Always On Real-Time Access

Mobile Breakfast Series Event Roundup March 12, 2010

Posted by chetan in : 3G, 4G, AORTA, ARPU, CTIA, Carriers, European Wireless Market, International Trade, Japan Wireless Market, Location Based Services, MVNO, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Traffic, Music Player, Privacy, Smart Phones, Speaking Engagements, US Wireless Market, VoIP, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , add a comment

Wednesday Morning we hosted the third edition (sold out) of the Mobile Breakfast Series and were grateful for the time and insights from two outstanding speakers. Thanks to our sponsors for the support: Motricity, Openwave, WDSGlobal, and Clearwire

First up was Kevin Martin, former FCC Chairman and current co-chair of the communications practice and partner at the leading law firm of Patton Boggs in Washington DC.

Second speaker was Rob Glaser, Chairman and Founder, Real Networks. This was his first public appearance since he stepped down as CEO of Real Networks.

Kevin talked about the National Broadband Plan that is going to be released this coming tuesday and Rob opined on the opportunities in mobile. I had the good fortune of asking and moderating the Q&A after the initial presentation.

Summary of his comments:

In response to my question if we are becoming too dependent on the spectrum as a way to alleviate data congestion issues, he said that spectrum should be viewed as a renewable resource, however, we should look for expanding fiber as close to end point as possible, look for alternate ways to offload traffic (something I agree with completely)
Technology advancements are allowing for more efficient use of the spectrum
Current carriers have about 450 Mhz, broadband plan seeks to double the spectrum by adding another 500 Mhz though it will be hard to get given the constraints
Broadcasters can make some spectrum available for auction and share the proceeds
We are still early in the Open Access process but full impact is yet to be felt
Beyond the carriers and airwaves, the regulatory authority of the FCC is limited as we go deeper into the ecosystem
Wireline infrastructure shouldn’t be looked as a separate entity. Since there will be a lot of wireless traffic that will go over wireline, it is part of the same infrastructure
USF could be used to expand the broadband services to the masses

Rob’s talk (embedded below) was about the opportunities created by the introduction of smartphone/superphones over the next 34 years.

Opportunities are:

•“Digital Persistence”
•Universal Access across Devices
•Making Discovery Easy
•Empowering Social Expression and Engagement
•Leveraging The Global Nature of These Trends

and of course challenges are:

•Delivering solutions that scale with variable bandwidth and device capabilities
•Creating commercial models across an extremely complex value chain
•Vertical versus horizontal industry structure
•Media industry adaption of new business models
•Educating users on privacy and social implications

In summary,

The Next Mobile Revolution is both a huge opportunity and a massively disruptive force
- §It will ultimately be bigger than the PC or Web 1.0 or 2.0 revolutions
Cross-industry collaboration, while complex, is essential
- §“We must all hang together, or most assuredly we shall all hang separately”

After the intense 30 minute talk that the sold out crowd tried to absorb as much as possible, I asked him what Real would do if he were starting today. And there was a similar question from Andy Kleitsch from Billing Revolution about advise to startups. Here is some of what he had to say (courtesy: Techflash)

On the question of vertical vs. horizontal integration (question from Tricia Duryee of Moconews), he had this to say (courtsey: Techflash)

His presentation below:

The Next Mobile Revolution by Rob Glaser

View more presentations from Lacy Kemp.

We also announced the June 10th event that will all about Mobile Startups. Registration is open. It should be a great discussion with startup CEOs.

Also, announced the Sept 8th event which is of the long-form (day long) – Mobile Future Forward. Great speakers and useful discussion. Stay tuned for more details. We are working feverishly on the details.

Many thanks to our generous sponsors who believe in the vision behind the MFF event – Real Networks and Millennial Media. Your support is much appreciated.

Finally, a personal thanks to all those of you who helped out. You know who you are. We are a pretty lean operation and need assistance from our friends to make every event successful and useful to the mobile community.

Overall, we had as much fun hosting the event as we had in preparing for it. Please let us know your feedback.

Some pictures from the event:

Some additional coverage of the event by some of the most outstanding reporters in the industry - Seattle Times, Techflash, Moconews, GigaOM, and PC World. Thanks.

http://seattletimes.nwsource.com/html/technologybrierdudleysblog/2011306485_rob_glaser_surfaces_outlines_m.html

http://seattletimes.nwsource.com/html/technologybrierdudleysblog/2011306195_former_fcc_boss_on_fedsfree_wi.html

http://techflash.com/seattle/2010/03/rob_glaser_on_apple_android_and_the_future_of_mobile.html

http://techflash.com/seattle/2010/03/rob_glasers_advice_to_startups.html

http://moconews.net/article/419-former-realnetworks-ceo-rob-glaser-says-for-now-apple-has-won/

http://moconews.net/article/419-fcc-former-chairman-says-concerns-for-open-access-persist/

http://gigaom.com/2010/03/10/rob-glaser-defines-the-superphone-and-predicts-the-mobile-future/

http://gigaom.com/2010/03/10/former-fcc-chair-lays-out-the-limits-on-the-agencys-authority/

http://www.pcworld.com/businesscenter/article/191195/former_fcc_chair_says_more_fiber_will_help_wireless_crunch.html

http://www.pcworld.com/article/191200/rob_glaser_thinks_mobile_is_the_next

US Wireless Data Market Update: Q4 2009 and 2009 March 2, 2010

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, Enterprise Mobility, European Wireless Market, IP Strategy, Indian Wireless Market, Intellectual Property, International Trade, Location Based Services, Messaging, Microsoft Mobile, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Traffic, Mobile Usability, Mobile Users, Mobile Wallet, Music Player, Smart Phones, Strategy, US Wireless Market, Unified Messaging, Usability, VoIP, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , add a comment

US Wireless Data Market Update - Q4 2009 and 2009

Download PPT | PDF

http://www.chetansharma.com/usmarketupdate2009.htm

Executive Summary

The US wireless data market grew 5% Q/Q and 24% Y/Y to exceed $11.8B in mobile data service revenues and thus exceeded $10B for each of the four quarters in 2009. For the calendar year 2009, the overall mobile data revenues for the US market grew 29% ending at $44 billion for the year (1% shy of our $44.5 billion estimate). For the calendar year 2010, we expect a 20% increase in mobile data service revenues accounting for over $53 billion in service revenues.

Verizon Wireless edged past China Mobile to become the second biggest mobile data operator by revenues.

The US subscription penetration was approximately 92% at the end of 2009. If we take out the demographics of 5 yrs and younger, the mobile penetration is 99%.

The messaging volume increased 7% from last quarter catapulting US as the number one texting nation by messages/user/month going past the long-time leader Philippines.

For the first time in the history of the US wireless industry, the data traffic exceeded voice traffic for the full calendar year. With almost 400 terabytes of data traffic, it exceeded voice traffic by a significant margin. We expect that the ratio between the two traffic sources is going to double in 2010.

Apple continued its iTunes juggernaut and if measured by billing relationships (of course not all accounts are mobile) Apple is now the 10th largest mobile operator in the world.

Q4 2009 reported a 5.9% increase in GDP compared to the 3.5% increase in Q3 when the recession technically ended. While the overall economy is sputtering towards growth, wireless industry in the US remains vibrant as is evident by the increase in revenues and net-adds which jumped more than 5 million for the first time in 2 years.

What to expect in the coming months?

Christmas quarter generally yields best results of the year. Though the US mobile industry came out pretty unscathed from the recession, it will benefit from the improving economy. As such we expect the US mobile data service revenues to gain 20% to reach $53 billion in 2010. Mobile data will continue to be the engine of growth for the ecosystem providing at least 33% of the overall service revenues by the end of 2010.

The furious cycle of device releases is accelerating and one wonders if the longevity of each device is starting to shrink as even the hit devices like Droid and Nexus One are not allowed enough room to fully capitalize on their initial momentum. The app economy has been expanding as well. Part strategic, part hysteria, everyone is jumping into the pool to tap into the app river to pull in some revenues or use it more strategically to sell more devices, services, or advertising. (Stay tuned for more research on the subject in the coming days)

Microsoft is attempting a comeback with its 7 series devices though the delay in handset release as well as the lack of backward compatibility gives enough time for competitors to plan their moves. We are glad to see the industry going past the “PC like icons” for mobile phones (something we have advocating for more than 10 years, most recently in our paper “The Untapped Mobile Data Opportunity.” This will enhance user experience and help in extracting true value out of the mobile devices.

From the various announcements this year, we can expect an action packed 2010. However, it will be also an year of shakeouts with several key M&A transactions that will winnow down the competitive landscape in many segments.

Q1 2010 will also be important from the regulatory point of view with the national broadband plan being unveiled later this month. With the looming spectrum shortage, regulatory bodies can have a significant impact on the competitiveness of a nation. For example, in India, regulators haven’t been able to get their acts together for the past 3-4 years and its citizens continue to suffer from 2G. Similarly, many countries in South America have imposed unnecessary spectrum caps. The industry and regulators need to work hand-in-hand to make progress beyond speeches and paperwork.

To start planning for 4G, 5G, and beyond, US should think about rolling a 50 year broadband plan. While more spectrum is always helpful, will we have all the spectrum we need in 2050? or do we need to invent new technologies and business models that use spectrum more wisely? This topic will keep the industry occupied for some time to come. (Former FCC Chairman, Kevin Martin will be headlining our Mobile Breakfast Series event on March 10th to discuss the Spectrum Crises).

2010 will also be the year of network expansion with HSPA+, WiMAX, and LTE all coming into play in the US. As we had anticipated last year, the mobile data traffic kept on growing disproportional to the revenues. At the end of 2009, the US mobile data traffic was almost 400 petabytes, up 193% from 2008. To truly tackle the problem head-on, industry will need to adopt a multi-pronged strategy to manage their traffic more effectively. We discussed mobile data traffic in much more detail in our popular paper "Managing Growth and Profits in the Yottabyte Era." We will be issuing an update later this quarter so stay tuned.

It is also good to see the mobile industry expanding into vertical segments like Health and Retail. More discussion to come on these topics.

We will be keeping a very close eye on the micro- and macro-trends and reporting on the market on a regular basis in various private and public settings.

Against this backdrop, the analysis of the Q4 2009 and 2009 US wireless data market is:

Service Revenues (Slides 8, 17)

The US Wireless data service revenues grew 5% Q/Q to $11.8B in Q409. Compared to Q408, the data service revenues grew 24%.
Verizon and AT&T accounted for 88% of the increase in data revenues in Q4 2009.
The US mobile data service revenues crossed $10B for all the four quarters and stays ahead of Japan and China by a distance.
AT&T experienced the most growth with over 7% increase Q/Q followed by Verizon at 5%.
Verizon’s data revenues exceeded $4B for the second straight quarter and is only inches behind the global leader of over 10 years NTT DoCoMo.
AT&T and Verizon now account for 69% of the market data services revenues and 62% of the subscription base.
The average industry percentage contribution of data to overall ARPU is now 29%. US market is likely to pass the 30% mark in Q1 2010.
Verizon edged past China Mobile to become the second biggest mobile data operator by revenue behind NTT DoCoMo. The top four US carriers are now a permanent fixture in the top 10 global operators by mobile data service revenues occupying #2, #4, #6, and #8 spot respectively. Apart from NTT DoCoMo and China Mobile, Verizon Wireless and AT&T are the only two other operators generating more than $3B in quarterly mobile data service revenues.

ARPU (Slides 9-12)

Overall ARPU decreased by $0.45. Average voice ARPU declined by $0.98 while the average data ARPU grew by $0.53 or 4%.
Verizon led in (blended) data ARPU with $16.24 followed by AT&T and Sprint. In terms of % contribution, all the top three operators exceeded the 30% mark (Verizon became the first operator to do so last quarter). T-Mobile ended the year with 22.2% of its revenue coming from data services.

Subscribers (Slides 13-15)

In Q409, in terms of net-adds, the US market reversed the trend of the last 8 quarters and increased net-adds by 85% Q/Q to add approximately 5.1M new subscriptions.
The messaging volumes in the US market now average almost 592 messages/subscriber/month thus becoming the number one texting nation going past Philippines.
In terms of net-adds, thanks to the boost from the iPhone, AT&T led for the third straight quarter with 2.7M net-adds, edging its friendly rival Verizon which added 2.1M net subscriptions.
T-Mobile and Sprint improved their net-adds from last quarter though it was primarily from the prepaid segment.

Applications and Services

Non-messaging services continue to grab 60-65% of the data revenues for the US carriers.
There are probably 18-20 sub-segments within mobile data services and consolidation looms. While the valuations are still high for rapid consolidation, we think that due to recession pressure, the M&A scene is starting to heat up esp. in mobile advertising with the acquisitions of Admob and Quattro Wireless.
The usage and data consumption trends are enabling carriers to accelerate their 3.5G/4G plans and develop long-term business and technical strategies.

Handsets

Nokia sold 129M+ units in Q4 2009 including 21M smartphones. Samsung again had a solid quarter with over 69M devices sold maintaining its market share at 21%. LG Electronics at 10%, Sony Ericsson at 4%, and Motorola at 4% rounded up the top 5.
The constant drumbeat of new devices continued with Droid, Nexus One, and the fabled iPad.
The growth in smartphone usage is also putting pressure on the networks which are not able to handle the load during peak times in certain cities thus forcing carriers to look for alternate strategies to satisfy the demand for broadband.

Policy and Regulations

Q4 was also notable for the FCC scrutiny of the wireless industry. In outlining the four key principles of a) looming crisis of spectrum shortage b) removal of red tape c) enforce net-neutrality and d) open Internet, things have already started to change in the US Wireless Industry. The US broadband plan is scheduled to be unveiled later this month and can set the tone of innovation and regulation in the coming years.

Open

The appstores battle is intensifying with OEMs and carriers are announcing their plans and some of them are opening their wares to woo the developer community. The number of non-operator appstores jumped 375% in 2009. In the midst of the appstores hoopla, Apple announced the passing of the 3 Billion download mark with increasing number of developers participating the ecosystem.

Data Traffic (Slide 16)

· For the first time in the history of the US wireless industry, the data traffic exceeded voice traffic for the whole calendar year. With almost 400 terabytes of data traffic, it exceeded voice traffic by a significant margin. We expect that the ratio between the two traffic sources is going to double in 2010.

Misc.

India continues to be the hottest market on the planet in terms of net-adds with (again) a world record-setting month in Jan 2010 with 19.9 million net adds. To give you a perspective, this is almost 1.5 times the number of subscribers US added in the whole year. It is like adding a Canadian wireless market every month. For the year 2009, India added 177 million subs vs. 106 million for China. Making money on the net-adds is a different proposition all together (more discussion on the international market in our global market update later this month)
Willcom, the small Japanese carrier that started the flat-rate unlimited phenomenon filed for bankruptcy last month.
Softbank of Japan looks set to be the first major operator (outside of Philippines) with more revenues coming from data services than voice.

We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, and articles. The next US Wireless Data Market update will be released in May 2010. The next Global Wireless Data Market update will be issued in March 2010.

Your feedback is always welcome.

Should you have any questions about navigating or understanding the economic and competitive icebergs, please feel free to drop us a line.

Thanks.

Chetan Sharma

Disclaimer: Some of the companies mentioned in this note are our clients.

