Analysis: Figures released by the two big players in the Irish mobile phone market indicate that 2006 could well be the year that real competition hit the Irish mobile phone market.

The telling indicator was the average revenue per user (ARPU) reported by the two big players, Vodafone Ireland and O2 Ireland.

Vodafone's monthly ARPU in the third quarter was €46.90, compared with €53.10 in the same period a year earlier. Monthly ARPU at O2 declined to €45 from €46 in the second quarter and from €47 in the same period last year.

At the same time, Ireland's third mobile phone operator, Meteor, long regarded as the also-ran of the industry here, revealed that it now has 750,000 customers, a rise of 250,000 over the past year, which gives it a market share of 16 per cent.

Meteor, which is now owned by Eircom, said that it has increased its activity in the bill pay sector and contract customers now make up almost 10 per cent of the total customer base, up from just 2 per cent in 2005.

Increased competition and customer demand for better service and rates is reflected in recent results from all operators.

"I think it's a sign that consumers are demanding a better deal going forward," said Consumers' Association of Ireland chief executive Dermott Jewell.

"If customers are changing to a market player who for so long was so small in terms of market share and which now, because of its offer of decent competition is attaining a stronger market share, it shows that the other two are going to have to step up and start to compete effectively."

And that is before the most recent newcomer to the market, 3 Ireland, has a major impact.

Advertising spend by mobile operators is also reported to be up, a sign that the various players are fighting hard to get new customers or hang on to existing ones. Even the big operators concede that competition is forcing their hands.

"There is definitely more competition in the market and more people fighting for the same customers," said Gerry Fahy, strategy director at Vodafone Ireland.

"As the market becomes saturated above 100 per cent, customers may be subscribing to more than one operator and therefore are spreading their spend across a number of operators."

Customers are also becoming better informed about their choices and what is on offer.

"They're more focused on getting better value and are much more choosy," said Mr Fahy. "Customers are getting more sophisticated and demanding more services such as bundles of texts, minutes or international minutes."

Initiatives, such as the regulator's call costs website, which helps consumers to compare the cost of non-business mobile, home phone and broadband price plans, is also having an impact, according to Mr Jewell. "The service providers place all of their information on the regulator's website. It's up to date and it allows customers to find what's the best deal for them. I can't help but feel it's working," he said.