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Mobile Operators May Not Benefit from Fixed-Mobile Substitution
| 02 мая 2007 |
Mobile operators cannot assume that usage will increase sufficiently to offset price cuts introduced to accelerate FMS, says Cellular-News Analysys in a new report.
"FMS is generally seen as a threat for fixed operators and an opportunity for mobile operators. However, while fixed operators' voice call revenue is falling substantially due to FMS, not all mobile operators are seeing revenue gains as a result," says Dr Alastair Brydon, co-author of the report.
"To avoid declines in voice ARPU, mobile operators need to achieve significant increases in usage to compensate for price cuts, and some operators are doing much better than others."
Key findings from the report include:
- Fixed-mobile substitution is accelerating. If this increasing pace continues, 50% of all voice traffic will originate on mobile phones by 2008 in Western Europe.
- Mobile operators must be wary of using price cuts as the primary means of encouraging FMS. Drastic cuts in mobile pricing can destroy the potential benefits of FMS for mobile operators. Mobile operators in Finland and Portugal have achieved significantly higher levels of FMS than in other countries but have sacrificed revenue to do so. In Finland the proportion of voice traffic originating on mobile phones rose from 55% in 2004 to 70% in 2006. The average spend per mobile minute dropped by 34% to EUR0.10, but mobile usage per capita increased by only 23%, resulting in a net fall in ARPU.
- Mobile operators must be smarter in designing their tariffs and avoid sacrificing the price premium of mobile voice over fixed voice. In Austria, France and Spain, operators have succeeded in capturing a large proportion of voice traffic without substantial price cuts. In Spain operators were able to achieve a 58% increase in mobile voice usage per capita in the period 2004-6, with a decline in voice spend per minute of only 7%.
Cellular-News
02.05.2007
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