New Whitepaper: Mobile VoIP – Approaching the Tipping Point February 17, 2010

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carnival of Mobilists, Carriers, Devices, Enterprise Mobility, European Wireless Market, India, Intellectual Property, Japan Wireless Market, M&A, MVNO, Mergers and Acquisitions, Microsoft Mobile, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Traffic, Mobile Usability, Mobile Users, Mobile Wallet, Patent Strategy, Privacy, Smart Phones, Speech Recognition, US Wireless Market, Unified Messaging, VoIP, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 3 comments

http://www.chetansharma.com/mobilevoip.htm

Mobile VoIP - Approaching the Tipping Point

Sponsored by Skype

This paper is a collaboration with Ajit Jaokar (FutureText) in London

Over the course of the last decade, mobile devices have become the most ubiquitous consumer electronic devices ever invented. Even in the poorest of the nations, mobile phones have evolved from being a luxury to an indispensible necessity. The paradigm of communication itself has undergone a significant transformation from just voice to multimode interaction. The trend is also discernable in the revenue numbers from the advanced mobile markets where voice revenue per user have been declining over the course of the last decade while most of the growth is coming from mobile data services. Mobile data services have evolved significantly from simple text messaging to multimode communication involving text, VoIP (voice over IP), video, and other forms of messaging and social networking interactions.

As we head into the next decade, the competitive landscape is going to change from year to year and sometimes even quarter to quarter. For major service providers, competition is no longer just from an operator who provides voice and data services but any company that captures the communication value chain. It is no longer sufficient to rely on voice revenues but providers need to think communications in a much more holistic form. Once the transport layer becomes all-IP in a given network, voice is nothing but another application that will work and interact with other applications in tandem often in real-time. The fear of cannibalization are unwarranted as our research shows that by offering consumers comprehensive services, the lifetime value of customers can be increased, churn can be reduced, and the overall value proposition of the operator increases tremendously.

The forces of technology, business models, consumer expectations, regulatory regimes, competition, and collaboration will help define the communication landscape of the next ten years. This paper will take a look at the evolution of the Internet, mobile broadband, and mobile communication and how consumer behavior and expectations have changed. Next, the emergence and the role of VoIP is discussed in further detail before we delve into the intricacies of communication economics to dispel some myths and layout the framework for how operators should approach the new communications world.

Given the embrace by major tier-one operators, we believe that mobile VoIP is on the verge of becoming an integral part of the communications framework. This acceptance represents a tipping point in the evolution of mobile VoIP. The ecosystem participants who embrace and collaborate to provide a holistic and comprehensive communication solutions stand to benefit the most.

Download Paper (pdf)

New Whitepaper: Role of Optical Wireless Broadband in the Evolving Mobile Ecosystem January 27, 2010

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, Devices, European Wireless Market, Indian Wireless Market, Infrastructure, Location Based Services, M&A, Microsoft Mobile, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 3 comments

Role of Optical Wireless Broadband in the Evolving Mobile Ecosystem

http://www.chetansharma.com/opticalwirelessbroadband.htm

Sponsored by Skyfiber

These are exciting times in the wireless industry. The innovation in technology, services, and business models is driving the global industry to new heights. While the global markets were feeling the pain of a brutal recession, the wireless industry for the most part sidestepped the crisis, especially the US and Asian markets. In the US, 2009 was a banner year for the mobile data services and applications. Each of the four quarters exceeded $10 billion in mobile data services revenue and the subscription penetration was approximately 93% by the end of the year.

The mobile industry is going through significant transition from being voice-centric to data-centric, from consumers spending 90% of their time talking to 80% of the time spending on mobile data and games. The main drivers of such an evolution are: better devices like the iPhone, Droid, Pre, Bold, etc., higher capacity networks such as WCDMA, HSPA+, and EV-DO Rev A, flat rate data pricing, and a heightened consumer awareness of mobile applications and services. This has boosted both the consumer engagement and the revenues from data services.

However, this increased usage comes at a cost. As users are becoming accustomed to an always-on, always-connected world of mobile, they are consuming tremendous amount of data that is putting significant burden on the networks especially the backhaul. Further, as the need for the bandwidth rises exponentially, we are approaching what FCC’s Chairman Genachowski termed as “a looming spectrum crisis.” In light of such infrastructure challenges, the industry needs to think outside-the-spectrum-box and think long-term else we will be in a perpetual cycle of crises. Traditional transmission technologies like Fiber and Microwave will benefit from complimentary technologies such as Optical Wireless Broadband (OWB), which enhances the operator’s toolbox to build out efficient broadband connectivity.

This paper discusses the mobile data growth, the backhaul demands, and the looming spectrum crisis in more detail. Further, the paper discusses the requirements for backhaul to support next generation traffic and the role of new technologies such as Optical Wireless Broadband to provide backhaul capacity solutions that are both economical as well as future-proof.

Download Paper (pdf)

2010 Mobile Industry Predictions Survey January 3, 2010

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carnival of Mobilists, Carriers, Devices, Enterprise Mobility, European Wireless Market, Federal, Gaming, General, IP, IP Strategy, India, Indian Wireless Market, Infrastructure, Intellectual Property, International Trade, Japan Wireless Market, Location Based Services, M&A, MVNO, Mergers and Acquisitions, Messaging, Microsoft Mobile, Middleware, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Traffic, Mobile Usability, Mobile Users, Mobile Wallet, Music Player, Networks, Partnership, Patent Strategies, Patent Strategy, Patents, Privacy, Smart Phones, Speaking Engagements, Speech Recognition, Storage, Strategy, US Wireless Market, Uncategorized, Unified Messaging, Usability, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 5 comments

2010 Mobile Industry Predictions Survey

http://www.chetansharma.com/MobilePredictions2010.htm

Mobile Predictions Survey (pdf)

Mobile Predictions Survey (ppt)

First things first. From all of us at Chetan Sharma Consulting, we wish you and yours a very happy, healthy, and prosperous 2010. Thanks to all who participated in our 2010 Mobile Predictions Annual Survey. We have found it is the best way to think about the trends coming our way.

Before we dive into the survey results, let’s do a quick wrap-up of the year that was. Well, since we just completed one heck of a mobile decade, let’s do a quick jog down the memory lane.

The Last Decade: 2000-2009

Each new decade brings its own consumer and technology trends. During the 2000s mobile cemented its place in the global society fabric, the use of mobility became addictive and pervasive, to be without mobile seemed a curse and innovation blossomed and took user expectations to new heights.

From a pure statistical point of view, the global mobile subscription penetration grew from 12% in 2000 to approximately 68% in 2009 - phenomenal by any measure. The overall revenues grew over 400%, the data revenue grew 32,600% and the total subscriptions grew 563%. NTT DoCoMo paved the way with the i-mode launch in 1999 and they were the operator to emulate throughout the last decade, leading every single year in data revenues, in new application and service revenue sources, and in innovation and risk taking. They tried to export the success to other regions with little reward but DoCoMo clearly led the industry in taking mobile devices where they have never gone before.

China and India were late to the party but during the second half of the decade caught up with the western world and eventually surpassed all nations becoming number one and two nations by subscriptions respectively. In 2006, China Mobile became the most valuable operator passing Vodafone.

Mobile devices went significant transformation as well. From the early Bluetooth, camera, and music phones to the iPhones, the Storms, and the Androids, the industry was transformed by the introduction of Apple’s iPhone in 2007. While Bluetooth, sleek designs, camera phone defined the first half of the decade, the second half was all about the applications and the mobile web. While Nokia dominated the entire decade in terms of the sales and profits, having missed the touch revolution, it leaves the decade a bit battered and a bit behind playing catch-up to the newcomers who profoundly disturbed the status quo.

Razr carried Motorola through 2006 when its global share peaked but was left to reinvent itself during the second half. It seems to have redeemed itself with the successful launch of Droid and upcoming Android devices. While many in the industry predicted RIM’s demise, the company has only gotten stronger and is looking good for the 2010s. The emergence of Samsung and LG as strong players in the mobile ecosystem was also a big story of the decade with Samsung increasing its share by 380% and LG by 575% becoming the number 2 and 3 players respectively.

While Microsoft’s Windows Mobile had an early start and the enterprise market share, it lost its way through several missteps and is on dialysis as we enter the new decade. One shouldn’t count WM out though but there is a lot of work to be done before it can capture the imagination of the ecosystem which has been sequestered away by iPhone and Android.

While many new application areas were introduced during 2000s, none was able to displace SMS as the leading app category by usage and revenues. However, it’s relative share has started to come down especially in North America and Western Europe.

As data usage grew, so did the data traffic bringing many data networks to their knees. We expect the data traffic consumption to only accelerate. Many people are underestimating the growth rates (as they did previously) and the strain the increase in consumption will put on the unprepared networks. Projector phones will take media consumption to a new level. Data management is going to be big business in the 2010s.

Overall, the mobile industry became a trillion dollar industry in 2008 and the data revenues are increasing in almost all regions. Voice is being commoditized at fast pace and that has put the traditional economics and ecosystem wealth distribution in topsy-turvy.

The US market also experienced tremendous growth with mobile data service revenues climbing 21,327% and becoming a mainstay in the mobile economy. In 2008 it crossed Japan as the most valuable mobile data market. US was late in adopting SMS but caught fire once American Idol started using it and even played a good role in the 2008 Presidential election in showcasing the power of mobile. Verizon started the decade being the number one operator and after trading places with Cingular and ATT grabbed the title back in 2009 (after the Alltel acquisition) to become the most dominant carrier in North America. Many smaller players competed by being innovative with Cincinnati Bell launching the fist UMA device, Sprint the first mobile eReader, and TMO launched the hotspot business which has now become an essential component of an operator strategy going forward.

Mobile is also replacing landline at a much faster pace than expected and within the first half of the new decade, we will have majority of the users using mobile vs. landline. Just like the last decade, this one starts with a new standard deployment of LTE that will keep operators and vendors busy throughout the decade. However, a lot of the developing markets will still be deploying 3G during the first half of the decade.

Infrastructure providers suffered the most in the decade bookended by the two recessions. Consolidation of giants (Alcatel Lucent, Nokia Siemens), bankruptcies of the famous (Nortel), and uprising of the upstarts (Huawei) pretty much defined the decade for the segment. Ericsson and Huawei enter the new decade from a strong position and looking to dominate the global markets.

The last decade was also marked by some prominent IP battles such as RIM vs. NTP, Qualcomm vs. Broadcom, Sony Ericsson vs. Samsung, Upaid vs. Satyam etc. (disclaimer: we worked on some of these cases and testified as an expert)

Here is our “subjective” list of movers and shakers of the last decade

2000-2009

2010-2019

Operator of the Decade

NTT DoCoMo

DCM led the way in almost all new category of apps and services. Its data service revenue was highest in each of the last 10 years

DCM will continue to lead along with KDDI and SKT. However, it might be the carriers with tremendous scale who will have the calling cards in the new decade. Watch for China Mobile, Vodafone/Verizon, Telefonica, Orange, Bharti, Unicom, Singtel

OEM of the Decade

Nokia

Nokia dominated in sales and revenues in each of the 10 years and while the last couple of years took some shine off its glorious past, the company nevertheless came out ahead

RIM, Apple, Nokia, Samsung

Smartphone OEM of the Decade

Apple

Smartphones as we know them were introduced by RIM but Apple defined the category and the subsequent ecosystem

This space will be very competitive with Apple still the gold standard to beat

Infrastructure Provider of the Decade

Ericsson

Its prime rivals struggled to stay afloat while Ericsson grabbed most of the revenues from infrastructure contracts and is very well positioned for the next decade

Ericsson is joined by Huawei as the two top infrastructure provider with Huawei giving tough competition for LTE contracts. ZTE and other Chinese infrastructure providers will also replace some of the incumbents

Nation that led in mobile data

Japan

This is a no brainer. Japan led with Korea a close second. Finland, UK also impressed

US, China, and India are well positioned to make an impression but most likely during the second half. Japan will still be a major player

Device of the decade

iPhone followed by Razr

iPhone impressed with form and function while Razr with its global sales making it a top selling device of all times

The field might get more crowded as all OEMs focusing on the smartphone category. However, OEMs who also focus on the 90% of the market w/o smartphones might win the top prize

The year 2009

Apple continued to dominate the headlines for the third straight year - whether it was the launch of 3GS or the upcoming introduction of the fabled tablet. Google too kept the ecosystem active. It has executed on its mobile strategy with brilliant acumen though causing significant consternation amongst its partners who it needs to be successful. It has been often misunderstood by competitors, regulators, and partners. Often, they have focused on Google’s tactics vs. its strategy. Look for these two players to be very aggressive as they try to fight for the mantle and the mindshare.

While Nokia leads the OEM space by a good distance, its momentum in the smartphone space left a lot of question marks. Motorola made a credible comeback with Cliq and Droid. Samsung and LG continued to innovate and expanded on their share of shipments and revenues.

India outpaced China in net-adds and crossed 500M though it is still quite behind China’s 750M. The M&A and the consolidation process became active in Asia with several of the big regional operators looking to flex muscles in the international markets. After several delays, China started deploying 3G while India again fumbled and postponed its 3G auction.

US mobile data market continued its pace in 2009 with each of the four quarters exceeding $10B in data service revenues. The gap between the top two operators and the rest grew to be the biggest in the decade and the industry weathered the recession with ease. There was a clear shift towards prepaid especially for Sprint, T-Mobile, and the tier 2/3 operators.

2009 was also defined by significant activity on the application front. With Facebook eclipsing 100M subscribers and Appstore exceeding 2.5B downloads, sky is the limit.

The year also saw an unprecedented growth in mobile data consumption. As we had predicted, for some of the networks, the growth proved to be a double-edged sword. Many in the industry are banking on LTE to help relieve the pain but will be surprised that depending solely on the upgrade strategy will not be enough. Declaring spectrum as a looming crisis, FCC also started tinkering with the mobile industry and the broadband plan.

Japan exceeded 90% in 3G penetration while US subscriptions ventured into the 90% territory. Most of western Europe is way past 130%.

All in all, a terrific year considering that we went through one of the worst recessions in a generation. As we bid goodbye to the last decade, Nexus One and iTablet only serve to whet our appetite of what’s to come.

On a personal note, we started our consulting practice this last decade as we were coming out of the bubble recession and have been fortunate to work with some of the brightest brains and companies in the global ecosystem. We also had a chance to work on some key initiatives that impacted the ecosystem in profound ways. Many thanks to our clients, colleagues, friends, and readers. We will be involved with many new initiatives over the next decade and are looking forward to the conversations through the research notes, books, speeches, panels, whitepapers, blog posts, facebook and twitter feeds, and more.

Thanks and Happy New Year. May the upcoming decade leave you happier, healthier, and more successful than the previous one.

As we eluded to earlier, 2010 will be a pretty eventful year from several perspectives: business models, user experience and expectations, ecosystem posturing, disruption, and friction. How are things going to shape up? What will be hot and what will fade into oblivion? How will competition shape up the new sub-segments?

We put some of the questions to our colleagues in the industry. We were able to glean some valuable insights from their choices and comments. This survey is different from some of the others in the sense that it includes industry movers and shakers participation. Executives and insiders (n=150) from leading mobile companies across the value chain and around the world opined to help us see what 2010 might bring.

11 names were randomly drawn for 3 special prizes. The winners are:

Claire Boonstra, Cofounder, Layar- INQMobile 3G Chat device
Michael Libes, CTO, GroundTruth - Open Mobile Book
Henri Moissinac, Head of Mobile, Facebook - Open Mobile Book
Subba Rao, CEO, TataDoCoMo - Open Mobile Book
Saumil Gandhi, Product Manager, Microsoft - Open Mobile Book
Sarah Reedy, Senior Editor, Connected Planet - Open Mobile Book
Mike Vanderwoude, VP & GM, Cincinnati Bell Wireless - 2010 Mobile Almanac
Pinney Colton, VP, GfK - 2010 Mobile Almanac
Tim Chang, Principal, Norwest Ventures - 2010 Mobile Almanac
Laura Marriott, President - 2010 Mobile Almanac
Asha Vellaikal, Director, Orange - 2010 Mobile Almanac

Thanks to INQMobile and my friend Ajit Jaokar for contributing the prize gifts.

