Europe's wireless industry will undergo significant changes over the next five to ten years, demanding robust planning by network operators, technology vendors, service providers and regulators, according to a report from Analysys Research.
The report said these challenges will include fixed-mobile substitution, convergence, service demand, disruptive technologies and changing business models.
'We have developed three plausible scenarios -- substitution, convergence and fragmentation -- for the evolution of the wireless industry, to help network operators, equipment vendors and other interested parties to develop and test their plans. The scenarios demonstrate that some very different outcomes are possible over the next five to ten years,' Alastair Brydon, co-author of the report said.
The research firm said under the substitution scenario, mobile operators will have to successfully displace fixed network services in the home and workplace, with a "double play" of voice and broadband Internet access, enabled by substantial improvements in performance and cost per megabyte from 3G services and beyond. The strategy displaces a significant proportion of fixed network usage, as well as many fixed network lines, to increase wireless ARPU. The dominance of wireless services delivered over 3G strengthens the role of mobile operators, while equipment vendors benefit from the substantial investment in cellular infrastructure and terminals.
In the convergence scenario, fixed operators will need to strengthen their role in the home and workplace with broadband services, such as IPTV, that far outreach the capabilities of wireless networks. The success of converged voice services, enabled first by UMA, and then by IMS and session initiation protocol, ensures that the vast majority of voice calls made in the home are carried on fixed networks, halting the migration of voice traffic to mobile networks.
In third fragmentation scenario, carriers will have to realize that no single dominant approach emerges. A patchwork of different services and wireless technologies (including WiMAX and DVB-H) are deployed across Europe, as operators attempt to seize a competitive advantage in their respective markets, the research report said.
The report further said voice and messaging will decline to a much smaller proportion of total ARPU, as operators focus predominantly on data applications, such as mobile TV and Internet access, and there is increasing adoption of wireless VoIP services.
