Press Release Summary = The UK mobile telecommunications market was worth £13.6bn in the year ending March 2006, having increased in value by 7.7% on the previous year. Although it remains the most dynamic telecommunications market in the UK, annual sales growth slowed significantly compared with earlier years, reflecting greater market maturity and price restrictions on call termination rates
Press Release Body = Mobile Telecommunications Market Report 2006
Executive Summary
The UK mobile telecommunications market was worth £13.6bn in the year ending March 2006, having increased in value by 7.7% on the previous year. Although it remains the most dynamic telecommunications market in the UK, annual sales growth slowed significantly compared with earlier years, reflecting greater market maturity and price restrictions on call termination rates.
This Key Note Market Report focuses on retail revenue (or end-user spending) in the UK mobile telecommunications market. Data relating to call revenue and traffic, and data revenue and traffic, are included, and mention is also made of other sources of revenue, principally content (e.g. ringtone downloads). Areas of the market relating to data rather than voice transfer - notably text and picture messaging, and ringtone, music and game downloads - are the fastest-growing sectors.
2005/2006 began to see mobile services being offered in association with fixed-line telecommunications services (mainly broadband) and television services. A desire to offer converged services is leading to takeovers and mergers, with companies extending their reach into new markets. In 2006, for example, O2 acquired the local loop unbundling (LLU) provider Be; while, more significantly, the fixed-line and cable television company NTL acquired the largest mobile virtual network operator (MVNO) Virgin Mobile. At the same time, one of the factors behind Telefonicas takeover of O2 was the desire to offer fixed/mobile services. Mobile companies have also been involved in launching television over broadband trials and services.
On the network side of the industry, the mobile market is consolidated into the hands of five main operators. However, the value chain in the industry is becoming more complex, as the delivery of content over mobile networks grows in importance.
A growing share of the UK mobile market is now in foreign hands, with four of the big five mobile operators being foreign owned and these companies control around 73% of mobile retail revenues.
Key Note forecasts that the mobile telecommunications market will show steady growth between 2006/2007 and 2010/2011, reflecting a relatively stable rate of growth in the UK economy. While value sales of mobile data traffic are expected to rise sharply, this will be offset by much slower sales of voice calls, as prices fall in real terms.
Key growth areas in the 2006/2007 to 2010/2011 period will be: mobile broadband services with the rise of high-speed downlink packet access (HSDPA) enabled third-generation (3G) networks; and mobile television and video services, plus mobile content generally. This will lead to more partnerships and mergers between content providers and telecommunications operators.
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