The European mobile industry is starting to show signs of recovery following the economic downturn, but innovation and collaboration are key to future developments, according to Frost & Sullivan.

The analyst firm said that the mobile industry was at a turning point prior to the recession, due largely to rapid changes in mobile devices from offering just calls and text messages to providing a host of data-related services and applications.

This shift created the need for new revenue sources, and a redefinition of the market exacerbated by the financial impact of the downturn.

"Valuable business opportunities would come from market players' collaboration," said Saverio Romeo, industry analyst at Frost & Sullivan.

"Resources optimisation remains critical, and increasing strategic partnerships can be extremely beneficial. This strong collaborative focus will make the life of the mobile industry easier in this final phase of the economic downturn."

As well as co-operation from players within the industry, Romeo believes that the existing and ongoing involvement by related public bodies has also been positive for the market.

The analyst focused on the development of application stores, spearheaded by the success of the Apple App Store for the iPhone, as a key initiative in helping to meet customer demand for varied and customised services as well as opening up new mobile delivery platforms.

Similarly, the growth of location-based services, mobile internet access, mobile social networking and the use of advertising as a revenue model have all helped to make the mobile industry relatively resilient to the recession.

Romeo foresees some of these services, such as location awareness and social networking, being combined to form a new set of context-aware applications even better suited to each individual's requirements.

From an operator perspective, these same technologies can also be used to forge a closer relationship with customers, using analytical tools for more targeted marketing campaigns, as well as reducing churn and detecting fraud.

"The European mobile industry is slowly recovering from the economic downturn, and some initiatives and ideas have helped the industry and set the basis for future developments," said Romeo.

"However, the future landscape of the mobile market needs to evolve further in several directions. The next mobile experience is not just communication; it is a combination of entertainment, convergence, communication and applications in vertical markets."

Highlighting the European Union's €1bn (£914m) pledge for wireless and wired broadband development and an €18m (£16.5m) investment in Long Term Evolution trials, Romeo concluded that continued support from national governments and the European Union is crucial in ensuring that the necessary infrastructure and policies are in place to support the accelerating demand for new and existing data services.