High pace of irreversible fixed-to-mobile substitution

Countries such as Finland and Italy have already undergone an enormous migration of voice traffic from fixed to mobile networks. If Germany were to follow a similar fixed-to-mobile substitution trend between 2004 and 2007 as Finland did between 1997 and 2001, the result would be a 300% growth in traffic and a 200% increase in revenue compared with 2003. Northstream has identified three trends that are accelerating fixed-to-mobile substitution (FMS) across Europe: (1) Increasingly mobile lifestyles demand flexible communication concepts, (2) Decreasing prices for mobile voice services lower the barrier for migrating traffic, and (3) Increased interest among service providers to undertake developments for fixed-to-mobile convergence. In this paper, Northstream presents the current market status and tries to identify reasons for the differences between markets in the Nordic region, Italy, Germany and Russia. In addition, the market dynamics of Italian, Russian and Swedish fixed-to-mobile substitution are analyzed and discussed in country case studies.

Fixed-to-mobile substitution in Europe (pdf)
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