Despite conventional wisdom, what will not happen in 2010?

There were many. Sampling - Verizon iPhone, Microsoft Phone, Sprint will not be bought, Femtocells won’t gain traction, RCS will not happen, Google will not enter handset market directly, iPhone won’t lose steam, Android won’t bring coherence, NFC won’t take off, WiMAX won’t disappear, Nokia won’t bounce back, Palm won’t die, “Year of Mobile” noise won’t subside, carriers won’t be delegated as dumb-pipes.

It is hard to cover the mobile industry in 20 questions. As pointed out by our panelists, there are a number of other issues and opportunities that will help shape our ecosystem - monetization of social networks, augmented reality, the fight for mobile advertising dollars, continued impact of globalization, security and privacy, NFC, IMS, VoIP, enterprise apps beyond email, battery improvements, new interaction modalities, health risks of RF radiation, Mobile 3.0, LTE, single purpose devices, 3G in India, Bada, app vs web, developer turmoil, featurephones, smart grids, M2M, Chrome, etc.

However, be rest assured, we will be tracking these and much more throughout the year and sharing them through various channels.

Thanks again to everyone who contributed. We will be calling on you again next year. We are clearly living in "interesting times" with never a dull moment in our dynamic industry. It has been a terrific year for us here at Chetan Sharma Consulting and we are looking forward to the next decade and seeing many of you along the way.

We hope you enjoyed gaining from the collective wisdom. Your feedback is always welcome.

Be well, Do Cool Work, Stay in touch.

Thanks.

With warm wishes,

Chetan Sharma

Disclaimer: Some of the companies mentioned in this note are our clients.

Now onto the 2010 Mobile Industry Predictions Survey Results

The panel comprised of movers and shakers from around the world

What will be the biggest stories of 2010?

Jan seems to be the Google Phone vs. Apple Tablet matchup. Our panel though voted for the continued growth in mobile data as the top story.

Have we recovered from the recession? (Please select one)

Majority thought we are out of it though some might still feel the pinch

Who will be the most open player in the mobile ecosystem in 2010? (Please select one)

Google has done a great job at maintaining its image as THE open leader

Will Android handset sales exceed iPhone’s in 2010? (Please select one)

Despite Androids coming in droves, iPhone will still be the king of the hill

When will we see tiered pricing plans for smartphones in the US from tier 1 operators? (Please select one)

There are indications that this might happen sooner rather than later

What will happen to the mobile prepaid subscriber base in the US? (Please select one)

Prepaid made a strong comeback in 2009 and a good majority thought that the trend is likely to continue

By how much will the mobile advertising ad-spend increase in 2010? (Please select one)

Mobile Advertising was the only advertising segment with positive growth last year so it is no surprise that folks expect it to more than double this year

What will be the impact of the FCC’s national broadband plan on the mobile industry in 2010? (Please select one)

Not much is expected from the various rulings that might come this year with most expecting the courts to have the final word.

Who will be the mobile comeback story of 2010?

Having bet its future on Android, Motorola was voted as the comeback kid of 2010

What will be the impact of Google Phone?

It’s pretty clear, Google and Apple are duking it out for the developer mindshare. Google wins in either case.

Which areas will feel the most impact from FCC?

Net neutrality is the area where they will have the most impact

Which solutions will gain the most traction for managing mobile data broadband consumption?

While only a holistic approach can provide complete relief, tiered mobile data pricing might have the most impact

When will the carrier-branded appstores lose steam? (Please select one)

Most expect carrier-branded appstores to be a thing of the past in 2010

What will help mobile cloud computing gain traction in 2010?

Mobile cloud computing is gaining steam and the reason is storage and media

What will be the most successful non-mobile-phone category in 2010? (Please select one)

Netbooks seem to be the strongest category followed by eReaders, Tablet, and M2M

What will be the breakthrough category in mobile in 2010? (Please select one)

Mobile Advertising and Mobile Payments share the top honors

By the end of 2010, which will have more subscribers? (Please select one)

LTE might have the momentum but WiMAX has the subscribers

How will Netbooks do through the operator channel? (Please select one)

No major impact from the operator channel

Which standards will gain traction?

No major impact from the standards

What mode of mobile payments will get any traction in North America and Western Europe in 2010?

The category will expand in different ways with more items being charged on the operator bill

New Whitepaper: The Untapped Mobile Data Opportunity December 16, 2009

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, Enterprise Mobility, European Wireless Market, General, IP, IP Strategy, India, Indian Wireless Market, Infrastructure, Intellectual Property, International Trade, Japan Wireless Market, Location Based Services, M&A, MVNO, Microsoft Mobile, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, Mobile Users, Networks, Smart Phones, Speech Recognition, Storage, US Wireless Market, Unified Messaging, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 3 comments

http://www.chetansharma.com/untappedmobiledataopportunity.htm

The Untapped Mobile Data Opportunity

Roundup of second Mobile Breakfast Series event – Mobile Broadband December 6, 2009

Posted by chetan in : 3G, AORTA, ARPU, CTIA, Carriers, Indian Wireless Market, Infrastructure, Location Based Services, Mergers and Acquisitions, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Search, Mobile TV, Mobile Users, Mobile Wallet, Networks, Speaking Engagements, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 3 comments

The second Mobile Breakfast Series Event was held at the picturesque Harbor Club in downtown Seattle on Dec 4th. The topic was “The Impact and Evolution of Mobile Broadband.” The lineup of speakers was awesome with who’s who of the mobile broadband world opining about the state of the industry, the opportunities, and challenges posed by the growth in mobile broadband:

Neville Ray, Senior Vice President of Engineering, T-Mobile USA

Hank Skorny, Senior Vice President, Media Cloud Computing and Services, Real Networks

Ken Denman, CEO, Openwave

Dow Draper, Vice President, Technology Partnerships, Clearwire

Charlie Martin, Wireless CTO, Huawei Technologies

Stacey Higginbotham, Senior Writer, GigaOM (moderator)

First of all, a big thanks to our generous sponsors: Motricity, Openwave, and Clearwire of supporting the event series. I am happy to report that Motricity has signed up to be the sponsor for the entire 2010 season. So, thanks Jennifer Moranz and Brendan Benzing. Thanks also to Ken Denman and Lupe Downing at Openwave, and Jeff Giard and Scott Richardson at Clearwire for their support. Thanks also to our esteemed panelists who have taken the time out of their busy schedules to be here with us this morning, esp. Ken, Charlie, and Stacey who had to hop on a plane to be at the event. Also, thanks to GigaOM and Moconews for being such terrific media sponsors.

As our operators continue to enhance the infrastructure both in the US as well as abroad, it is creating new opportunities and challenges for the industry. As you know, our friends at the FCC are also very consumed by the task of creating a National Broadband Policy and mobile is a key component of that proposal.

It was one of the best discussions on mobile broadband I have heard all year long. Panelists were really frank and insightful.

The salient points of the 90 minute discussions were:

The disparity between the available bandwidth and the bandwidth demand is becoming apparent and the industry is scrambling to find solutions to stay ahead of the curve.
Even at these high usage rates, mobile data is quite profitable for the operators. Vendors typically don’t a full grasp of the carrier economics and end up making some product choices that are not that directly relevant or useful for the carriers.
Consumers are willing to pay more for better access, higher speeds, and good content and significant opportunities await us in the coming years.
There is no such thing as “free lunch” and someone has to pay for the bandwidth. Sometimes it feels that the pie is not big enough to feed all the hands that are the in the revenue share pot.
Spectrum and capacity is king and whoever has a good spectrum tends to benefit competitively.
Out of necessity, companies come up with innovative solutions e.g. T-Mobile focusing on WiFi in the early days when AT&T didn’t want to touch it and Verizon mocked it. Now WiFi is central to their mobile data strategy.
Traffic from non-phones will exceed that from the typical feature and smartphones.
Business and revenue models that will help sustain the industry are going to come from outside the industry.
With so much at stake, carriers will figure out ways to participate the appstore value chain.
Browsers have shattered the control of the ecosystem and we are just at the tip of the iceberg.
We will soon see the return of the tier-ing price plans. QoS will enter the picture soon. Likely to have platinum vs. gold service concept emerge
Solutions – mobile analytics, video optimization, traffic shaping – it comes down the “art of delivering a packet”
Apps are not a zero-sum game.
There will be a metamorphosis of physics and economics of mobile data, new group of players will emerge.
Carriers have historically not done a good job of picking winning applications but they will figure ways to participate in the new ecosystem.
Compared to the online Internet market, mobile Internet market is quite nascent and we are expected to see significant opportunities emerge in the next couple of years.
While iPhone has been a great device, it is the Google applications that make it so popular.
Presence, social networking, and connectedness will all help in creating a brave new world of mobile data services.
More Carrier branded solutions to come.
If carriers are cut of the revenue stream, they might have less incentive to upgrade their networks.
Technographics, Psychographics, and Demographics data very useful for application developers and we can expect operators to open up consumer information gradually for the ecosystem.
Some see Android getting more closed with each release, OEMs need to open up the device for app developers to take full advantage of capabilities.
T-Mobile has been rapidly expanding their 3G footprint with expected coverage increase to 200M by end of the year.
The levers operators can use to control data usage – pricing, QoS
FCC’s action is having a positive impact on the industry though we need a lot of work (and a lot of spectrum)

Also, Tricia Duryee does a good summary of the discussion at Moconews

Our next event is looking to be another sellout affair with tech titan Rob Glaser, Founder, Chairman, and CEO of Real Networks headlining the event. Be sure to register early to avoid any sellout blues. Date: March 10, 2010.

Until then, a very happy new year to you and yours and have a terrific holiday season that helps you prepare for a successful 2010.

US Mobile Data Market Update Q3 2009 November 9, 2009

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carnival of Mobilists, Carriers, Devices, European Wireless Market, IP Strategy, Indian Wireless Market, Japan Wireless Market, Location Based Services, M&A, MVNO, Mergers and Acquisitions, Messaging, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, Networks, Partnership, Speaking Engagements, US Wireless Market, Unified Messaging, Usability, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 4 comments

Download PPT | PDF

Executive Summary

The US wireless data market grew 5% Q/Q and 27% Y/Y to exceed $11.3B in mobile data service revenues and thus exceeded $10B for the third straight quarter. As we mentioned in our Q1 2009 research note, given the strong growth in data revenues and overall service revenues, the worst is over for the US mobile industry. The US market touched 25% penetration of smartphones in Q3 2009, a new milestone.

While the flailing economy hit certain segments of the wireless ecosystem hard esp. the infrastructure and handset segments, consumers haven’t really pulled back on the mobile data overall spending. Additionally, the CAPEX spending has stayed strong in 2009 given the activity around 3G/4G deployments and trials. As expected, there was an increase of prepaid subscribers which dropped the overall revenues for some of the carriers. The US subscription penetration was approximately 91.3% at the end of Q3 2009.

As we mentioned in our last three research notes that this time around, the fate of the US mobile industry is more closely tied to the overall economy compared to the previous recessions. As the consumer sentiment improved over the last two quarters along with better than expected Q1-3 2009 earnings from corporations, the mobile industry is back on track. While the structural flaws in various industry segments remain, the outlook for the Q4 2009 and 2010 remains bright and we are expecting the overall data revenues to now increase by over 30% compared to 2008 with a record-setting Q4.

Q3 2009 reported a 3.5% increase in GDP compared to the 1% decline in Q2 and 6.4% decline in Q1, thus marking the official (technical) end of the recession. The GDP is expected to change by 3.2% for 2009 and the service revenues are expected to account for 1.13% of the US economy by year-end. Note: For a detailed discussion of the US wireless industry in recessions, please see 2008 US Wireless Market Update.

So, what does this mean? Well, the markets can still be volatile, but overall the market seems to be feeling better about the economy than it was in February. The Conference Board Consumer Confidence Index though retreated from June is at a healthy 47.7.

What to expect in the coming months?

The high unemployment has slowed the growth in the data card segment but the smartphone consumers have more than picked up the slack. Also, as expected, there was a shift from postpaid to prepaid in some user segments. For example, for T-Mobile, prepaid accounts for almost 20% of their customer base compared to 17% from an year ago. The fight for the low-end customer is also having an impact on the traditional prepaid players and the price pressure is reducing their margins. It is quite likely that 50-60% of such consumers don’t go back to postpaid thus permanently lowering the ARPU base for such customers and carriers who have experienced more postpaid to prepaid shift will have to make up for the lost revenues elsewhere.

In fact, the churning in the last few quarters has distanced the top two (AT&T and Verizon) and the next two (Sprint and T-Mobile) by the biggest gap in the history of the industry. By the end of 2009, this gap will rise to 36% compared to 28% at the end of 2008 and 21% in 2002.The "Rest" category has essentially diminished from the market dropping from a dominant 43% market share in 2002 to 12% in 2009.

The trend of the landline replacement by Mobile continued in Q3 2009, now reaching almost 25%. In the third quarter, messaging growth slowed down. The messaging volume was up only 4% and messaging revenues were up 3% QoQ. With its expanding 3G network, T-Mobile like its peers has started to benefit from smartphone penetration reaching to 6% of its subscriber base. Overall, The increased use of smartphones and datacards is putting a pressure on carrier networks and accelerating their strategies to deploy LTE/WiMAX. We estimate that by end of 2009, the US mobile data traffic is likely to exceed 400 petabytes, up 193% from 2008. To truly tackle the problem head-on, operators will need to adopt a multi-pronged strategy to manage their traffic more effectively. We discuss mobile data traffic in much more detail in our paper "Managing Growth and Profits in the Yottabyte Era." We will have more on this subject in the coming days (You can also read our RCR Wireless columns on the subject - Defining Mobile Broadband and Solutions for the Broadband World).

We will be keeping a very close eye on the micro- and macro-trends and reporting on the market on a regular basis in various private and public settings.

Against this backdrop, the analysis of the Q3 2009 US wireless data market is:

Service Revenues (Slides 11-12, 17, 19)

The US Wireless data service revenues grew 5% Q/Q to $11.3B in Q209. Compared to Q308, the data service revenues grew 27%.
Verizon and AT&T accounted for 80% of the increase in data revenues in Q3 2009.
The US mobile data service revenues crossed $10B for the third straight quarter and stays ahead of Japan and China by a distance.
AT&T experienced the most growth with over 6% increase Q/Q followed by Verizon and Sprint at 5%.
Verizon’s data revenues exceeded $4B/quarter only inches behind the global leader of over 10 years NTT DoCoMo.
AT&T and Verizon now account for 68% of the market data services revenues and 61.5% of the subscriber base.
The average industry percentage contribution of data to overall ARPU is now 28%. US market is likely to touch the 30% mark in 2009 though it might not quite eclipse it.
The top four US carriers are now a permanent fixture in the top 10 global operators by mobile data service revenues occupying #3, #4, #6, and #8 spot respectively. Apart from NTT DoCoMo and China Mobile, Verizon Wireless and AT&T are the only two other operators generating more than $3B in quarterly mobile data service revenues.

ARPU (Slides 13-15)

Overall ARPU decreased by $0.14. Average voice ARPU declined by $0.57 while the average data ARPU grew by $0.43 or 3%.
Verizon led in (blended) data ARPU with $15.59 followed by AT&T and Sprint. In terms of % contribution, Verizon exceeded 30% to become the first US operator to do so. It was followed closely by AT&T and Sprint respectively. T-Mobile also exceeded $10 in data ARPU for the first time.
AT&T experienced something unique - an increase in voice ARPU (for the first time in 10 quarters). The voice ARPU increased $.03 in Q3 2009.

