Europe : Mobile has that buzz again - and the buzzwords of the millennium are back too, including acquisitions and alliances, 3G, MVNO, fixed-to-mobile substitution (FMS), and retention.

Inset is Clare McCarthy is a principal analyst specialising in wireless at Ovum

In 1999, the market was so buoyant that even the most unlikely candidates were trying to carve out a niche. Many of these companies were opportunists and withdrew quickly as the market plummeted. Only those with substantial sunk costs and core business portfolios survived, and they have emerged leaner and stronger than ever.

Consolidate in the bad times, expand and acquire when times are good
Consolidation has been a key theme during less certain times, with global brands and alliances emerging, primarily out of Europe. FreeMove and Starmap are a means of countering Vodafone's global presence. They exploit economies of scale for hardware purchasing and ensure competitive international roaming rates between partners. In the Asia-Pacific region, SingTel's Bridge Alliance and its competitors' Asia Mobility Initiative aim to emulate this, but the region is highly fragmented in terms of brand and technology, particularly for 3G, and it will take time before they can mount an effective challenge. DoCoMo's i-Mode, Vodafone Live! and the CDMA community offer other alliance routes for Asia-Pacific operators, but there is no clear winner at present.

Emerging markets will provide revenue growth...
With investment back on the agenda, interest is strong in emerging markets as a means of revenue growth and expansion. Vodafone's natural acquisitiveness is evident with the announcement that it is purchasing the outstanding shares in its Czech and Romanian operations. Telefonica is set to enter the Czech market too, and the Orange brand is now part of the Polish landscape.

...and we will identify the opportunities
To reflect this trend, during the coming months, Mobile@Ovum will be increasing its coverage of Eastern Europe, Asia-Pacific and Latin America. We will look at the key drivers and barriers in influential countries, and assess the key performance indicators and opportunities for consumer growth.

MVNOs provide a new challenge
From a Nordic epicentre, MVNOs are changing the competitive face of mobile communications. With operators in Europe conducting their Market 15 reviews as part of the EU Framework Directive, we expect to see more MVNOs launch in previously untouched markets such as France, Ireland and potentially Italy. Activity is also heating up in Eastern Europe. In the US, there are currently over 30 MVNOs - the number grows daily, and the market is generating more requests for MVNO business models than any other.

Fixed foes address an old challenge
Potential competition will not only come from greenfield 3G operators or MVNOs. Established fixed operators are also looking at the detrimental impact of fixed-to-mobile substitution (FMS). This is prevalent in many of the emerging markets, where poor fixed line penetration encourages cellular uptake.

However, in markets with high teledensity, FMS is eroding fixed operators' margins too, and they are countering with bundled offers and loyalty programmes - a trick the mobile operators are deploying to stave off low-cost new entrants. Looking after existing customers now takes equal precedence with opening new markets.

Over the coming months, Mobile@Ovum will address both of these key issues and will continue to provide insight on the most successful corporate strategies for securing the consumer market.