Germany: A declining voice market, but huge mobile data potential, claims new study

Service revenues in Germany are expected to be lower this year than 2008 by around 1-2 per cent, as consumers become more careful when renewing their mobile subscription. This forecast, from the market research firm Telecompaper, doesn't believe that this decline is due to the overall economic situation, but caused by the commoditisation of mobile voice services as penetration reaches over 130 per cent.

While this revenue slide is not being counterbalanced by the growth of mobile data usage, the study maintains that German operators have fast-tracked the development of data-rich applications. This refocusing is designed to improve profit margins as voice ARPUs continue to fall in response to competition from resellers and regulatory measures on roaming and termination rates.

To support this emphasis on mobile apps, the four operators (albeit that Vodafone and T-Mobile dominate the market with each having around 35 per cent of overall user base) have invested heavily in upgrading their networks. To help with this, the German regulator has anticipated future growth by preparing for fresh UMTS licences in 2009 in the 1.8GHz and 2.6GHz bands, as well as refarming spectrum below 1GHz for use by mobile broadband.

This shift towards mobile apps comes as the competition within the mobile voice market continues to increase with SIM-only deals becoming increasingly popular and nearly 30 MVNOs now operational. And, despite increases in voice usage, ARPUs have experienced sustained erosion over the past five year dropping by €9 since 2004.

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Related stories:
O2 Germany opens network to VoIP
Germany planning 4G spectrum auction
Telefonica and O2 play catch-up in Germany
Femtocells go commercial with T-Mobile in Germany
Vodafone Germany tests LTE in digital dividend spectrum

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