3G will 'be the norm' in 2009
Pace quickens from next year
Seven out of ten Western European mobile users will have a 3G-enabled device within five years.
The number of users of the high-speed data protocol 3G (UMTS) will rise from 600,000 at the end of 2003 to 240 million by 2009, according to Analysys Research.
Subscriber numbers will remain low until at least 2005, despite a spate of 3G service launches from high-profile operators such as Spanish operator Telefonica Moviles and mobile giant Vodafone, the analyst firm forecasts in its report Western European Mobile Forecasts and Analysis 2004- 2009.
With mass-market launches expected towards the end of 2004 and in 2005, significant growth in 3G subscriber numbers will begin from 2005 onwards, according to the report. Demand for 3G services is then expected to rise quickly, with around 70 per cent - 240 million - of all Western European mobile subscribers using a 3G-enabled device by the end of 2009.
"Several Western European operators have launched 3G data services in 2004, increasing the likelihood that others like Orange, T-Mobile and TIM will be successful in entering the 3G mass market during the year," said Ariel Dajes, author of the report. "Recent market developments also make it more likely that handset manufacturers like Nokia will be able to deliver sufficient numbers of 3G handsets of the right quality in the second half of 2004."
According to Analysys the relatively slow initial growth of 3G subscribers can be attributed to three key factors - operators have experienced problems in sourcing 3G handsets, 3G networks are restricted to major built-up areas, and major operators are focusing on getting a return from their GPRS investments.
With 3G subscriber numbers remaining low until at least 2005, the role to be played by GPRS has increased, Analysys says. Revenue from GPRS subscribers will grow from €28bn in 2004 and peak at €63bn in 2007, before declining as customers move from GPRS to 3G.
Dajes notes that 3G handset design has been "widely criticised by operators with complaints that their size, appearance, and battery life will not be acceptable to customers who, over the last few years, have seen huge innovation in GSM handsets. At the same time, equipment manufacturers have complained that issues surrounding handset availability are to do with networks not being ready to enable proper testing."