Mobile Phones Surpass Fixed Lines in Europe

Mobile Phones Surpass Fixed Lines in Europe


A new Yankee Group report, “Fixed-to-Mobile Substitution Is Inevitable in Europe, but Don’t Rush It,” says between 20 and 40 percent of voice traffic originates on mobile networks, and wireless revenue soon will overtake the total fixed switched-access market. However, this supremacy and growing consumer dependence on mobility will not lead to total displacement of fixed lines, at least until several barriers are overcome.

“Bundling and targeted substitution packages have made mobile rates more competitive to the extent that price inelasticity exists,” says Farid Yunus, Yankee Group Wireless/Mobile Europe senior analyst. “In more mature markets, there is no longer a specific price inflection point at which mobile phones displace fixed. Consumer surveys support this, with fixed lines remaining firmly entrenched in most households.

“Mobile cannot compete with fixed on price or performance, especially for data. However, the crux of mobility is convenience–access anytime, anywhere, which deserves a premium price. Aggressively targeting fixed traffic would be a step toward voice commoditization,” says Yunus.

The Yankee Group recommends mobile operators should focus on:

Revenue optimization and not landline displacement, bringing more data content services to market while maintaining average revenue per voice minute

Changing consumer perceptions (real or imagined) of limited reliability, safety and monetary value, compared to fixed

Creating more dependence on mobile phones, through personalization tools and tariff packages, spurring more use within homes and enterprises