Jun 15, 2009

2009-2014 Mobile Industry Outlook

1/ The global mobile broadband network : a remedy against crisis ?

In a letter to the G20 summit, 25 telcos including Nokia, Ericsson, Orange and AT&T, pearheaded by the GSMA put the case that they could increase worldwide GDP by three or four per cent by 2014, in return for the right allocation of broadcast spectrum, and the loosening of industry regulation.

The GSMA is planning to invest $550 billion over the next five years and urges world leaders to “endorse an ambitious private sector initiative to build new infrastructure for the digital economy, which will have measurable benefits to societies across the world.”
  • The CEOs estimate that up to 25 million jobs could be created world-wide, financed by private capital.
  • Michael O’Hara, the GSMA chief marketing officer expects to be able to connect 2.4 billion people by mobile by 2013.
  • He estimated that there are currently 200-300 million users accessing the internet by mobile.
2/ Mobile broadband to be worth $137 billion by 2014

Newly released mobile broadband forecasts by global advisory and consulting firm Ovum, show that users accessing the Internet via mobile broadband enabled laptops and handsets will generate revenues of $137 billion globally in 2014, over 450% more than in 2008.

Users of mobile broadband services (3G and 3G+ technologies) will grow from 181 million in 2008 to over 2 billion in 2014, growth of 1024% .

In 2014 Ovum forecasts that there will be 258 million users worldwide accessing mobile broadband services through laptops, which are connected via USB modems, datacards or have embedded mobile modules.
  • Ovum forecasts that handset users will grow from a base of 158 million in 2008 to almost 1.8 billion in 2014.
  • 40% of total mobile broadband laptop users will come from Asia Pacific in 2014.
  • In China, there will be 52.5 million laptop users versus 325 million handset users, a ratio of 6:1.
However, even in mature markets such as Western Europe, the slowest growing region between 2008 and 2014, user growth in laptop access over the next five years is set to reach 747%, and 918% in handset access.

3/ But revenues will grow slower than users

However, operators will need to content themselves with the fact that user growth will be far faster than revenue growth, meaning more users and more data traffic, but declining average revenues per user (ARPUs).

Several factors help explain this erosion:
  • The adoption of mobile broadband laptop access into increasingly less wealthy segments of emerging markets.
  • The introduction of prepaid tariffs driving adoption in mature mobile and fixed broadband markets, which boosts users but dilutes ARPU.
  • Increasing competition for mobile broadband access driving prices lower.

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