EU Mobile Phone Market Saturation Issues

The UK mobile phone market is approaching an important crossroad. The emergence of a first tier of dominant wireless operators has triggered a tough acquisition and retention war, which is proving costly and unsustainable.

Over the coming months it is likely that the UK mobile landscape will change significantly as a result and will enter a new phase of development, according to the latest market assessment by Ovum.

The UK was one of the first markets to be liberalized and it is now one of the most competitive. With five MNOs and over 13 MVNOs, it is a fragmented and crowded market.

Mobile penetration has reached 118 percent, with connections exceeding 71 million in Q2 2007. ARPU is still high in the UK, but so are acquisition costs, partially because of handset subsidies.

The UK is a crowded, competitive and increasingly saturated market. Price decline is a problem in the UK, as in most other saturated markets, but it does not affect operators as much as in other Western European countries.

Despite being saturated and highly competitive, the UK mobile market has avoided the fate of the German, Danish, Dutch and Belgium markets as ARPU is still relatively high and so are revenues. The increased competition has not resulted in a significant price drop.

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