Mobiles beat fixed lines…but competition strikes

The value of the market for mobile telephone services in the EU overtook that of fixed line services in 2004. The trend has continued with revenues from fixed services falling by around 5% in 2006, according to figures from the European Information Technology Observatory (EITO), quoted in the European Commission’s latest implementation report on electronic communication regulation. Mobile services were worth €133 billion in 2006, compared to €83bn for traditional fixed line communications. But the rate of increase in revenue from the mobile sector is slowing even though market penetration has reached 103%. Luxembourg leads the field with a 171% penetration rate, meaning that there are 1.71 handsets for every member of the population. Italy is next with a rate of 134% followed by Lithuania with 133%. Revenue from the mobile sector is falling as the prices that operators can charge are driven down by strong competition and regulation. According to figures from the Organisation for Economic Co-operation and Development (OECD), the club of the world’s 30 wealthiest nations, the price for services for typical patterns of consumption fell by up to 13.9% between 2005 and 2006. The number of mobile service providers has increased to 290 with 70 in the UK and 60 in the Netherlands alone.

The European Commission was accused of populism last year when it launched a bid to cut mobile phone roaming charges. But one year later it looks almost certain that travellers will be paying less to use their handsets abroad from this summer.