European mobile telecoms - it's all relative

Readers of the European financial press will have struggled to find anything to bring cheer to August, the traditional holiday month. Perhaps it would have been better to select a vacation destination that had no cell phone coverage or international newspapers in an effort to believe things might improve.

Well, the gloom has continued with the financial, housing and retail sectors reporting ever more depressing figures and forecasts.

However, one industry missing from this line-up of doom-merchants has been the European mobile operators. OK, Vodafone recently had to report less than sparkling results from Spain and the UK, but otherwise little has been said by the other major players--can no news be good (relative) news?

According to analysts at Credit Suisse London, European mobile growth slowed slightly in Q2/08, from 1.8 percent year-on-year in Q1/08 to 0.9 percent in Q2, which, to them, suggested an underlying stable or slightly improving growth trend in Q2.

More disturbing was the decline in European mobile data growth which slowed to 12.6 percent year-on-year growth from 15 percent year-on-year in Q1/08. Data as a percentage of ARPU fell for the first time in two years, but non-SMS growth remained solid, driven by access revenues on USB modems and handsets.

Countering this, mobile EBITDA grew in Sweden, Norway, Denmark (three markets relatively less exposed to roaming regulation) plus France and Portugal.

Also of note was the rise in mobile CAPEX for the first time in two years - at 8.6 percent from 7.6 percent in Q2/07, apparently driven by the further deployment of mobile broadband networks.

So, while the overall picture for the European economy might want you to stay on some remote beach, the mobile industry doesn't look such a bad place to be - relatively speaking.--Paul