Subscribers (Slides 16-18)

In Q309, the US market added approximately 2.7M new subscriptions down 1% from Q109.
The number of data subscribers has been on the rise with Verizon leading the way. At the end of Q309, 67% of US subscribers were using some form of data services.
The messaging volumes in the US market now average almost 568 messages/subscriber/month or at the frequency of almost a message/hour/sub thus reaching close to the messaging leader Philippines.
In terms of net-adds, thanks to the boost from the iPhone, ATT again led in Q309 with 2M net-adds, edging its friendly rival Verizon which added 1.2M net subscriptions. Sprint lost 565K.
T-Mobile lost customers for the first time in its history. It lost 77K customers in the quarter.
The 3G penetration in the US stays at a healthy 43% in Q309. Verizon led the pack while T-Mobile is slowly expanding its 3G coverage. The growth in 3G and smartphones is helping offset some of the downward pressure on the data revenues and overall ARPU.
The gap between the top two (AT&T and Verizon) and the next two (Sprint and T-Mobile) is at its maximum. By the end of 2009, this gap will rise to 36% compared to 28% at the end of 2008 and 21% in 2002.The "Rest" category has essentially diminished from the market dropping from a dominant 43% market share in 2002 to 12% in 2009.

Applications and Services

Non-messaging services continue to grab 50-65% of the data revenues for the US carriers.
The flat-rate pricing movement that was started by Willcom in Japan which moved to Europe became more prevalent in the US market with industry wide flat-rate pricing plans that included data. All the major carriers seem to be offering flat-fee access plans for most of the new smartphones being introduced in the market. Approximately 20% of the consumers have flat-rate data plans.
There are probably 18-20 sub-segments within mobile data services and consolidation looms. While the valuations are still high for rapid consolidation, we think that due to recession pressure, the M&A scene is starting to heat up.
The usage and data consumption trends are enabling carriers to accelerate their 4G plans and develop long-term business and technical strategies.

Handsets

Nokia sold 100M+ units in Q3 2009. Samsung again had a solid quarter with over 60M devices sold inching its market share to almost 21%. LG Electronics at 11%, Sony Ericsson at 4.9%, and Motorola at 4.7% rounded up the top 5.
The third quarter was again dominated by blockbuster launches of smartphones. Androids have been invading the industry en-masse and 2010 looks to be a terrific year for consumers and competition.
The growth in smartphone usage is also putting pressure on the networks which are not able to handle the load during peak times in certain cities thus forcing carriers to look for alternate strategies to satisfy the demand for broadband - usage billing, UMA, Femtocells, Hotspots, WiMAX, LTE, and others.

Policy and Regulations

· Q3 also marked the start of an intense FCC scrutiny of the wireless industry. In outlining the four key principles of a) looming crisis of spectrum shortage b) removal of red tape c) enforce net-neutrality and d) open Internet, things have already started to change in the US Wireless Industry. Google has played the game of Armadaian tactics with Kasparovian acumen. The impact of the codified principles (and the subsequent court battles) can have a significant impact on not only the US wireless industry but the global ecosystem as well.

Open

The appstores battle is intensifying with OEMs and carriers are announcing their plans and some of them are opening their wares to woo the developer community. In the midst of the appstores hoopla, Apple announced the passing of the 2 Billion download mark with increasing number of developers participating the ecosystem. The new functionality being released with 3.0 is taking the battle up a notch. The clear-cut business model of 30/70+ split is attractive to the long-tail of developers. While there is no dearth of applications, findability remains a challenge. Also, appstores are changing the monetization strategies for content and application developers.
The App vs. Mobile Web debate is getting intense. The evolution is pretty clear - for the applications that don’t require significant UI resources, it will be better to develop in for the browser, for intensive games, the native platform will be ahead of the browser advances. The location API access on the iPhone browser is breakthrough to have developers start thinking about the webapps. But, what does it do to the control points and the revenue models?

· While there has been much consternation around the word "Open," one is hard pressed to find a consistent definition what it might actually mean. One could provide access to one API and declare themselves an open heretic while others could end up opening up their business more than needed and yet be accused of being closed. Clearly, the degree to openness is in the eye of the recipient. There is no black and white, just shades of grey and that’s where the battles will be won and lost. In the end, it is all about "access" to the market and the "freedom" to earn profits. Rest is noise.

· It is worth debating as to what can be mandated to be open, do the rules apply just to the operators and OEMs, or we should extend the courtesy to software platforms, search indices, aggregated user profiles, billing engines, etc.

· It is also becoming obvious that we need to redefine the device categories. Featurephones are no longer dumb terminals, many empower the users with smartphone functionality. Devices like iPhone, Droid, Pre no longer fit the smartphone stereotype, they need a separate category for themselves - appphones, ddhmvcs (data devices that happen to make voice calls), platformdevices, mobilecomputers, geniusdevices, agilechips, astuteconceirge, you get the point.

Misc.

Not surprisingly, Venture capital market experienced a continued decline in 2009, with companies announcing $1.5B in financings vs. $3B for the same time period. (Source: Rutberg)
In a sign of convergence battles to come, T-Mobile’s @Home and various Femto cell initiatives are taking hold. Cable operators are also aggressively seeking triple-play by providing the wireless component of the service.
China crossed the 700M subscription mark in Q3. India crossed the 500M mark for telephone penetration (wireline + wireless) of which 472 are mobile subscriptions. In terms of net-adds, India has outpaced China for the last 16 months. The Indian market added almost 155M vs. 101M in China during the last four quarters. (more discussion on the international market in our global market update next year)

We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, and articles. The next US Wireless Data Market update will be released in Feb 2009. The next Global Wireless Data Market update will be issued in Mar 2010.

Watch out for our end of the year survey and commentary on global wireless markets and trends for 2010.

Your feedback is always welcome.

Should you have any questions about navigating or understanding the economic and competitive icebergs, please feel free to drop us a line.

Thanks.

Chetan Sharma

Disclaimer: Some of the companies mentioned in this note are our clients.

US Wireless Data Market Update - Q2 2009 August 8, 2009

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carriers, Enterprise Mobility, European Wireless Market, Indian Wireless Market, Japan Wireless Market, Location Based Services, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile Usability, Patent Strategies, Patent Strategy, Smart Phones, Speaking Engagements, Strategy, US Wireless Market, Unified Messaging, Usability, WiMax, Wireless Value Chain, Worldwide Wireless Market , 4 comments

US Wireless Data Market Update - Q2 2009

Download: PPT | PDF

Executive Summary

The US wireless data market grew 7% Q/Q and 30% Y/Y to exceed $10.6B in mobile data service revenues and thus exceeded $10B for the second straight quarter. As we mentioned in our Q1 2009 research note, given the strong growth in data revenues shown by the top carriers and the increase in service revenues overall, the worst is over for the US mobile industry. In summary, the recession has been all but a tiny blip in its growth trend and the US mobile market has weathered the downward spiral in economy better than its counterparts in other developed nations. Of course, recession doesn’t treat all players equally, so, some have had a negative impact and will need more resources and effective strategies to claw back to the their previous market position.

The US subscription penetration was approximately 90.4% at the end of Q209. The current rate of net-adds (subscription) is approximately 3 every second (compared to a net gain in population of one person every 10 seconds). While the flailing economy hit certain segments of the wireless ecosystem hard esp. the infrastructure and handset segments, consumers haven’t really pulled back on the mobile data overall spending. Additionally, the CAPEX spending will stay strong in 2009 given the activity around 3G/4G deployments and trials. As expected, there was an increase of prepaid subscribers which dropped the overall revenues for some of the carriers.

As we mentioned in our last two research notes that this time around, the fate of the US mobile industry is more closely tied to the overall economy compared to the previous recessions. As the consumer sentiment improved over the last 3-4 months along with better than expected Q1-2 2009 earnings from corporations, the mobile industry is back on track. While the structural flaws in various industry segments remain, and the economy is a crisis away from the double dip, the outlook for the remainder of 2009 remains bright and we are expecting the overall data revenues to now increase by 32% compared to 2008 with a record-setting Q4.

US Wireless Industry in Recession - The light at the end of the tunnel is indeed not from the oncoming train

Note: For a detailed discussion of the US wireless industry in recessions, please see 2008 US Wireless Market Update.

Q2 2009 reported a much better 1% decline (compared to 6.4% in Q1). On an yearly basis, the GDP is expected to change by 3.2% for 2009 and the service revenues are expected to account for 1.13% of the US economy by year-end.

As mentioned in the previous reports, while in the past, the recession hardly impacted the wireless industry, this time around; it is going to be more tied to the recession. In the past couple of months, the consumer sentiment has improved and the Q109 earnings have been better than expected. While there are still many structural flaws in the financial and housing industries and the unemployment is at a 25 year high of 9.4% (though it dropped in July from 9.5% in June), consumers are feeling better about the economy and their own prospects in it.

Given that consumer sentiment is improving, it is clear that the US mobile data market is all but back from the recession. While some segments within the mobile industry might be suffering, there has been an increase in spending overall.

What to expect in the coming months?

We noted in our Q3 2008 note that we will get a better picture of the impact of the recession on the wireless industry in Q109 as it was the first full quarter after the seasonal holiday quarter. There are two micro trends that are clear. First, as expected, due to the high unemployment, the data card segment took a hit. It is starting to recover in due course as more of the workforce comes back over in the next 18 months.

Also, as expected, there was a shift from postpaid to prepaid in some user segments. For example, for T-Mobile, prepaid constituted 82% of the net-adds in Q209 up from 61% in Q109 and 21% in Q208. It is not clear if the good times will bring back the prepaid subscribers to the postpaid realm or like the consumers who are canceling their landline connections and moving to mobile, these customers will get used to savings and the prepaid lifestyle. The fight for the low-end customer is also having an impact on the traditional prepaid players and the price pressure is reducing their margins.

The landline replacement by Mobile trend continued now reaching almost 24% by Q209. Messaging continues to grow. The messaging volume was up 15% and messaging revenue was up 11% QoQ. The data access (excluding data card) including flat rate data plan subscriptions have also show significant strength lately. In addition to smartphones, we are also seeing increased mobile data activity amongst feature phone users. With its expanding 3G network, T-Mobile like its peers has started to benefit from smartphone penetration reaching to 6% of its subscriber base. Overall, the US market will exceed 25% penetration of smartphones in Q3 2009.

The increased use of smartphones and datacards is putting a pressure on carrier networks and accelerating their strategies to deploy LTE/WiMAX. We estimate that by end of 2009, the US mobile data traffic is likely to exceed 400 petabytes, up 193% from 2008. To truly tackle the problem head-on, operators will need to adopt a multi-pronged strategy to manage their traffic more effectively. We discuss mobile data traffic in much more detail in our paper “Managing Growth and Profits in the Yottabyte Era.” (I will be giving keynotes on the subject at the Mobile Innovation Week in Sept and at the ISACA meeting in Oct)

The positive factors are helping negate the negative factors and given the strength of 3G and smartphone adoption, the increase in activity on the appstores front, and in general, a better awareness of mobile data services and applications amongst consumers, any decline due to the loss of data card revenue and postpaid transition to prepaid accounts has been taken care off. In particular, Verizon and AT&T have done really well. Smartphones remain a bright spot, which in turn has a direct positive impact on the data revenues. Even with the decline in handset sales, smartphone segment will continue to increase in 2009 accounting for almost 30% of the overall device shipments.

There is also a concerted effort underway to move beyond the traditional subscriptions and expand the mobile universe to wireless-enable other consumer devices (What did your refrigerator say to your microwave while you were gone?).

Coming back to the 2009 forecasts, we are raising our estimates for the mobile data service revenues to $45B for the year. We will be keeping a very close eye on the micro- and macro-trends and reporting on the market on a regular basis in various private and public settings.

Against this backdrop, the analysis of the Q209 US wireless data market is:

Service Revenues (Slides 11-12, 17-18)

The US Wireless data service revenues grew 7% Q/Q to $10.6B in Q209. Compared to Q208, the data service revenues grew 30%.
Verizon and AT&T accounted for 90% of the increase in data revenues in Q2 2009.
The US mobile data service revenues crossed $10B for the second straight quarter and stays ahead of Japan and China by a distance.
Verizon and AT&T experienced the most growth with over 8% increase Q/Q followed by T-Mobile at 6%.
Verizon’s data revenues are now almost $4B/quarter only inches behind the global leader of over 10 years NTT DoCoMo.
AT&T and Verizon now account for 69% of the market data services revenues and 61% of the subscriber base. Sprint had the fifth consecutive quarter of data revenue growth.
The average industry percentage contribution of data to overall ARPU is now $27%. US market is likely to touch the 30% mark in 2009.
The top four US carriers are now a permanent fixture in the top 10 global operators by mobile data service revenues occupying #3, #4, #6, and #8 spot respectively. Apart from NTT DoCoMo and China Mobile, Verizon Wireless and AT&T are the only two other operators generating more than $3B in quarterly mobile data service revenues.

ARPU (Slides 13-15)

Overall ARPU decreased by $0.23 thus reversing the trend of the last three quarters. Average voice ARPU declined 13-15by $0.45 while average data ARPU grew by $0.68 or 5% and easily negated the drop in voice ARPU.
Sprint led in data ARPU with $15.5 followed by Verizon at $14.96. In terms of % contribution, Verizon led with 29.28% followed by AT&T at 28.74%.

Subscribers (Slides 16-17)

In Q209, the US market added approximately 2.8 M new subscriptions down 6% from Q109.
The number of data subscribers has been on the rise with Verizon leading the way. At the end of Q209, 65% of US subscribers were using some form of data services.
The messaging volumes in the US market now average almost 540 messages/subscriber/month or at the frequency of almost at a message/hour/sub thus reaching close to the messaging leader Philippines.
In terms of net-adds, thanks to the boost from the iPhone, ATT led in Q209 with 1.4M net-adds, edging its friendly rival Verizon which added 1.1M net subscriptions. T-Mobile net-adds reduced to 325K while Sprint lost 214K.
The 3G penetration in the US stays at a healthy 40%+ in Q209. Verizon led the pack while T-Mobile is slowly expanding its 3G coverage. The growth in 3G and smartphones is helping offset some of the downward pressure on the data revenues and overall ARPU. (I will be moderating a panel “Ultraband: A Fast Platform For Innovation” at GigaOM’s Mobilize in Sept. We will discuss the future of broadband and its implications)

Applications and Services

Non-messaging services continue to grab 50-65% of the data revenues for the US carriers.
The flat-rate pricing movement that was started by Willcom in Japan which moved to Europe became more prevalent in the US market with industry wide flat-rate pricing plans that included data. All the major carriers seem to be offering flat-fee access plans for most of the new smartphones being introduced in the market. Approximately 18% of the consumers have flat-rate data plans.
There are probably 18-20 sub-segments within mobile data services and consolidation looms. While the valuations are still high for rapid consolidation, we think that due to recession pressure, the M&A scene is starting to heat up.
The usage and data consumption trends are enabling carriers to accelerate their 4G plans and develop long-term business and technical strategies (We will be discussing the state of the industry and what lies ahead at the inaugural “Mobile Breakfast Series” on Sept 22nd in the panel discussion “State of the Union: Where do we go from here”)
The appstores battle is intensifying with OEMs and carriers are announcing their plans and some of them are opening their wares to woo the developer community. In the midst of the appstores hoopla, Apple announced the passing of the 1.5 Billion download mark with increasing number of developers participating the ecosystem. The new functionality being released with 3.0 is taking the battle up a notch. The clear-cut business model of 30/70+ split is attractive to the long-tail of developers. While there is no dearth of applications, findability remains a challenge. Also, appstores are changing the monetization strategies for content and application developers and the industry is trying to figure out what “Open” means in the long-term. (Will be discussing this and more at CTIA in Oct)
The App vs. Mobile Web discussion reached a surprisingly new crescendo. The evolution is pretty clear - for the applications that don’t require significant UI resources, it will be better to develop in for the browser, for intensive games, the native platform will be ahead of the browser advances. The location API access on the iPhone browser is breakthrough to have developers start thinking about the webapps. But, what does it do to the revenue model? (I will be moderating two panels on the subject in Nov at the Open Mobile Summit)

Handsets

After falling below the 100M/quarter level in Q1, Nokia rebounded to sell 103M units in Q2 09. Samsung also exceed 50M with a strong second finish at 52M. LG finished a strong third with almost 30M in its bag and Motorola showed signs of strength by selling close to 15M units.
The second quarter was dominated by two blockbuster launches of iPhone 3GS and Palm Pre. While iPhone continued to attract new customers, Pre suffered from a less than stellar launch strategy. By lowering the 3G device price to $99, Apple set the new bar in smartphone pricing leaving the rivals scrambling for response. T-Mobile launched another Android device last month.
The growth in smartphone usage is also putting pressure on the networks which are not able to handle the load during peak times in certain cities thus forcing carriers to look for alternate strategies to satisfy the demand for broadband - usage billing, UMA, Femtocells, Hotspot buys, WiMAX, LTE, and others.
Rest of 2009 is eagerly awaiting the release of Palm Pre, several Android handsets from HTC, Samsung, Motorola, and others, Windows devices along with follow on of Danger devices, new model(s) of iPhone, and other touch screen devices.

