Mobile data market in Western Europe ready for takeoff

LONDON – APRIL 26, 2000 – According to IDC, the mobile data market in Western Europe is finally ready for widespread deployment as the pieces of the puzzle finally fall into place. As a number of key technologies, such as General Packet Radio Services (GPRS), Wireless Application Protocol (WAP), and unified messaging are being launched by European operators, the opportunity for high-speed mobile data services is set to explode in the medium term.

Over the next few years, packet data will take over circuit-switched data on the mobile network as the main data platform, and this will enable a number of new applications to be made available to users -both in the business sectors and for consumers. WAP will initially be the main driver of mobile data as more operators launch and promote their services – some operators have already taken the lead and are targeting the youth market with prepaid WAP phones – this method will see the fastest uptake of this exciting technology. Business users will initially be interested in the high-speed data services that will begin to be launched in Q3 and Q4 of this year – although widespread usage is not forecast until at least 2001.

WAP has been criticized and labeled an interim technology, and this is the case but in the same way as a Pentium 300 processor is an interim technology, or Windows 95 is an interim technology. WAP will develop into something greater than it is now, but at the moment it is the only option available to deliver Web or interactive content to mobile phones, so it cannot be ignored or dismissed,' said Tim Sheedy, senior research analyst with IDC's European Wireless and Mobile Communications program.

Short Messaging Services (SMS) will continue to see rapid growth, and operators will benefit from increased revenue streams from this service. However, this revenue will begin to decline as packet data applications begin to offer similar services. 'Operators will attempt to protect this important revenue stream and will introduce new pricing schemes to maintain SMS usage,' Sheedy said.

'Nevertheless, even with an increasing number of chargeable short messages being sent or received, the total revenue will begin to decline.'

Mobile commerce services will remain a niche market for a few more years until secure and reliable transactions can be enabled. However, this market will potentially be huge, with IDC forecasting the value of mobile commerce transactions in Western Europe to top US$37 billion in 2004. 'mCommerce services are one of the real killer applications for mobile data,' Sheedy said.

'mCommerce will continue the trend that we have seen with ecommerce' to move more transactions out of the real world into the virtual one. Although clearly limited by the screen and input mechanism, mcommerce has the ability to bring the buyer and seller together at the time that the service is required ' not when they are behind the PC or in the shop.'

Note: 'Data users' is measuring all circuit-switched and packet data users, but not SMS users. 'WAP' is measuring the number of users accessing WML content across the mobile data network, using either SMS, circuit-switched, or packet data.

IDC's report, Mobile Data in Western Europe: Applications on the Move -Analysis and Forecast, 1999-2004 (IDC #HW02G), analyzes the adoption rate, traffic generated, and potential revenue streams created by mobile data services, including SMS, WAP, packet and circuit-switched data, and mobile commerce services. It contains country-level and regional forecasts for 17 countries in Western Europe.

About IDC

IDC delivers dependable, relevant, and high-impact data and insight on information technology to help organizations make sound business and technology decisions. IDC forecasts worldwide IT markets and technology trends and analyzes IT products and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC is committed to providing global research with local content through more than 500 analysts in 43 countries worldwide.

IDC's customers comprise the world's leading IT suppliers, IT organizations, and the financial community. Additional information can be found at http://www.idc.com.

IDC is a division of International Data Group, the world's leading IT media, research, and exposition company.

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