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European cellular market to expand rapidly.

as digital cellular networks across Europe become increasingly available and usage shifts from mobile units to handheld units and CT2, the European cellular market will undergo rapid expansion.

A digital network will replace the analog systems currently available and provide as much as three to 10 times the capacity of analogs, predicts Market Intelligence Research Corporation (MIRC).

The European cellular phone market was $189.3 million in 1986, and is forecast to reach $3104 billion by 1996. This year will see the largest revenue growth rate, up 62.9 percent over 1990, from $935.1 million to $1.52 billion.

There are essentially three types of cellular phones available on the market today:

* mobile cellular phones,

*transportable cellular,

*and handheld or personal cellular.

Another technology that is an offspring of cellular is the digital cordless phone, known as CT2 or cordless telephone-2. Digital cordless phones require the users be within a certain distance of a radio receiver, and users cannot make outgoing calls on these CT2 phones.

By all accounts, the European cellular market should boom in the 1990s. The market will be built on a pan-European digital cellular network running parallel with existing analog networks, avid support of the PTTs, and a business and residential user base now ready for cellular technology, MIRC predicts.

The U.K. so far has been the most prolific market. With 700,000 users in 1990, the U.K. has more cellular subscribers than the rest of Europe combined.

However, other countries project a substantial market. Italy, for example, expects 250,000 subscribers by 1992.

Currently the most active market for European cellular is in urban areas, where users generally restrict calling to that urban center: London or Paris, for example.

In addition, the current cost of cellular would generally make it more attractive to business persons, although the popularity of the handheld or personal cellular might well change that over the next two to three years.

Europe will be a highly competitive cellular market. Niches exist primarily in the "commodity" markets for handheld cellular, in particular.

Technical innovators are, and will continue to be, the giant firms in Japan (Panasonic, Okidata, and NEC), one U.S. firm (Motorola), and some European companies (Nokia-Mobira and Racal).

There are a number of trends affecting the European cellular phone market.

In mobile phones, watch for an overall decline in geographic markets except for the automobile-rich U.K., German, and French markets.

Transportables will virtually disappear as handhelds take over the market.

Handhelds are the segment of great opportunity. CT2 markets are big in the U.K., and MIRC forecasts them to reach 35 percent of the market by 1996.

As the innovator in this area, the U.K. will reap benefits as CT2 proliferates.

Germany and France both are eagerly awaiting introduction of digital cellular. The Benelux area still has a strong analog market and will be slower to convert to digital.

The Spanish market is being affected externally by a developing basic infrastructure.

Italy is over subscribed at present, creating a real need for digital systems.
COPYRIGHT 1991 Nelson Publishing
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Cellular and Two-way Radio
Publication:Communications News
Date:Apr 1, 1991
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