Misc.

Not surprisingly, Venture capital market experienced a continued decline in thefirst half of 2009, with companies announcing $1.2B in financings vs. $1.6B for 2H08 and $2.1B for 1H08. (Source: Rutberg)
In a sign of convergence battles to come, T-Mobile’s @Home and various Femto cell initiatives are taking hold. Cable operators are also aggressively seeking triple-play by providing the wireless component of the service.
China crossed the 700M subscription mark last month. In terms of net-adds, India has outpaced China for every single month of the last one year. The Indian market added almost 140M vs. 100M in China during the last four quarters. (more discussion on the international market in our global market update next month)

We will be keeping a close eye on the trends in the wireless data sector in our blog, twitter feeds, future research reports, and articles. The next US Wireless Data Market update will be released in Oct 2009. The next Global Wireless Data Market update will be issued in Sept 2009.

Your feedback is always welcome.

Should you have any questions about navigating or understanding the economic and competitive icebergs, please feel free to drop us a line.

Thanks.

Chetan Sharma

Disclaimer: Some of the companies mentioned in this note are our clients.

New WhitePaper: Managing Growth and Profits in the Yottabyte Era July 14, 2009

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, Enterprise Mobility, European Wireless Market, Indian Wireless Market, Japan Wireless Market, Location Based Services, MVNO, Mergers and Acquisitions, Mobile Advertising, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Search, Mobile TV, Mobile Usability, Mobile Users, Networks, Smart Phones, Speaking Engagements, Strategy, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 2 comments

Managing Growth and Profits in the Yottabyte Era

Executive Summary

In Q1 2009, the US market exceeded $10B in quarterly mobile data service revenues for the first time. The subscription penetration in the US is well past 90% and the mobile data usage is on the rise. While the rate of new subscriptions has slowed, the pace of innovation is going very strong. It is quite apparent that the mobile industry is going through a significant transition from voice to data, from making calls to getting lost in applications and from voice communications to multimedia communications. Helped by the ever expanding wireless broadband networks, and release of hit devices every quarter, and consumer’s insatiable appetite for information and content has brought us to the surge of a data tsunami that will shake the industry to its core.

As everything moves to digital, information repositories across the web are almost doubling every day moving rapidly to the yottabyte (YB) era. The information and the desire and the capability to consume oodles of data is increasing exponentially. As a result the traffic – both Wireline and wireless is also increasing at a predictably fast rate.

In 2009, the global yearly mobile data traffic will reach a new milestone – 1 Exabyte(EB) or 1 Million Terabytes (TB).By 2016-17, the global yearly mobile data traffic is likely to exceed 1 Zettabyte (ZB) or 1000 Exabytes. By 2014, in the US alone, the total yearly mobile data traffic is likely to exceed 40 EB. How do you go about managing such growth in a profitable manner when the cost of supporting such traffic will increase exponentially despite the move to 4G? Will the move to LTE offer some respite?

This paper discusses the analysis done by Chetan Sharma Consulting on the growth of mobile data traffic in the US market and how the ecosystem can apply some strategies to manage growth and profits. We built detailed models to estimate the rise of mobile data network traffic and discuss some solutions to handle such growth in this paper.

Download Paper

Your feedback is always welcome.

Should you have any questions about navigating or understanding the economic and competitive icebergs, please feel free to drop us a line.

Thanks.

Chetan Sharma

Disclaimer: Some of the companies mentioned in this paper are our clients.

TiECON Conference Roundup May 31, 2009

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, Enterprise Mobility, European Wireless Market, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Speaking Engagements, US Wireless Market, WiMax, Wireless Value Chain, Worldwide Wireless Market , add a comment

While I have been involved in various TiE events over the years, this was my first TiECOn down in the bay area. Even in this economy, this was a very well attended event with folks coming in from around the globe. The conference was quite diverse as well covering consumer web, internet infrastructure, cleantech, wireless, and software. I was there to moderate a panel on Wireless Monetization.

I was able to attend some really good keynotes, the most notable being Paul Maritz who talked about platforms, Tony Hsieh of Zappos on happiness, and Reid Hoffman, Linkedin. I found Martiz address on platforms and how the successful ones are generally created particularly interesting. He had some inside stories to share about Intel and Microsoft and how “accidental fortitude” seems to be the key of what became the changing platforms for our industry. Planning often doesn’t work that well when create mass-market phenomenon. The next areas of innovation and profits are: microfinance, biotech and information personalization.

What was unique and distinct about this conference was the “level of energy” amongst the entrepreneurs and participants. Despite the funding and economic climate, these guys were rushing to form the new company, start a new chapter, and create something unique in the market place. Some were serial entrepreneurs while others were just getting started.

The central theme of the conference was - if you were going to start a new business, this is the year, now is the time. While it has become a cliche, it is indeed true, best businesses are started in recessions and in the downturn - sometimes out of need other times out of opportunities. Bright brains rally and congregate to shake the cobwebs and look towards a new beginning. The energy was indeed infectious. My own consulting practice started during the last recession and 8 years later we are still around, so i say, all power and glory to the next generation of entrepreneurs who will create new technologies, paradigm shifts, and business models.

50 Startups were awarded the TiE50 awards - http://www.tiecon.org/home/tie

058

On to my panel - “Wireless Monetization - The Pot of Gold at the End of the Rainbow.”

My thanks to Arvind Gupta, Asha Vellaikal, and Savinay Berry for being the hosts and putting together the panel. Also, thanks to Ramneek Bhasin and Ujjal Kohli for their assistance.

The panelists were:

Michael Bayle, former Sr. Director, Mobile Monetization, Yahoo

Purnima Kochikar, Director, Nokia

Gary Kovacs, SVP, Sybase

Matt Litz, VP, Glu Mobile, and

Tina Unterlaendar, MD, AKQA

My questions were simply around what makes money, what’s working, and what’s coming? The brilliant panel had terrific insights.

Bottom line:

Appstores are a way to experiment with pricing, gives users more control
Different appstores might require different strategy for promotion, pricing needs to remain consistent across appstores, rev-shares with operators need to remain consistent
Mobile Advertising is in its infancy, budgets mostly in experimental campaigns but the potential remains huge. The biggest problem is reach and fragmentation
In the flat world, one must think of how the solutions will be adopted around the world not just in the developed nations
India and China are the volumes business, get used to it
Consumers are always looking for free so there is continuous price pressure, one has to consider alternate pricing or monetization strategies
Companies like mig33 have been successful in alternate modes of monetization, advertising is a smaller piece of the puzzle
Days of using mobile to purchase physical goods is coming
Mobile Payments using NFC is still a far cry for the US market

Overall a great panel and a great conference.

US Wireless Data Market Update - Q1 2009 May 11, 2009

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carriers, Devices, Enterprise Mobility, European Wireless Market, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, Mobile Users, Networks, Speaking Engagements, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 4 comments

US Wireless Data Market Update - Q1 2009

Download PPT (2.8MB)

Download PDF (1.8MB)

http://www.chetansharma.com/usmarketupdateq109.htm

Executive Summary

The US wireless data market grew 5% Q/Q and 32% from Q108 to reach $10B in mobile data service revenues. It marked the first time the US market has crossed the $10B milestone. Given the strong growth in data revenues shown by the top carriers and the increase in service revenues overall, it appears that at least for the time being that the worst is over for the mobile industry. In summary, the recession has been all but a tiny blip (from the service revenue perspective) in its growth trend and the US mobile market has weathered the downward spiral in economy better than its counterparts in other developing nations.

The US subscription penetration went passed 90%. While the flailing economy hit certain segments of the wireless ecosystem hard esp. the infrastructure and handset segments, consumers haven’t really pulled back on the mobile data overall spending. Additionally, the CAPEX spending will stay strong in 2009 given the activity around 3G/4G deployments and trials. As expected, the data card subscriptions were hit the hardest and there was an increase of prepaid subscribers which dropped the overall revenues for some of the carriers.

As we mentioned in our last research note that this time around, the fate of the US mobile industry is more closely tied to the overall economy compared to the previous recessions. As the consumer sentiment improved over the last couple of months along with better than expected Q1 2009 earnings from corporations, the mobile industry seems to be back on track. While the structural flaws in various industry segments remain, and the economy is a crisis away from the double dip, the outlook for the remainder of 2009 remains bright and we are expecting the overall data revenues to now increase by 24% compared to 2008.

US Wireless Industry in Recession - The light at the end of the tunnel might not be of the oncoming train

Note: For a detailed discussion of the US wireless industry in recessions, please see 2008 US Wireless Market Update.

The % GDP change dropped from 4.8% in 2007 to 2.3% in 2008. Q4 2008 reported a drop by 6.2% QoQ in one of the sharpest declines in the last quarter century. Q1 2009 reported a 6.1% decline. On an yearly basis, the GDP is expected to change by 3.2% for 2009 and the service revenues are expected to account for 1.13% of the US economy by year-end.

As mentioned in the previous report, while in the past, the recession hardly impacted the wireless industry, this time around; it is going to be more tied to the recession. In the past couple of months, the consumer sentiment has improved and the Q109 earnings have been better than expected. While there are still many structural flaws in the financial and housing industries and the unemployment is at a 25 year high of 8.9%, consumers are feeling better about the economy and their own prospects in it. Most companies are being optimistic but cautious.

Given that consumer sentiment is improving, it appears that US mobile data market is all but back from the recession. While some segments within the mobile industry might be suffering, there has been an increase in spending overall.

What to expect in the coming months?

We noted in our Q3 2008 note that we will get a better picture of the impact of the recession on the wireless industry in Q109 as it was the first full quarter after the seasonal holiday quarter. There are two micro trends that are clear. First, as expected, due to the high unemployment, the data card segment took a hit. It will recover in due course as more of the workforce comes back over in the next 18 months.

Also, as expected, there was a shift from postpaid to prepaid in some user segments. For example, for T-Mobile, prepaid constituted 61% of the net-adds in Q109 up from 57% in Q408 and 25% in Q108. It is not clear if the good times will bring back the prepaid subscribers to the postpaid realm or like the consumers who are canceling their landline connections and moving to mobile, these customers will get used to savings and the prepaid lifestyle.

It is quite likely that 50-60% of such consumers don’t go back to postpaid thus permanently lowering the ARPU base for such customers and carriers who have experienced more postpaid to prepaid shift will have to make up for the lost revenues someplace else (or maybe they can hire Oprah to send a tweet to her followers to upgrade to Postpaid. It will crash the system but increase the ARPU).

Rising unemployment continues to accelerate another trend - landline replacement by Mobile which reached almost 22% by Q109 (of course this benefits the mobile industry). This trend is irreversible and requires fresh thinking.

Messaging continues to grow. The messaging volume jumped 27% and messaging revenue was up 7% QoQ. The data access (excluding data card) including flat rate data plan subscriptions have also show significant strength lately. In addition to smartphones, we are also seeing increased mobile data activity amongst feature phone users.

This will lead to new business and pricing models for e.g. some will find the low flat rate pricing untenable in the long-run without a fundamental rethink of the network and business architecture.

Coming back to the 2009 forecasts, we are raising our estimates for the mobile data service revenues to $42B for the year. We will be keeping a very close eye on the micro- and macro-trends and reporting on the market on a regular basis in various private and public settings.

Against this backdrop, the analysis of the Q109 US wireless data market is:

Service Revenues (Slides 11, 18)

The US Wireless data service revenues grew 5% Q/Q to $10B in Q109. Compared to Q108, the data service revenues grew 32%.
It marked the first time the US mobile data service revenues crossed $10B. It is also the first time any country has reported a $10B quarter (for mobile data services).
Thanks to the Alltel acquisition, Verizon’s data revenues grew the most - 18% QoQ and 46% YoY. AT&T experienced a 39% lift while T-Mobile reported a 24% increase in YoY data revenue growth.
Last quarter AT&T surpassed Verizon in data revenues for the first time since 2005 and in Q109 Verizon duly took many of titles back from AT&T becoming the number 1 carrier in almost all the categories.
AT&T and Verizon now account for 68% of the market data services revenues. Sprint had a fourth consecutive quarter of data revenue growth.
The average industry percentage contribution of data to overall ARPU is now $26%. US market is likely to exceed the 30% mark in 2009.
The top four US carriers are now a permanent fixture in the top 10 global operators by mobile data service revenues occupying #3, #4, #6, and #8 spot respectively. Apart from NTT DoCoMo and China Mobile, Verizon Wireless and AT&T are the only two other operators generating more than $3B in quarterly mobile data service revenues.

ARPU (Slides 12-15)

Overall ARPU decreased by $0.91. Average voice ARPU declined by $1.17 while average data ARPU grew by $0.26 or 2% and couldn’t negate the drop in voice ARPU.
Sprint led in data ARPU with $15 followed by Verizon at $14.16. In terms of % contribution, Verizon led with 27.91% followed by AT&T at 27.2%.

Subscribers (Slides 16-17)

In Q109, the US market added almost 3M new subscriptions down 33% from Q108.
The number of data subscribers has been on the rise with Verizon leading the way. At the end of Q109, 62% of US subscribers were using some form of data services.
The messaging volumes in the US market now average 485 messages/subscriber/month or at the frequency of a message/sub every 1.5 hours. The leading messaging nation is Philippines where consumers routinely send a message/hr on average.
In terms of net-adds, Verizon led in Q109 with 1.3M net-adds, edging its friendly rival AT&T which added 1.2M net subscriptions. Sprint losses reduced to 180K subscribers.
With its Alltel acquisition, Verizon became the number one carrier in the US easily overtaking AT&T. It now has 86.6M subs and secured the bragging rights to being the biggest operator in the Americas.
The 3G penetration in the US went past 40% in Q109. Verizon led the pack while T-Mobile is slowly expanding its 3G coverage. The growth in 3G and smartphones is helping offset some of the downward pressure on the data revenues and overall ARPU.

