Hope you all had a good holiday.
Last couple of days, i was busy moving the AORTA posts to their new home http://www.chetansharma.com/blog
If you could please update your feeds and continue to provide your valuable support, i will be grateful.
Download PPT (1.3MB)
Download white paper – Worldwide Wireless Data Trends (doc, 320 kb)
This research note summarizes the wireless data trends in over 40 countries and the analysis of over 30 prominent operators.
- Wireless industry crossed several milestones this past 6 months – 2 billion GSM subscribers and is on its way to the quickest billion subscribers within the next 2 years. 100M 3G subscribers with 66% coming from WCDMA (40% of these from Japan) and rest from EV-DO.
- Japan led the way with approximately $10B in wireless data service revenues for the first half of 2006. US and China followed with approximately $7B and $5.5B respectively.
- The #1 carrier worldwide in terms of total wireless data revenues for the first six months of 2006 is NTT DoCoMo with over $5.1B in data revenues. It was followed by China Mobile ($3.9B), KDDI ($3.3B), Verizon Wireless ($1.9B), and Cingular Wireless ($1.9B). Sprint Nextel, O2 UK, Vodafone Japan, SK Telecom, and China Unicom filled the rest of the top 10 slots respectively.
- China crossed the 400M subscriber mark and is on its way to cross the half billion subscriber mark in 2007. As first discussed in our “India’s Wireless Market” report, India is rivaling China’s monthly net adds of 5M/month and crossed the 100M subscriber mark making it the fourth largest subscriber base after China, US, and Russia. India will cross Russia later this year and the US by 2008 to become the second largest wireless market.
- Western Europe officially crossed the 100% wireless subscriber penetration mark (due to multiple SIMs) with several nations reporting up to 115-120% subscriber penetration. In spite of crossing 70% penetration mark, US wireless market shows no sign of slowing down and is strongly progressing towards another record year with over 25M net adds in 2006.
- In terms of total subscribers, China Mobile with 274M subscribers is way ahead of the second ranked Vodafone, which has 187M subscribers. China Unicom, América Móvil, Telefonica, SingTel, Deutsche Telekom (T-Mobile), and Orange (France Telecom) are the next six largest telecom groups in the world. In terms of individual carriers, Cingular and Verizon now occupy the #3 and #4 spot respectively ahead of NTT DoCoMo, which is at #5. The two Chinese carriers round up the top two positions and are likely to stay perched at their lookout vistas for some years to come. Telecom groups in mature markets are under enormous pressure to either come up with a global expansion strategy or accelerate their existing plans. Carriers in Japan and Korea are the most under duress.
- Japan became the first nation to have more than 50% of its subscribers using 3G. Korea is close second. 3G is starting to pick-up steam in both western Europe and North America as discussed in our cover story article “3G: Hitting the Mass Market” published in Moconews.net and Wireless World Magazine. Since then, we have presented our research at IEEE, CINA, EMC, Carriers in US; in Japan, Korea, and Russia; and later this year in India.
- China and India represent the biggest opportunities for Infrastructure providers. China has postponed its 3G decision for the umpteenth time and is having technical and political problems to get something in place before the 2008 Olympics. India is going through its 3G spectrum policy but unlike China is likely to resolve the issues in short order. Ericsson just scored a $1B contract with Bharti. BSNL’s tender is worth 2-3 times more.
- In terms of data ARPU, Japan continues to lead the pack with 28% of its revenues coming from data services amounting to almost $17 data ARPU. Ireland, Norway, Switzerland, UK and South Korea also registered significant data ARPU. US crossed the ($5, 10%) block, where $5 is the data ARPU and 10% represents the % share of overall ARPU. As of June 2006, US stood at ($6.3, 12%). For detailed US Wireless Market update, please see “US Wireless Data Market – Mid Year Update 2006” ( For more details, please refer to the 9-box diagram in the ppt or the 2006 paper – “Worldwide Wireless Data Trends”; for 2005 comparative numbers, please refer to our paper from last year titled “Perspectives: Wireless Data ARPU”)
- NTT DoCoMo’s position at the top of the wireless data world has been challenged recently by several carriers esp. by its archrival KDDI which surged past DoCoMo for two straight quarters. Their data coordinates respectively stand at ($17.3, 28.9%) and ($16.5, 28%). However, it is 3 UK that is inching towards ($20, 30%) mark with $19.3 data ARPU contributing over 25% to its overall ARPU. 3 Italy with ($15.6, 34%) is also amongst the leaders.
- The biggest % contribution by data ARPU has been consistently registered (since mid 2002) by the two Philippines carriers – Smart Communications and Globe Telecom with almost 50% (or $3) contribution coming from data services.
- Even though China reported approximately $5.5B in data revenues, and the % contribution is over 20%, data ARPU is around $2, confirming what we already know – it’s a volume game. For India data ARPU is just over $1.2. Approximately same for Brazil and Russia. Actually, in 2005 the overall wireless service revenues in US were two times the overall revenues of the four BRIC (Brazil, Russia, India, and China) countries combined. So, lessons are pretty clear as to which markets to approach for what products and services.
- We will have to look at the EOY 2006 numbers but there are some indications of cooling down of data ARPU growth in mature markets of Japan, Korea, and UK. So, while % contribution will increase due to declining voice revenues, data ARPU will not make up for the loss. Most of the mature markets face the same dilemma. In fact, comparing EOY 2005 to 2004 numbers, only a handful nations registered positive increase in overall ARPU with Canada ($3), Korea ($3), Mexico ($1), Taiwan ($1), Brazil ($1), and Chile ($1) showing an increase. For majority of the other nations, the ARPU declined, for example by $2 for US, Thailand, India, Australia, and Argentina. Nigeria recorded a massive $23 decline.
