Mobile operators' revenues decline by 6% as competition intensifies

INCREASED COMPETITION in the Irish mobile phone market resulted in operators' revenues declining by 6 per cent in the first three months of 2008, according to figures published yesterday by industry regulator ComReg.

Mobile revenues in the quarter amounted to €496.8 million, a fall of €31 million on the three months to the end of December.

ComReg said this was due to "increased intensity of competition among operators, reductions in mobile termination rates, EU price caps on roaming charges and a fall in gross handset sales, which may be due to seasonality issues".

Mobile penetration rose by two points to 121 per cent compared with the previous quarter. The number of subscriptions rose by 278,000 to almost 5.7 million.

3 Ireland's share of the market rose to 6 per cent compared with 5.1 per cent for the previous quarter. Meteor maintained its 18.7 per cent share, while Vodafone and O2 recorded declines.

Vodafone had a 43.4 per cent share of mobile subscriptions at the end of March, compared with 44.1 per cent at the end of December. O2 had a 31.9 per cent share, down from 32.1 per cent in the previous quarter.

Tesco and Eircom added to the mobile competition at the end of last year, although they were not included in ComReg's latest figures.

Competition in the fixed-line market is also beginning to bite Eircom, ComReg found. Its share of fixed-line revenues fell by two percentage points year-on-year to 68 per cent.

Internet subscriptions increased during the quarter by 5.7 per cent to 1.29 million.

Narrowband connections fell by 11 per cent while broadband subscriptions rose by 12 per cent.

Mobile broadband, meanwhile, rose by 46 per cent to 186,038.

There were 991,970 broadband subscriptions at the end of March. Eircom's share of this market fell to 41.4 per cent from 42.8 per cent at the end of December.

Revenues for the overall electronic communications market were €1.12 billion for the quarter, a fall of 2.8 per cent on the quarter and 0.6 per cent on the same period of 2007. This is the first time in more than two years that there has been a decline in revenues for the sector as a whole.