3G operators will not break even until 2014, claims report
Europe's 3G operators will be in the red until 2014, according to a new report by Forrester Research. Only 10 per cent of European mobile users will be using UMTS (universal mobile telecommunications system) by 2007, which will mean a delay in payback until 2014 at the earliest, according to the report. Finland, France, Italy and Switzerland will hit break even first, between 2010 and 2012, according to Forrester. In France and Italy this is because of the relatively few 3G competitors and the large market size, meaning the cost-potential revenue ratio. Finland will benefit from zero-cost 3G licences and the prohibition of handset subsidies, while Switzerland has the highest average revenue per user rate in Europe. The UK, Germany, Spain and Portugal meanwhile are not expected to break even until 2014. In Germany and the UK, this is due to high licence fees, but all four are experiencing a growth in the number of competing operators, requiring higher spending to acquire and retain customers and greater handset subsidies.