- All the carriers in the top 10 wireless carriers by wireless data revenues list exceeded $1B in data revenues for the first six months of 2006. China Mobile and China Unicom benefited from their huge subscriber base of 274M and 135M respectively while DoCoMo and KDDI did well because they are generating over $17 (or 28%) in wireless data ARPU.
- Carriers with nationwide 3G networks and good distribution of handsets are seeing up tick in data ARPU. The Japanese and Korean carriers along with operator 3, Verizon, Sprint Nextel are all seeing benefits of rolling out their 3G service. Deployment of 3.5G technologies such as HSDPA and EV-DO Rev A (and B) are also gaining momentum. Networks are getting deployed and market is being seeded with some of the early handsets.
- In terms of applications, messaging accounts for lion-share of data revenues. However, other services such as Mobile Music, Mobile TV and video streaming, Mobile Games, IMS, LBS, Mobile advertising, and others have captured industry’s imagination. Though not much talked about, enterprise applications are also being adopted widely esp. in North America as more workers become mobile and corporations seek efficiencies in their operations and supply-chain.
- In Japan and Korea, consumer messaging revenue only accounts for 30% of the data revenues, rest is from multimedia applications, browser traffic, and other infotainment applications. It is almost the reverse in Europe with 70-80% (on average) of the data revenue is coming from messaging. There are some exceptions like Vodafone Spain, Telefonica Moviles Espana, and Eurotel, who have over 40% of their data revenues coming from non-messaging applications. For North America, the data revenue from non-messaging applications (excluding transport) is around 20%.
- China Mobile is challenging Vodafone’s supremacy as most valued telecom operator. For a brief period in August, it was valued higher than Vodafone and is likely to overtake the crown as China continues to add significant number of subscribers while Vodafone struggles.
- WiMax is gaining some traction both in the developed and developing world. However, the case for mobile WiMax is still quite questionable. By the time the embedded devices come to fruition, 3G devices will be quite pervasive and the WiMax services will not be able to compete on price alone. And, a sub $30 WiMax handset for the developing world is nothing short of a pipe dream at this point. WiMax for backhaul makes sense, and some niche scenarios for fixed wireless services will also be successful, but clearly, we will not be witnessing replacement of cellular anytime soon. Free Wi-Fi movement scored more deployments around the world though the business model to support them long-term stays unproven.
Your comments are always welcome.
See you at CTIA.
Ovum concludes that 2006 is the year that 3G is gaining momentum with market migration to 3G looks to be far higher than anyone expected. Western Europe’s net additions to WCDMA, for instance, accounted for 95 percent of total regional net additions in the first quarter. Many of the underlying trends are pointing for a rapid migration to 3G this year: 3G-based packages are a greater percentage of the overall mix, 3G handsets continue to improve in quality and performance and certain services such as music downloads and mobile TV are gaining interest, Ovum says.
We predicted this last year. It also was published here.
Inventors should take note, specially in small companies. Patents provide protection for your ideas and businesses.
Apple Computer Inc. said Wednesday that it is paying $100 million to settle a dispute with rival Creative Technology Ltd. over the design of its trendy and iconic iPod digital media player.
Creative, developer of the Zen digital media player, had sued the Cupertino technology company this year, charging that the iPod took its patent-protected technology to sort and organize thousands of songs. It sought, among other remedies, to halt iPod shipments to the United States from China, where they are manufactured.
Apple countersued, arguing that Creative, based in Singapore with U.S. operations in Milpitas, infringed on three of its patents.
The two companies said Wednesday that they had amicably settled their differences. Apple will pay $100 million to license Creative’s technology and use it in its iPods, with the opportunity to get back a portion of the fees if Creative is able to license that technology to other companies.
I have already saved 100s of $$ using this fare predictor engine
$1B down the drain for Connexion (Boeing). Fundamental problem was in the basics. The demand was there but it was too darn expensive to deploy and took too long. At $500K/installation, it took a while for investment to pay off. Idea is still great. We need both Internet and Power supply on long haul flights. An extra $50 is nothing for the time utilized. Hopefully, someone will pick-up from where Connexion leaves us.
As noted in a note couple of CTIAs ago, Chinese infrastructure providers are starting to operate on the world stage. In a first, ZTE will be shipping 3G terminals to Telus in Canada.
The first batch of CDMA EVDO data cards has been shipped and will be available in major Canadian cities this month. This marks another important breakthrough for ZTE in the European and American high-end markets, the most advanced 3G markets in the world, following its cooperation with top European operators such as France Telecom and Hutchison Whampoa. North America is regarded as the most difficult market to break into and the move is a significant milestone in ZTE’s overseas expansion.
Last week, China Mobile with its massive subscriber base blew past Vodafone as the highest valued company. As of 8/17, China Mobile’s market cap was $136B vs. Vodafone which was around $133B
Some activity in the Mobile Search space
Branded vs. White label mobile search solutions. Carriers are struggling to define their long-term strategy in the space. Do they bring it in-house, go white-label, or just hand over the real-estate to the likes of Google. It is an interesting dilemma for them as they clearly see the opportunities but are also scared to execute on it.
Moconews reports the tussle going on at Vodafone – Vodafone looking for fast exit from Google mobile search partnership
As I have discussed before, various modalities come into play for providing input to the search engine. Google makes the move with the purchase of Neven Vision. With Image strategy behind, next acquisition might revolve around voice search or some forays into LBS.