Applications and Services

Non-messaging services continue to grab 50-60% of the data revenues for the US carriers. For the first time the non-messaging share exceeded 60%.
The flat-rate pricing movement that was started by Willcom in Japan which moved to Europe became more prevalent in the US market with industry wide flat-rate pricing plans that included data. All the major carriers seem to be offering flat-fee access plans for most of the new smartphones being introduced in the market. Approximately 17% of the consumers have flat-rate data plans. We will see a further acceleration of this trend aided by the recession.
There are probably 18-20 sub-segments within mobile data services and consolidation looms. While the valuations are still high for rapid consolidation, we think that due to recession pressure, the M&A scene is starting to heat up.
The usage and data consumption trends are enabling carriers to accelerate their 4G plans and develop long-term business and technical strategies (I will be moderating a panel on “The future of Broadband” at the “Future in Review (FiRE)” conference on May 20th in San Diego where some of the best minds on broadband will be debating the evolution of our industry)
The appstores battle is intensifying with OEMs and carriers are announcing their plans and some of them are opening their wares to woo the developer community. In the midst of the appstores hoopla, Apple announced the passing of the 1 Billion download mark with increasing number of developers participating the ecosystem. The new functionality being released with 3.0 is going to take the battle up a notch. The clear-cut business model of 30/70+ split is attractive to the long-tail of developers. While there is no dearth of applications, findability remains a challenge. Also, appstores are changing the monetization strategies for content and application developers (I will be moderating the panel “Wireless Monetization” at TiECON on May 16th in Santa Clara)
Slowly but surely, mobility is becoming pervasive across industry verticals. Mobile Health looks very promising and the impact could be global. (I will be participating in a conference on mHealth being held in San Francisco on May 22nd by UN Foundation, Vodafone Foundation, UCSF Global Health Services, Berkley Engineering, Cisco, and NetHope)

Handsets

After selling over 100M units for seven straight quarters, Nokia slipped to 93M handsets in Q109, still more than the next three players combined but an 18% drop from Q408 nevertheless. Samsung and LG have been really gaining on their rivals in the past year and are now at #2 and #3 respectively. Motorola and Sony Ericsson with 6% share each round up the top five.
While Apple has been stealing all the press, RIM upped the ante by claiming leadership in the smartphone wars by outselling Apple in the first quarter of the year.
The growth in smartphone usage is also putting pressure on the networks which are not able to handle the load during peak times in certain cities thus forcing carriers to look for alternate strategies to satisfy the demand for broadband - metered billing, UMA, Femtocells, Hotspot buys, WiMAX, LTE, and others.
Rest of 2009 is eagerly awaiting the release of Palm Pre, several Android handsets from HTC, Samsung, Motorola, and others, Windows devices along with follow on of Danger devices, new model(s) of iPhone, and other touch screen devices.

Misc.

Not surprisingly, Venture money in the mobile sector experienced a rapid decline. Compared to Q108, venture financing declined by 58%. (Source: Rutberg)
In a sign of convergence battles to come, T-Mobile’s @Home and various Femto cell initiatives are taking hold. Cable operators are also aggressively seeking triple-play by providing the wireless component of the service.

We will be keeping a close eye on the trends in the wireless data sector in our blog, future research reports, and articles. The next US Wireless Data Market update will be released in Aug 2009. The next Global Wireless Data Market update will be issued in Sept 2009.

Your feedback is always welcome.

Should you have any questions about navigating or understanding the economic and competitive icebergs, please feel free to drop us a line.

Thanks.

Chetan Sharma

Disclaimer: Some of the companies mentioned in this note are our clients.

Global Wireless Data Market Update - 2008 April 28, 2009

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, European Wireless Market, India, Indian Wireless Market, International Trade, Japan Wireless Market, Location Based Services, M&A, MVNO, Microsoft Mobile, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, Mobile Users, Mobile Wallet, Music Player, Networks, Strategy, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far

Global Wireless Data Market Update - 2008

Download PPT (1.9MB)

Download PDF (3.1MB)

http://www.chetansharma.com/globalmarketupdate2008.htm

Executive Summary

The Global Wireless Markets continued to grow rapidly especially in India and China where the carriers (together) are adding over 20M new subscriptions every month. India crossed the 400M subscription mark this month while China whizzed past 650M in Q109. Overall, the global subscriptions penetration edged past 60%. During 2008, revenues further tilted towards data services, increasing 17% from 2007 EOY. The overall global mobile revenues (including equipment) for the year reached the 1 Trillion dollar landmark in 2008, with over $830 billion attributed to services revenues. Data revenues now account for over 20% of the global service revenues.

For some leading operators, data is now contributing close to 40% of the overall revenues. However increase in data ARPU is not completely offsetting the drop in voice ARPU for most operators. From the true and tested SMS messaging to the new services such as Mobile Advertising, Social Networking, Commerce, Mobile Wallet, and others, different services helped in adding billions to the revenues generated in 2008. The US market expanded its lead over Japan in mobile data service revenues for the year and is unlikely to cede ground in the months to come.

The success of Apple’s Appstore (1B downloads in 9M across 37M devices is not surprising but still impressive, look for another growth bump in July) led to appstore mania across the ecosystem with every major player in the ecosystem holding ambitions for Applesque success leading to healthy competition and hopefully more innovation. Google’s Android also kept the industry chatter on the high with a slew of new devices slated for 2009. The ease of use of applications developed for G1 on the new devices will define Android’s role in the ecosystem. If successful, it will decimate the weaker ones from the equation going forward.

WiMAX vs. LTE debate took over the EV-DO vs. WCDMA talk and while the majority of the industry is consolidating around LTE; open-platform advocates are watching the arrival of WiMAX with great interest. However, the down economy is delaying the establishment of Clearwire’s nationwide footprint.

Chetan Sharma Consulting conducted its semiannual study on the global mobile data industry. We studied wireless data trends in over 40 major countries - from developed and mature markets such as Japan, Korea, UK, and Italy to hyper growth markets such as China and India.

This note summarizes the findings from the research with added insights from our work in various global markets.

Service Revenues

US extended its lead over Japan as the most valuable mobile data market in service revenue with US adding $34B vs. $29B for Japan in 2008. China with $15.8B was ranked number 3. US registered the highest growth amongst the top 3 with over 40% increase from EOY 2007 levels followed by Japan at 25% and China at 21%.
The top 10 nations by service revenues are: US, China, Japan, UK, France, Italy, India, Germany, Spain, and Russia.
The top 10 nations by data service revenues are: US, Japan, China, UK, Italy, Germany, France, Spain, Australia, and Korea.
NTT DoCoMo continues to dominate the wireless data revenues rankings with over $4B in data services revenue in Q408 and almost $15B for the year. Almost 42% of its overall revenue now comes from data services. DoCoMo also crossed the 90% 3G mark last month.
NTT DoCoMo was followed by China Mobile, Verizon, AT&T, KDDI, Sprint Nextel, Softbank Mobile, T-Mobile USA, O2 UK, and China Unicom to round up the top 10 operators by wireless data service revenues. It marked the first year for T-Mobile USA to be in the top 10 list as it went past SK Telecom. All the top 10 carriers exceeded $2B in data revenues for the year 2008.
The top 10 global operator groups now account for over 60% of the global mobile data revenues.
For the last couple of years, NTT DoCoMo has been the only carrier exceeding $10B in yearly mobile data revenues. In 2008, as expected it found company with China Mobile, Verizon Wireless, and ATT in the exclusive $10B club. KDDI missed out by a whisker.
Data revenues for the top 10 operators increased 27% from EOY 2007 and now account for almost 48% of the global mobile data revenues though their subscriber share is around 30%.
The biggest jump in data revenues was experienced by the US carriers – ATT and Verizon Wireless respectively. They were followed by China Mobile. (For a complete US Market Update, please see our Q208 research note).
NTT DoCoMo regained its position vis-à-vis KDDI w.r.t. mobile data revenues. Their data coordinates stand at ($27, 42%) and ($25, 38%) respectively.
Most of the operators in developed nations are contemplating future strategies to boost data revenues such that the decline in voice revenues is at least compensated for. There are very few operators who have experienced increase in overall ARPUs. Comparing the ARPU for last 2 years, amongst the top operators, only Singtel, Rogers, T-Mobile UK, O2 Germany, O2 UK, Verizon Wireless and ATT experienced increase in both overall and data ARPU.
China reported approximately $16B in data revenues for 2008 and the percentage contribution is around 27%, data ARPU is around $2. For India, data ARPU continues to stay around $0.50 as most of the new adds are voice only subscribers and there is continued price pressure in the market.
China Mobile remains the most valuable telecom operator with over $180B in market cap. It is followed by Vodafone at around $98B. Telecom groups in mature markets are under enormous pressure to either come up with a global expansion strategy or accelerate their existing plans. The current recession has slashed their market caps by 20-30%.
In 2008, SMS’s vice like grip on data revenues continued to loosen a bit with many carriers seeing an increase in non-SMS data revenues. On an average, Japan and Korea have over 70-75% of their revenue coming from non-SMS data applications, US around 50-60%, and Western Europe around 20-40%.
NTT DoCoMo has been at the cutting edge of the mobile data evolution by creating new markets and exploring new technologies and social experiments ahead of almost anybody else in the market. We looked at the data revenue growth at NTT DoCoMo since the introduction of i-Mode almost 10 years ago. During the last 9 years, overall ARPU has declined 33% though data ARPU increased over 1800% and now accounts for almost 40% of DoCoMo’s service revenues. The voice ARPU has declined almost 60%. Our long history with the Japanese and Korean markets has taught us that while the individual strategies in each market will differ, one should study the trends and technologies in these markets to get a sense of what’s coming.

ARPU

Most of the major operators around the world have double digit percentage contribution to their overall ARPU from data services. Operators like DoCoMo, and Softbank are over 42%. KDDI, 3 Australia, 3 Italy, 3 UK, O2 UK, Singtel, and 3 Sweden exceeded 30%.
ATT reported the highest increase in data ARPU from 2007 with 32% growth. Other notable percentage increases in ARPU were from KDDI, DoCoMo, Softbank Japan, 3 Australia, Vodafone Italy, Rogers, Verizon Wireless, and T-Mobile Austria. The biggest drop in percentage terms were registered by the Indian operators with average data ARPU dropping to $0.50. In terms of absolute dollar amount, NTT DoCoMo leads the pack with $27 data ARPU.
The biggest percentage contribution by data ARPU has been consistently registered (since mid 2002) by two Philippines carriers – Smart Communications and Globe Telecom with over 56% (or $3) contribution coming from the data services. Philippines is also one of the most active messaging nations where users average a message/hr round the clock.

Subscriptions

The global mobile markets continue to grow at an explosive pace touching 4B subscriptions by 2008 up 23% from EOY 2007 levels and will likely cross the 5B mark in 2010. Overall the global mobile subscriptions now represent over 60% of human population on Earth.
China and India continued their red-hot growth throughout 2008. Combined, they added 212.8M new subscriptions with India edging China by 15% for the first time in yearly net-adds.
Earlier this month, India also crossed the 400M subscriptions mark, only the second nation to do it after China. In total, China is still years ahead. In the meantime, US crossed the 90% subscriptions mark earlier this year.
In March, India edged past the US to become the number two wireless market (by subscriptions) in the world. In the last two years alone it has added almost 175M new subscriptions (in comparison China added 169M and the US market added 39M). For the past 7 months, India has been displaying Phelpsesque like flair in setting and beating its world record for 6 times, twice exceeding 15M/month net-add. For the last 7 months, the market has been exceeding 10M net-adds/month with Mar 09 being at a whopping 15.6M making it a record for monthly net-adds in a given country at anytime in the history of the industry or any industry for that matter (breaking its previous record set in Jan09).
In the last 10 years, the growth patterns in the mobile industry have completely reversed. In 1998, the developed world accounted for 76% of the subscriber base, in 2008; the percentages have flipped with developing world now accounting for 76% of the subscriber base and are likely to increase to 85% by 2018.
The top 10 nations by subscriptions are: China, India, US, Russia, Brazil, Indonesia, Japan, Germany, Japan, and Pakistan.
China Mobile with 457M (as of Dec 08) remains the #1 carrier in terms of the total number of subscriptions followed by Vodafone at 255M and Telefonica with 196M subscriptions. América Móvil, Telenor, China Unicom, T-Mobile, Orange, MTS, and Bharti Airtel are the next five largest telecom groups in the world.
As far as 3G is concerned, there were over 400M 3G users (72% of them are WCDMA users vs. EV-DO). Both Japan and Korea continue to expand their 3G base with both reporting over 90%+ penetration.

Others

Messaging still accounts for the lion-share of data service revenues. However, other services such as Mobile Music, Mobile TV and video streaming, Voice navigation, PNDs, Mobile Games, IMS, LBS, Mobile advertising, and others have gradually chipped away the share from messaging. Alternate devices with wholesale cellular agreements are also flooding the market. In Japan, Mobile Commerce is expected to do much better than Mobile Advertising. 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.
Nokia eclipsed 100M/quarter unit sale in each of the four quarters. It has sold over 468M handsets in 2008 (up 7.2% from 2007), more than the next three handset manufacturers combined. Nokia’s global market share stayed in the 38-41% range. Samsung at 15%, Motorola with 9%, LG with 9.3% and Sony Ericsson with 8% rounded out the top five. Despite the slowdown, the industry eclipsed 1B in handset sales in 2008 and will do so again in 2009.
China and India represent the biggest opportunities for the Infrastructure providers. China launched 3G across the three operators earlier this year. India is also going through its 3G spectrum policy and is likely to resolve some of the contentious issues shortly. Some of the biggest infrastructure contracts are coming from these two countries as they look to expand coverage into rural areas.
Deployment of 3.5G technologies is in full swing. However, it is the discussion of 4G that is occupying the headlines. Many larger operators have laid out their plans for deploying LTE starting next year. Meanwhile, Clearwire has been rolling out its WiMAX network, one market at a time.
While the talk of “Open Access” and “Open Platform” consumed much of North America, it barely registered a decibel elsewhere. Several significant events including 700 MHz Auction, Android, and Verizon’s “Open Network” initiative elevated the consternation in the ecosystem. Apple launched its 3G iPhone and Android’s first device was introduced in the form of T-Mobile G1. Many more Android devices are slated to be released in 2009.

Your feedback is always welcome.

Thanks.

Chetan Sharma

Disclaimer: Some of the companies mentioned in this note are our clients.

Ps. We will have an update on the impact of recession on the mobile industry in our US Q109 update next month.

NAB recap - Open, Personalization, Advertising April 26, 2009

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, Devices, European Wireless Market, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Privacy, Speaking Engagements, Strategy, WiMax, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far

Last week, I was invited to present and moderate at the biggest Broadcaster’s show - the NABSHOW in Las Vegas. Compared to CTIA, the show was almost double with registered attendees exceeding 83K. For me, it was a day trip. I was involved with the Mobile Entertainment Summit being held on the 22nd.

The day started with the keynote from Matt Oomen, VP of Product and Technology development at Sprint Nextel. He laid the foundation for the day’s discussion with some overarching themes of Open Platforms, Open Devices, Social Networking, Personalization, and Broadband capabilities of the mobile industry. There were a number of great panels discussing the growth in the mobile video and applications space with panelists from all across the value chain. The bottom-line:

For mobile video to succeed, we need to reduce the number of global standards so that there is some standardization for OEMs and content providers instead of running around integrating new standards every year.
People didn’t think that was going to happen anytime soon
Apple’s Appstore has been a boon to some developers as they have refocused their monetizing strategies from advertising to subscription or charging for downloads which is good for the industry as it can diversify and experiment more. A company that has been successful at that is Glu Mobile
Zynga has an interesting model of social networking based games. The games are free but as you get more involved and want to raise the stakes, the price goes up, quite significantly with over $50 chips, etc. Idea is that a small population can fund a large base involvement for free
Texting has been quite successful with mobile marketing and advertising. Hipcricket and Singlepoint with support from Entravision and Fox argued (and rightly so) that to be successful, broadcasters should start developing their audiences and provider personalized services.

