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14th July 2003

Europe : This year, 70 percent of Europeans will use a mobile phone, according to a new brief by Forrester Research. With time, users will replace old phones with more advanced ones and gradually adopt operators' new mobile Internet suites. In 2008, mobile Internet users will outnumber nonusers 3 to 2.

"Today, we see a brighter future for the mobile Internet," said Forrester Senior Analyst Michelle de Lussanet. "In 2008, we expect 76 percent of European consumers to have a Net-enabled phone as browsers become standard, and the majority of them will use it regularly. Two developments are already swaying mobile Internet phone owners toward usage -- the appeal of next-generation phones and the widespread availability of mobile Internet suites.

"Mobile Internet usage will reach 10 percent of the European population this year and rise to 48 percent in 2008. In the intervening years, Net-enabled phones will become the norm and regular mobile Internet users will outnumber nonusers. The growth in the number of GPRS phones -- all with Internet capability -- will give a boost to the installed base of Net-enabled phones. In 2008, 97 percent of phones in use will be capable of mobile Internet access, meaning that 76 percent of consumers will have one.

"European mobile penetration has grown from 53 percent of the population in 2000 to 66 percent at the end of 2002. Subscriber penetration will hit 70 percent this year and climb to 79 percent in 2008, just shy of the 80 percent saturation point that forms a hard ceiling. But at present, the industry's own data presents a slightly skewed picture as subscriptions outnumber subscribers. If we simply totaled the subscriber numbers that operators report, the result would be 298 million subscriptions or 76 percent penetration in 2002. But because many consumers have two or more active subscriptions and operators count inactive prepay phones in their numbers, in reality, 1.15 subscriptions exist for every subscriber. With this taken into account, 259 million Europeans of all ages used mobile phones at year-end 2002 -- a 66 percent penetration rate."

According to Forrester, most subscribers will have GSM through 2004, but GPRS will take over in 2005 -- and contrary to the continued media hype, UMTS won't begin to take off until 2008. GSM-only phones will dwindle from the 99 percent of subscribers in 2001 to 72 percent this year and 54 percent in 2004. In two years, GPRS will become a de facto feature on all new phones sold, reaching 59 percent of the installed base in that year and growing to 70 percent in 2008. GSM-only phones will shrink from 37 percent to 9 percent during the same period.

"UMTS will continue to draw more attention in the press than in phone shops for the rest of the decade," de Lussanet added. "Less than 0.5 percent of mobile users will give the new technology a try this year, and with GPRS alternatives on tap that seem equivalent but cheaper to consumers, the trend won't change significantly until 2006. In 2008, we expect 21 percent of mobile users to have a UMTS handset, 16 percent of Europe’s total population."