3G will trigger mobile massacre, says Forrester

NEWS According to a new report from Forrester Research, revenues from traditional services such as voice and SMS will fall 36 per cent by 2005. New offerings such as m-commerce, advertising and location services won't be enough to recover the shortfall, leading to a 15 per cent decline in average revenue per user by 2005. Forrester predicts that new entrants such as supermarkets will offer loss-making voice services to muscle their way into the market, leading to voice revenues plunging by at least 44 per cent. The supply of new subscribers will also fall as European mobile markets reach saturation, when 76 per cent of the population have phones. Penetration rates in many European countries are already over 60 per cent. Falling average revenue per user and massive investment costs mean few mobile networks will make it to 2008. Only the largest players will survive. Lars Godell, telecoms analyst at Forrester, said: "Winning operators will consolidate into five groups. Vodafone, T-Mobil, France Telecom/Orange, and BT Cellnet will make up four certain winners - these operators already have a significant pan-European presence with moderate exposure to business failure. "KPN, Telefónica, Telecom Italia, or NTT DoCoMo will be the additional wild card group to survive. Dominant players in smaller markets like Norway and Sweden will have to affiliate with these larger groups by 2008 - leaving no truly independent operators left at all." The survey is based on interviews with 26 operators, and Forrester's own modelling, based on "conservative" cost and revenue estimates. The news comes at the same time as the UK mobile industry announced a boom in mobile phone sales in Christmas trading. Two thirds of the UK population now own a mobile phone, according to figures from France Telecom and Vodafone.