Data to Account for All Revenue Growth in Western Europe
By Eric Lin, Tue Jun 22 06:00:00 GMT 2004

The Yankee Group says that data revenue is will double in Europe over the next five years. To drive data adoption, or because of it, smartphone sales are also predicted to take off in Europe as well.

The Yankee Group projects that mobile data growth in Western Europe will double over the next five years, while voice revenues will remain stagnant. Yankee analyst Declan Lonergan, director, Wireless/Mobile Europe concluded “Voice markets are saturated and voice ARPU is declining. Data ARPU, however, will more than double over five years, representing 29% of total ARPU." According to the report, messaging's share of the revenue will decline as other categories such as entertainment and location based services rise in popularity. In addition to entertainment, enterprise data users are expected to double in the next five years.

Carriers are already testing new applications as data speed and reliability improves. As these new applications rise in popularity, it won't just be data revenues that will increase, it will also be demand for more powerful handsets that can run these applications. Demand for simple handsets will continually wane as smartphone applications grow. Another Yankee Group study shows that the age of phones without a browser has already ended in Western Europe, and in 3 years all models sold there will at minimum qualify as feature phones -- with color screens, Java and possibly Bluetooth and a camera.

By 2008, the Yankee Group predicts that smartphones will comprise the majority of handsets sold in Western Europe. Because smartphones can take advantage of mobile data services like no other device, this should be an obvious conclusion if, in fact, data usage will grow as predicted. It will take smartphones to drive the growth of data, but data and novel applications will also drive the adoption of smartphones. The two are inseparably linked in a growth cycle, but this is a double-edged sword. In the right conditions the two can continually help each other, but if carriers or smartphone manufacturers make the wrong move, they could end the cycle for both parties.