Mobile Market Trends and Forecasts for 2001/2

Our view is that mobile operator marketing strategy was the key determinant of the rate of apparent growth in mobile penetration across Europe in 2000. We use this report to show that operator 'push' was responsible for the increase in apparent subscribers. We examine the evidence on actual rates of ownership and usage in the three of the largest markets and show that underlying mobile penetration is probably around 60% of adults in these markets. Will the reduction in estimated levels of penetration, which the operators also acknowledge, mean continuing high growth rates in future? We think it unlikely. First of all, of course, operator 'push' is reducing. Second, ownership in key demographics, such as 15-24 year olds is already close to saturation. Third, those that do not own a mobile, particularly in the older age groups, appear relatively uninterested in the product.

Our pessimism derives from our view, firstly, that subscriber growth in NTL's UK cable franchises has all but ceased and, secondly, that further price rises will inevitably cause loss of subscribers as NTL's telephony and television offerings have already become uncompetitive. Broadband is important but will not generate significant amounts of extra revenue.