ISSN 2029-7017 print/ISSN 2029-7025 online Journal of Security and Sustainability Issues www.lka.lt/index.php/lt/217049/ ISSN 2029-7017/ISSN 2029-7025 online 2013 Volume 2(3): 71–84 http://dx.doi.org/10.9770/jssi.2013.2.3(6) Ministry of National Defence Republic of Lithuania University of Salford A Greater Manchester University The General Jonas Žemaitis Military Academy of Lithuania NATO Energy Security Centre of Excellence Vilnius Gediminas Technical University 1. Introduction A rather paradoxical situation is developing in the mobile communications sector that gives us a pre- viously unprecedented opportunity to communicate anywhere and at any time. On the one hand, it is a booming sector nowa- days. Four sequential generations of technology has evolved from circuit switched low quality analogue voice network to digital packet switched broadband technology that ensure secure voice, messaging and data communication services. More and more peo- ple use mobile services, the global compound annual growth rate (CAGR) of mobile subscriptions in the last decade was near 20%, to near 6,5 billion by end-2012. Annual growth of total mobile trafc is even more rapid – around 60% in the last years. Development of broadband technologies and increasing shift to da- ta-intensive Internet applications (TV, audio-video, gaming, social networking, etc.) in mobile environ- ment generated an avalanche growth of mobile data trafc; its CAGR is more than 100% over the last 5 years. Mobile penetration (MP) in Europe exceeds the global indicator by more than 50%, Europe’s mobile broadband (MB) penetration is threefold the global fgure (EC 2012, ITU 2012). Te trafc per device is higher than the global one; it is even twofold for middle and high range smartphones (UMTS 2011). On the other hand, average revenue per user (ARPU), which is one of the basic indicators for mobile opera- tors that show their fnancial welfare, globally has de- creased by 19% between 2007 and 2011. Although total revenues of mobile market are increasing (glob- MOBILE SERVICES IN BALTIC STATES: DEVELOPMENT TO IMPROVE SUSTAINABILITY AND QUALITY Aleksandrs Cernakovs-Neimarks 1 , Edvins Karnitis 2 , Gundega Rutka 3 , Andris Virtmanis 4 1, 3, 4 Riga Technical University, Kalku Str. 1, Riga, LV-1658, Latvia 2 University of Latvia, Raina blvd. 19, Riga, LV-1586, Latvia E-mails: 1 Aleksandrs.Cernakovs@sprk.gov.lv; 2 Edvins.Karnitis@sprk.gov.lv; 3 Gundega.Rutka@sprk.gov.lv; 4 Andris.Virtmanis@sprk.gov.lv Received 4 November 2012, accepted 19 December 2012 Abstract. Mobile communications is a booming sector nowadays, while the average revenue per user is decreasing year over year. Such tendency could create a signifcant risk factor for development and sustainability of mobile services in Baltics too. Development trends of the Estonian, Latvian and Lithuanian mobile markets, their demand and supply individualities, drivers, challenges and risks are analysed in the article. Predicted development scenario (till 2020) shows the growing demand for mobile services and their increasingly active usage. Operators’ challenges and several risks for supply sustainability have recognized; they have to be prevented timely by operators as well by governments and regulators. Keywords: Mobile communications, data transmission, mobile phone networks, mobile services, mobile phones, smartphones. Reference to this paper should be made as follows: Cernakovs-Neimarks, A.; Karnitis, E.; Rutka, G.; Virtmanis, A. 2013. Mobile services in Baltic States: development to improve sustainability and quality, Journal of Security and Sustainability Issues 2(3): 71–84. http://dx.doi.org/10.9770/jssi.2013.2.3(6) JEL classifcations: L63, L86, L96