Voice revenues across Europe have become commoditised. Data services accounted for over 17% of operator revenues. Average mobile penetration rates in Western Europe has reached 75%. With over 400 million mobile users Europe is the second largest GSM market in the world. The growth in this market is now been driven by handset renewals. There are over 15 billion messages being sent per month across Europe. Germany, Italy and UK are the largest markets for mobile services with 59.2, 53.5 and 50 million mobile phones users respectively. Mobile penetration in the UK exceeded 85% in 2003 with Orange and Vodafone having the largest market shares followed closely by O2 and T Mobile. Virgin had over 3million users and 3 launched the first 3G service in the UK in 2003. 

The growth of fixed line subscriptions in Western Europe has reached a plateau. Italy has the largest number of prepaid users accounting for 90% of total subscribers. The European average is 63%. The average mobile phone user in Europe exchanges 35 text messages per month. Ireland leads Europe with an average of 82 text messages sent per user per month. Premium SMS has revived the mobile market with the ability to charge for content and is now available via all major operators. Content is priced between 0.10 and 10 Euros. Flexible revenue share models are needed to encourage creativity and content development. Premium SMS will continue to be the preferred billing mechanism for all new data services for the foreseeable future. 

Handset customisation services (ringtones and logos) accounted for a market worth $1.2 billion in 2002. Customisation services represented 40% of all data revenues in 2003. There are more mobile phones than personal computers. 2003 saw a record number of new handsets being launched supporting features such as Colour Screens, Java, WAP, MMS, Polyphonic Ringtones, MP3, etc

Emerging mobile markets such as China and USA present enormous opportunities but also challenges due to market fragmentation. WAP usage grew at its fastest pace in 2003 due to the increased penetration of WAP enabled handsets and the use of WAP to download rich content such as polyphonic ringtones, Java games and images. Increasing number of smart phones being used in the corporate arena also supported the growth in WAP. Operator Browsing services such as Vlive!, Tzones, Orange World and O2Active are growing rapidly with premium content downloads increasing.

While these figures are set to be surpassed this year, 2004 will be the year of rich value added services driving revenues and reinvigorating the market. Multimedia-enabled handsets, combined with the ease with which users can send and receive rich content, will create yet another valuable vein of data traffic for operators.

2003 has paved the way for the onset of 3G technologies, with high-speed data transmission over GPRS now commonplace. While SMS retains its popularity, 2004 will prove pivotal as new handsets are progressively adopted by end-users. The ubiquitous polyphonic ringtones and colour pictures will give way to video streaming, multi-player gaming and complex corporate applications.

Source: Netsize, 2004 guide to 'Developing the Multimedia Mobile Market'