Next up were two of my panels. First one was on Mobile Trends being jointly presented with Brian Jurutka, VP Comscore. The session was moderated by Jay Frank, SVP, CMT. Brian presented some really interesting data on mobile video in the US market. A good number of video downloads are happening sideloaded and overall usage remains low.

Another interesting tidbit was for 3G vs. non-3G users

And while iPhone helped change the ecosystem, video usage looks quite similar to G1. Another interesting data point was that the video consumption tapers off with time for users meaning that content providers need to keep users engaged with different strategies.

I presented data on the overall US market and how that is evolving and ended up some observations and recommendations.

Next up was my panel discussion on how Mobile Innovations will impact Mobile Entertainment Experiences. I had the honor of moderating four very clued-in folks

Rebecca Hanson, VP, Strategic Initiatives, Sprint. She has been behind the WiMAX launch

Sajal Sahay, Director, Product Marketing, T-Mobile USA. He has been behind the Android G1 launch

Tim Chang, Principal, Norwest Venture Partners. He has been involved in the mobile industry for over 10 years as an investor and sits on several technology company boards and is very active in discussing emerging trends

and Raj Ray, Director, VAS, Qualcomm. He has been behind developing the VAS business for Qualcomm globally, esp. in the emerging economies

Salient points of our discussion:

Broadband provides great incentive for user to experiment with new apps and content
Appstore while increasing fragmentation will also increase competition and hence innovation
Openness drives innovation and carriers play an important role in driving that
For 3G, Usage growth is much higher than revenue growth so we need to figure out ways to bring them in alignment
Social networking needs to be embedded into everything
Role of alternate devices like kindle and cameo is increasing and we will see all sorts of vertically integrated devices. More and more consumer electronics devices will have cellular connection
Thanks to iPhone, interesting gaming models are emerging and gaming might provide guidance on how the ecosystem will develop
Data MVNOs anyone?
Emerging economies are bringing forth some interesting monetization and device technologies that will benefit everyone like high-end smartphones for less than $50
Advertising based monetization model is not everyone. One has to scale first
The biggest areas to invest: Personalization, Audience Measurement, QoS related, Payments, Android Games, Carrier agnostic user profile platforms, mobile cloud computing, augmented reality and much more

Overall a great show. I noticed that even Google had a booth (was absent at CTIA). Something to put on the calendar for next year. My thanks to Michael and Zahava for inviting me to participate.

My next events are at:

TiECON - May 16th - Mobile Monetization

Future in Review - May 20th - Future of Mobile Broadband

mHealth - May 22nd

Hope to see some of you there

CTIA 2009 Roundup April 6, 2009

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carriers, Devices, European Wireless Market, IP, Indian Wireless Market, International Trade, Japan Wireless Market, Location Based Services, Mergers and Acquisitions, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, Speaking Engagements, Strategy, US Wireless Market, Unified Messaging, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far

CTIA 2009 Roundup

http://www.chetansharma.com/ctia2009.htm

CTIA 2009 in Pictures

CTIA provided a boost to the Las Vegas economy by hosting the 2009 International CTIA in the sin city. Prior to the show, we knew that the attendance will be down due to the economy and it was clear from day 1 that it will be a less busy event. Attendance was probably down 30-40%, Exhibitors seemed down by a good percentage as well with many opting for meeting rooms instead or skipping the show altogether. The big double story compounds were downgraded to smaller fields. Samsung and LG didn’t plaster the town with massive banners, taxis weren’t covered in advertisements. It was not all bad though, the probability of being trampled by humans reduced, taxi lines were shorter (though no less annoying) and the quality of the show was still pretty good. We had a jam packed schedule. This note summarizes the observations from the show.

Numbers CTIA released its semi-annual numbers. For 2008: 270M subscribers, $148 billion in service revenues, $32 billion in data revenues (just for reference, this is more than the total global Hollywood box-office revenue which came in at $28B), 2.2 trillion in MOU, 1 trillion TXT messages. You can checkout our annual US data market analysis which was released last month here.

Etech Contest – Prior to the event, CTIA invited us to judge the Emerging Technology Contest. It was fun reviewing the various entries. The award winners are announced here. Congrats to all.

My CTIA started early with a couple of sessions at the pre-conference event - BRIC Mobile Market Summit. The quality of the discussion was pretty good. I gave a talk on the Opportunities in the Indian and Chinese mobile markets and discussed where the opportunities in these two fastest growing markets as well as dispel some myths that engulf most companies.

After that, I joined the panel with other experts in the industry to have a lengthy discussion of the trends and opportunities in these markets including Latin America.

Unfortunately, our workshop on “Monetizing Mobile User Generated Content” got canceled due to low attendance or maybe folks are just not interested in monetizing these days. I will be discussing some of the similar themes in my talk at the NAB Show (MES) in Vegas on 22^nd April. I will also be moderating a panel on Innovations in Mobile Experiences.

If interested, clients of Chetan Sharma Consulting can request the slides from any of the talks.

Themes: The main themes of the conference were: Broadband (primarily around 4G and LTE with sprinkles of WiMAX) and data usage, Green, Mobile Health, Appstores, Rich Communication and Social Networking.

Broadband

4G – My first 4G project was back in 2003 for NTT DoCoMo when 4G didn’t even enter industry’s vernacular. Most operators were figuring out their 3G strategies. Six years hence, we have come a long way. Broadband, 4G, and LTE were the core themes of the conference and there was visible progress from the last CTIA with more test results, actual devices, and real demos. While the current reports suggest that some form of deployment will take place in 2010, we don’t expect the “real” commercial deployments before 2011, LTE voice will even take longer. So, where does this leave WiMAX. With each passing day, the role of WiMAX as a niche technology is affirmed. The backhaul bottleneck problem is also becoming prominent and the enhancement of backhaul is behind the RF infrastructure to provide any substantive improvements in data throughputs at least in the near future.

I will be moderating a panel on 4G at Future in Review (FiRE) conference considered by Economist the best Tech conference on the planet (panelists include executives from Telstra, Qualcomm, Clearwire, and others) to get delve deeper into the evolution of 4G.

The Broadband Stimulus – Many companies are eying the $8B broadband stimulus package. The process of how they are going to be granted seems chaotic with unintended consequences. My feeling is that it is a lost opportunity. Instead of just looking at incremental enhancements, US could have been bold and improved existing and new broadband deployments by over 50-60 times. (More discussion here)

Mobile Health

Keynotes – I thought Dr. Eric Topol, Director, Scripps gave perhaps the most effective keynote addresses in recent memory. Keynotes are generally a drab affair. Instead of inspiring through vision many put the audience to sleep with their product announcements. Dr. Topol’s speech was so rich in content, his words were filled with such passion, and his articulation was so inspiring that most entrepreneurs in the room were energized to make a difference. I commend CTIA for inviting him. He is joining Qualcomm’s Don Jones (a fierce proponent of mHealth) and others to form the first ever Wireless Health Institute in San Diego. Expect some really cool stuff to come out of them. However, to be most effective, health institutions need to get on board with the program starting with the simplest of things like “txt messages.” Come on folks, move into the 21^st century!

Health – For the first time, there was significant discussion on mobile’s impact on the health care industry. My masters is in Biomedical Engineering so it is great to see the marriage between the two industries. I strongly believe if we can get past some of the bureaucratic nonsense, mobile can have a significant lasting impact on the quality of life and healthcare in both the developing and developed nations. Some of the stuff is really amazing (iBrain, iPill, iShoe, you get the picture). I will have more discussion on the subject in the coming days.

Applications and Services

You say appstore, I say appworld, you say market, I say marketplace – I have been working on appstores for so long that I can’t help but be amused by the recent frenzy of appstores sprouting like mushrooms. I think overall it is good for the industry as each of the providers will push each other in areas of innovation and pricing models thus opening up the industry for developers and consumers. However, the fragmentation also increases as a result and something has to give because developer’s attention and resources are finite. There aren’t many companies who can pull-off a successful developer program (this is one area where Microsoft has some advantage because of significant experience in cultivating developers). Apple’s model has already forced carriers to accelerate their short-term and long-term strategies. T-Mobile USA saw the writing on the wall earlier than most and is further along in its plans. Current implementations are still quite primitive with much potential for improvement.

Rich Communication – Talked to some companies (Aylus, Ericsson, Alcatel-Lucent, etc.) about rich communication services that integrate various experiences on the mobile device including chat, voice, data, social networking, video, etc., onto a single screen. The user experience is enhanced leading to newer sources of revenues for operators.

Netbooks also seem to be on operator roadmaps with 33% of these devices expected to be sold through the carrier channels in 3 years. Will Nokia and Motorola get active in this space? Or will the new entrants use netbooks to enter the phone market? Inspired by Kindle, many players are getting bolder and investing in application specific devices (a trend we wrote about in our mobile advertising book last year). Examples: a cool new wireless video game console – Zeebo being launched in Brazil and nuvifone being launched by Garmin and Asus.

Mobile Social Networking – Some interesting social networking features and functions are coming down the line. I am convinced that carriers need to treat social networking as a core service rather than a bolt on application. I almost wrote a book “The Facebook Effect” but 3 books in a year were too many so taking a break for now. (Maybe the next one will be “The Twitter Effect”).

Mobile Advertising – Though we have been involved with several mobile advertising projects, at the show, it felt the segment excitement was quite flat and many companies are struggling to stay in business. The consolidation hasn’t come yet but things are likely to start changing in the next few months. I also think that industry needs to start thinking about much more compelling and engaging closed-loop creative experiences rather than just impressions. Also, third party verification is needed (who is going to step up?). Finally, the role of the mediation layer is becoming important. The real substantive announcement came before CTIA with four major US operators agreeing to collaborate on best practices. Kudos to MMA for orchestrating the agreement.

Green

Green is the new black – With so much focus on cleantech and global warming, vendors are stepping up and making a dent in the carbon put out by the industry. There were some really cool solar chargeable devices as well as applications that keep the users green-aware. Being green is a competitive advantage.

Miscellaneous

Devices – The quality of devices that coming out keeps getting better. Stuff coming out from Samsung, LG, and INQ is pretty darn cool (Motorola, Nokia, Palm have some good stuff coming out as well). There were some neat concept phones on display as well (I know, I know, we are ways out but I think we will see some of these come to light sooner than we think). I thought one of the coolest new device was from LG – GD900 with transparent keypad. Samsung’s DLNA and AMOLED based devices were also quite good. They were also showing the WiMAX Smartphone Mondi. ZTE is also planning to enter the US market in a big way. While new Androids were hard to spot, several of them are scheduled to be released in the next few months.

NTT DoCoMo – Each CTIA, I love spending time in DoCoMo’s booth as they are always at the cutting edge of what’s to come. Downloading your digital key to your handset to open your hotel room by waving your phone, controlling every piece of equipment in your home via your cell phone, i-concier: your friendly on-screen butler, separable phones were some of the highlights.

Best booth: Most Creative – SpinVox, Most Hip – LG

Interesting companies – While it is difficult to meet each of the upcoming startups, couple of companies caught our attention: Waze out of Israel with its crowd-sourcing based approach to real-time traffic information and Kovio with its ability to lower the cost of printed silicon.

3G connection – My 3G connection was so good throughout the show that I didn’t need to lug my laptop around and did 100% of my communications for 3 days from my phone.

Your feedback is always welcome.

Thanks

Chetan

Disclaimer: Some of the companies mentioned in this note are our clients.

US Wireless Data Market Update Q408 and 2008 March 2, 2009

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carriers, Devices, European Wireless Market, Indian Wireless Market, Japan Wireless Market, Location Based Services, Middleware, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Search, Speaking Engagements, US Wireless Market, WiMax, Wireless Value Chain, Worldwide Wireless Market , 2 comments

US Wireless Data Market Update Q408 and 2008

Download PPT (1.9MB)

Download PDF (3.1MB)

http://www.chetansharma.com/usmarketupdate2008.htm

Executive Summary

The US wireless data market continued to ignore the recession doldrums in Q4 2008 and grew 7.3% Q/Q and 38.7% from Q407 to reach $9.4B in mobile data services revenues. In 2008, the mobile data services revenues reached our original estimate of $34B. Even as the global industry crossed 4B in subscriptions and $1T in total revenues, the nervousness due to the current recession has been palpable. While the flailing economy has started to hit hard on the wireless data ecosystem esp. the infrastructure and handsets segments, consumers haven’t really pulled back on mobile data spending overall, just yet. There are sub-segments within mobile data revenue stream that are starting to feel the pinch like data card subscriptions and downloadables. Also, in an event of a longer recession, the fate of the US mobile industry will be more closely tied to the overall economy this time compared to the previous recessions.

US Wireless Industry in Recession - A collision of two perfect storms

Back in 2005, we published a paper titled “3G - Hitting the Mass Market” in which we presented the case for an explosive market growth in the US market riding on the back of 3G and posited that by 2009, US will become the leading nation in terms of the number of 3G subscribers. As of 2008, US crossed 100M 3G subscribers catapulting ahead of all industrialized nations in terms of total subscribers (% penetration was around 40%). The paper was based on our work in various markets and study of diffusion trends in the global markets. That study became the subject of several articles and cover stories and was one of the central documents (including our testimony in the case and a report to the President) referred to in one of the most prominent wireless industry cases in front of the US International Trade Commission. Our basic thesis was simple - once you have the favorable ecosystem factors in place, the market is ripe for explosive growth.

2008 was a key year for growth in the mobile data services adoption in the US market. The confluence of 3G, better devices and the smartphones, and the applications ecosystem set the stage for tremendous growth. We already saw signs of significant user adoption and the market grew 7-9% QoQ each quarter in 2008. From almost being in the bottom-most square in 2005 (in our 9-box ARPU charts), US market gained strength to find itself amongst the leaders by the end of 2008 (more on this in our Global Wireless Data Market update for 2008 coming out later this month). At mid-2008 point, 2009 looked to be another year of growth and adoption.

However, the current recession is not your parent’s recession. The problems with the economy are so deep and its impact on the consumer spending and sentiment is so massive that most economists are scrambling to make sense of it. Nobody really has a firm grip on how to fix the current mess because a recession of this magnitude complicated by a globalized economy hasn’t occurred before, so there is no playbook to lean on. We might get lucky and things could turn around in a couple of quarters but things could also take a turn for the worst that might take many more quarters to recover. Markets are incredibly volatile and so are the consumers. All consumer confidence indices are down to their worst ratings ever (The Conference Board Consumer Confidence Index was down to 25 (on a relative scale of 100) to reach yet another all-time low in February (index began in 1967)).

So, we stand at the junction of two perfect storms - one that has the promise of an incredible surf to take the mobile industry to new heights while the other is hell bent on destroying everything in its path. Will the growth surf be strong enough to absorb the economic tidal wave? or will it set us back in time? or will we end up somewhere in between?

The answer lies in how quickly the consumer sentiment and market psychology improves and stays consistently positive over a period of 3-6 months. If the situation improves in the next 1-2 quarters, the recession will be all but a blip in the overall US mobile data market historic charts. If however, this downward spiral continues and the confidence in the markets is not restored, consumers will start cutting some of the discretionary mobile data spending, even cutting down some family lines, and downgrading of mobile plans (including data) at an accelerated rate. If it is the latter, we are in for a fundamental reset of the economy as Steve Ballmer eloquently outlined in his talk to the Democratic Caucus in Feb.

