ART publishes a study on the prospects of growth in the mobile phone market in France over the next five years

Paris, 16 June 1998

According to the recent study by IDATE, commissioned by the French Telecommmunications Regulatory Authority (ART) as a means of monitoring market developments, the mobile phone market will continue to grow steadily over the next five yea

• Between 33% and 50% of the French population will own a mobile phone by 31 December 2002, compared with 12% today

Using four market models, the study shows mobile phone sales of 15-23 million French francs over the five-year period:

Model 1° - a linear extrapolation of the results of the second half of 1997 - excluding the December " peak ", estimates 21.5 million subscribers by the end of the period.

Model 2° - an empirical analysis using trends observed in countries where the mobile market is more mature than in France - particularly Scandinavia - and where the 10% penetration rate threshold has been reached. This shows 29.6 million subscribers in France by the end of the period, or a penetration rate of 50% (in Finland the penetration rate is already above 40%).

• Two factors have boosted market growth and the take-up of mobile equipment

- new technology: European incumbents started launching GSM networks back in 1992. Each new generation of services stimulates the market and is usually accompanied by the arrival of new operators, which means increased competition.

- the advent of competition: France, Germany, the United Kingdom, Italy and Finland have all experienced market growth as a result of competition.

• France ranks among the cheapest

The study shows that while tariffs for mobile communications in France were among the highest in 1994, France now ranks among the cheapest, alongside Finla

• Conclusion : these are models, not forecasts

The four models are not forecasts, as they do not take into account price changes, which effect market development substantially. The models will be less pertinent if there is a slow-down in the price reductions witnessed over the last few years. But on the other hand, there may be an acceleration in market growth due to the introduction of new technologies such as UMTS, and - to a lesser degree - low earth orbit (LEO) satellite systems.

ART has published this study for information. While IDATE is solely responsible for the results and methods used, ART welcomes comments from the industry and interested parties.