, 1Q 2004–4Q 2006 |
| Table 1: | Examples of mobile operators that are doing relatively well in maintaining or increasing voice usage and spend per subscriber in each Western European country |
| Table 2: | Examples of mobile operators that are doing relatively badly in maintaining or increasing voice usage and spend per subscriber in each Western European country |
| Table 3: | Changes in fixed voice usage and spend per capita in Western Europe, by country, 4Q 2005–4Q 2006 |
For full details, please email jeremyk@cmsinfo.com
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