Impact on the US Wireless Industry during Recessions (Slides 11 and 12)

The current recession is not the first one that the US wireless industry has faced but it is quite different this time around. The first one came in 1990 and lasted for one year and the second came amidst the dot-com bubble and terrorist attacks in 2001 and lasted for two years. Historically and logically, GDP and consumer spend is closely correlated. When the economy contracts, so does the consumer spending. A look into the income elasticity of demand indicates a change in consumer mobile services demand as a result of drop or change in consumer income. Different patterns of consumer demand emerge in different countries depending on the state of the industry during the specific downturn.

To put things in perspective, US represents 21% of the global economy and the US services revenue represents 1.1% of the US economy as of 2008. In access of 70% of the US economy is linked to consumer consumption so you can see the tight linkage between the GDP and the consumer spending (the US consumer spending alone is more than the economies of China and India combined).

If we compare the US GDP data to the mobile services revenues and subscriber data, there is some correlation during recessions i.e. service revenues contract but the state of the industry was quite different around on previous occasions. The % change in mobile services revenues and subscriptions went down with the drop in GDP in both instances and recovered as the GDP pulled back after the recession. During the first recession, mobile was a niche service. By 2001, mobile had passed the inflection point on to become a mass-market phenomenon but data services market was largely non-existent. By 2008, the US mobile market had matured with high-degree of subscriber penetration and mobile data had become a healthy and vibrant industry.

Let’s look at how the mobile industry behaved in the various recessionary periods over the past two decades.

1990-1991 The % GDP change (GDP compared to previous year) dropped from 5.8% in 1990 to 3.3% in 1991. The mobile services revenues % change dropped from 36% to 26% over the same time period, the subscriber % growth dropped from 51% to 43%. Subscriber penetration at the end of 1990 was around 3%. Given the smaller base, the drop in mobile numbers can be partially attributed to the fact that as the % subscriber penetration grows the % change numbers come down anyway. In 1992, when % GDP jumped to 5.7%, the % change in mobile services revenues and total subscribers jumped to 46% and 37% respectively, thus quickly reversing the downward trend.

2001-2003 The % GDP change dropped from 5.9% in 2000 to 3.2% in 2001. Over the same period, % change in mobile services revenues dropped from 31% to 24% and % change in total subscribers dropped from 27% to 17%. However, as you would see in slide 11, these numbers have been slowly dropping regardless of the recession as the subscriber and revenue base grew. The subscriber penetration in 2000 was 39%.

2007- The % GDP change dropped from 4.8% in 2007 to 2.3% in 2008. Q4 2008 reported a drop by 6.2% QoQ in one of the sharpest declines in the last quarter century. The nature of this recession is quite different as well. While the previous recessions were limited to certain segments of the overall economy, the current recession has touched almost all sectors with a vengeance. The subscriber penetration at the end of 2008 was 89%. The overall ARPU stayed pretty steady around $50 between 2001 and 2008, while data ARPU became a growing component of the overall mobile services revenue.

What to expect in the coming months?

As we noted in our Q3 2008 note, in some sense, the Christmas quarter might have masked some of the microtrends within the mobile data segment of the industry though Europe started to feel the pinch in Q4. If one looks deeper into the sub segments, as we contemplated in our Q3 research note, it is clear that the layoffs are having an impact on the data card revenues (which account for approx. 10-12% of the overall mobile data revenues in the US) as the enterprises are dropping access cards with employees. Downloadables revenues were down from some segments of the user base as discretionary spending tightens.

Also, there was a shift from postpaid to prepaid in some user segments. For example, for T-Mobile, prepaid constituted 57% of the net-adds in Q408 sharply up from 23% in Q407 (though Suncom subscriber base probably has something to do with it). Rising unemployment has accelerated another trend - landline replacement by Mobile which reached almost 20% by Q408 (of course this benefits the mobile industry). This trend is irreversible unless new experiences can be introduced.

Messaging continues to grow. The messaging volume jumped 15% and messaging revenue was up 5.5% QoQ. The data access (excluding data card) including flat rate data plan subscriptions have also showed significant strength offlate. In addition to smartphones, we are also seeing increased mobile data activity amongst feature phone users.

The key question is - will the increase in the mobile data subscriber base nullify the loss in data subscriptions? and the answer seems to be - likely yes. But, if the job losses continue at the current rate, we will start to see flattening of data revenues in Q109 for some operators and a gradual decline over the course of the year. We have already started to see infrastructure (operators are slowing down 3G/4G investment) and device segments (replacement cycles are getting longer) getting hit pretty hard. Smartphones remain a bright spot, which in turn has a direct positive impact on the data revenues. Even with the decline in handset sales, smartphone segment will continue to increase in 2009 accounting for almost 30% of the overall device shipments.

As we eluded to earlier, another factor at play is the growth in 3G and smartphone penetration in the US market, both of which have been responsible for increasing the usage and hence the data revenues. At the end of Q408, 3G penetration was approximately 40% and the data penetration had reached 60%. Smartphone penetration has been inching up as well. In fact, all the service providers and OEMs have been targeting sub-$200 price point, which seems to be a good sweet spot for consumer adoption. The above two factors have also been helping negate any cancellations or downgrading of data plans.

We are likely to see continued price and margin pressure on subscription plans and as a result, voice ARPU will continue its downward trend and data ARPU will become a more prominent factor of the overall ARPU mix by the end of 2009. The longer the recession lasts, the more permanent the shift in voice ARPU becomes. Customer retention will edge customer acquisition. Same would be true with the consumer behavior and expectations. This will lead to new business and pricing models for e.g. some will find the low flat rate pricing untenable in the long-run without a fundamental rethink of the network and business architecture.

The percentage contribution to the overall ARPU from data reached almost 25% in 2008 and is likely to exceed 30% by the end of 2009. For the first time since 1998, the voice ARPU dip below $40 in the US.

During the last downturn, the likes of Google emerged. These players didn’t have much to do with the mobile market at the time but have gradually put their indelible stamp on the future of the industry. It is almost certain that new media and telecom models will emerge as a result of the current crises with new players shaping the next decade of the mobile industry.

Whether this recession invites regulatory intervention remains to be seen. Government can encourage mobile adoption by reducing taxes and fees on mobile services, avoiding unnecessary regulations, making more spectrum readily available, increasing competition, investing and incentivizing in mobile broadband.

Also, will the industry price or innovate its way out of this recession? The short-term knee-jerk reaction is to generally lean on price-differentiation but innovative services and business models can lay the ground work for a more sustainable differentiation and long-term benefits from new services adoption.

Coming back to the 2008 forecasts, our estimate of the mobile data revenues was spot on. The annual mobile data services revenue stood at $34B. We will be keeping a very close eye on the micro- and macro-trends and reporting on the market on a regular basis in various private and public settings. Q109 numbers will give us a better insight into the impact of the current recession on the US mobile industry and the global markets at large.

The bottom line is that in an event of a long and deep recession (i.e. beyond 2009), which I am afraid seems to be the case, the fate of the US mobile industry will be more closely tied to the overall economy this time compared to the previous recessions. If the consumer and market sentiment improves within the next 3-6 months, the mobile data industry will continue its rapid growth. Despite a difficult environment, we expect the mobile data services revenues to grow by at least 15% YOY in 2009.

Against this backdrop, the analysis of the Q408 and 2008 US wireless data market is:

Service Revenues (Slides 14 , 21, 22)

The US Wireless data service revenues grew 7.3% Q/Q to $9.4B in Q408. Compared to Q407, the data service revenues grew 38.7%.
AT&T’s data revenues grew the most - 12% QoQ and 52% YoY. Verizon experienced a 42% lift and T-Mobile saw a 30% increase in YoY data revenue growth. As expected, both AT&T and Verizon became two of the four operators to exceed $10B in data revenues for the year for the first time by (global) operators besides NTT DoCoMo (China Mobile is the other carrier to join the club).
AT&T surpassed Verizon in data revenues for the first time since 2005 though for the year Verizon still ended up being ahead for the third straight year.
AT&T and Verizon now account for 62.5% of the market data services revenues. Sprint had a third consecutive quarter of data revenue growth after falling behind its peers for the past couple of years.
The average industry percentage contribution of data to overall ARPU reached 25%. In 2007, the percentage contribution stood at approximately 19.3%. US market is likely to exceed the 30% mark in 2009.
T-Mobile USA edged past O2 UK to secure the 8th spot in the top 10 rankings of global mobile operators by data revenues. For the year, Verizon and AT&T improved their rankings to #3 and #4 respectively at the expense of KDDI which dropped to #5. Sprint Nextel maintained its # 6 spot. AT&T and Verizon are in the select group of four global operators who are now generating almost $3B or more in data revenues/quarter (the other two are NTT DoCoMo and China Mobile).

ARPU (Slides15-18)

Overall ARPU decreased by $0.36. Average voice ARPU declined by $1.13 while average data ARPU grew by $0.77 or 6% but couldn’t negate the drop in voice ARPU.
AT&T led in postpaid data ARPU at $16.30 (or 27.35% of the revenues) followed by Sprint at $14.50 (or 25.89%).

Subscribers (Slides 19-20)

In 2008, the US market added almost 15M new subscriptions down 32% from 2007. Q4 also saw a decline from Q3 net-adds for the first time in recent memory.
The number of data subscribers has been on the rise with Verizon leading the way. At the end of Q408, Verizon had 74% of its subscribers using some form of data services. The messaging volumes in the US market now average over 110B messages/month or at the frequency of a message/sub every 2 hours. In comparison users in Philippines average routinely send on an average, a message every hour.
In terms of net-adds, AT&T led in Q408 with 2.1M net-adds, edging its friendly rival Verizon which added 1.4M net subscriptions. Sprint lost another 1.3M in Q408.
With its Alltel acquisition, Verizon became the number one carrier in the US easily overtaking AT&T. It now has 80M subs and secured the bragging rights to being the biggest operator in the Americas.
The 3G penetration in the US touched 40% in Q408. Verizon led the pack with over 65% 3G subscriber penetration. T-Mobile is slowly expanding its 3G coverage. The growth in 3G and smartphones is helping offset some of the downward pressure on the data revenues and overall ARPU.

Applications and Services

Non-messaging services continue to grab 50-60% of the data revenues for the US carriers.
The flat-rate pricing movement that was started by Willcom in Japan which moved to Europe started to take firm roots in the US market with industry wide flat-rate pricing plans that included data. All the major carriers seem to be offering flat-fee access plans for most of the new smartphones being introduced in the market. Approximately 15% of the consumers have flat-rate data plans. We will see a further acceleration of this trend aided by the recession.
There are probably 18-20 sub-segments within mobile data services and consolidation looms. Who will be the last man standing post the nuclear winter? While the valuations are still high for rapid consolidation, we think that due to recession pressure, the M&A scene will heat up by Q309.
Will Mobile Advertising be the rising star from the crisis or one of its victims? Clearly, there are a number of advertisers and brands that are scaling back on the experimental dollars thus shrinking the mobile ad spend. On the other hand there are some savvy brands that are pulling back from the traditional mediums like print which don’t really work and putting more money into digital including mobile. Mobile offers the best ROI of all mediums but there is lot of ground work to be done before it becomes a thriving advertising channel. In fact, for the mobile media and content ecosystem, mobile advertising lends very well to the belt-tightening trends. It will be interesting to see if operators use this opportunity to lay the foundations of a long-term mobile advertising strategy or ignore it completely. Stay tuned for some of our thoughts on the subject. Incidentally, this week marks the one year anniversary of our best-selling Mobile Advertising book. Our thanks to all the readers and companies who have adopted it into their education and sales curriculums and product strategies making it a worldwide success.
As we had mentioned back in July, Apple easily surpassed its 10M target in Q308 buoyed by its 100 country expansion plan. The broadband and appstore capabilities are quite attractive to consumers and it shows. VPN and direct access to Exchange is helping in getting many more users into the mix and making IT folks less apprehensive. The clearcut business model of 30/70 split is also attractive. While there is no dearth of applications, findability remains a challenge.
Apple’s success is inspiring carriers and OEMs to launch similar app-stores. Many operators launched an upgraded version of their existing Appstore offerings (and so did Google and RIM, even Microsoft and Nokia) along the lines of Apple’s initiative with promises of greater control to the application developers. However, many of such initiatives will fall flat due to weak developer ecosystems.

Handsets

Nokia eclipsed 100M unit sale in Q408 for the seventh straight quarter. It sold over 113M handsets in the quarter, more than the next three players combined. Nokia’s global market share stood at 38.6%. Samsung surged to 52.8M in handset sales for the quarter. For the year, the industry again eclipsed the 1 billion handset mark for 2008 and had a modest growth of 3.5% but the overall handset sales are likely to decline by 10-15% in 2009 (though still exceeding 1B).
The growth in smartphone usage is also putting pressure on the networks which are not able to handle the load during peak times in certain cities thus forcing carriers to look for alternate strategies to satisfy the demand for broadband - metered billing, UMA, Femtocells, Hotspot buys, WiMAX, LTE, and others. We deal with the whole topic of Wireless Broadband in great detail in our recently released book “Wireless Broadband - Conflict and Convergence” (IEEE Press/John Wiley). We will have more to say on the subject in the coming days and months.
Q4 also saw the launch of the fabled G-phone as G1 Google phone launched by T-Mobile in the US market and it is slowly making its way into Europe. While G1 is no iPhone, it introduced long-awaited features such as multiple processes, more open APIs, and others. Motorola, HTC, and others are said to be planning to launch more Android devices in 2009. The smartphone segment has clearly shaken up the market with Apple, Google, RIM, and Nokia being the main competitors. Microsoft appears to be waking up from its slumber and is rethinking its mobile strategy starting with an easy button.

Misc. (Slide 23)

Not surprisingly, Venture money in the mobile sector experienced a rapid decline. Compared to Q407, venture financing declined by 36%, and the yearly totals are 26% lower than what they were a year ago. (Source: Rutberg)
While WiMAX was launched with great fanfare with several key players participating in the investment pool, its long term prospects look uncertain as the delays in getting a nationwide network by a major operator in a major economy threatens the underpinnings of this nascent industry segment. To be relevant, the WiMAX fraternity needs to figure out some solutions in a hurry.
In a sign of convergence battles to come, T-Mobile’s @Home and various Femto cell initiatives started to take hold. Cable operators are also aggressively seeking triple-play by providing the wireless component of the service. Don’t be surprised by some acquisitions in 2009.

Preliminary Global Update (Slides 21-22)

China and India continued their red-hot growth throughout 2008. Combined, they added 212.8M new subscriptions with India edging China by 15% for the first time in yearly net-adds. India made mockery of the current economic climate by its unprecedented growth. In fact, for the past 5 months, India has been displaying Phelpsesque like flair (minus the pot excursion) in setting and beating its world record for 6 straight months. For the last 5 months, the market has been exceeding 10M net-adds/month with Jan 09 being at a whopping 15.4M making it a record for monthly net-adds in a given country at anytime in the history of the industry or any industry for that matter (we are still trying to figure out what led to such a jump).
NTT DoCoMo continues to dominate the wireless data revenues rankings with over $4B in data services revenue in Q408 and almost $15B for the year. Almost 42% of its overall revenue now comes from data services. DoCoMo also crossed 88% in 3G penetration in Q408 and will cross the 90% mark this week.
Most of the major carriers around the world have double digit percentage contribution to their overall ARPU from data services. Many operators are consistently exceeding 30% with DoCoMo and Softbank being over 40%.

We will be keeping a close eye on the trends in the wireless data sector in our blog, future research reports, and articles. The next Global Wireless Data Market update will be issued in March 2009 and the next US Wireless Data Market update will be issued in May 2009.

To the 1% of you who have made it this far, thanks very much for your time and attention.

Your feedback is always welcome.

Should you need assistance in navigating or understanding the economic and competitive icebergs, please feel free to drop us a line.

Thanks.

Chetan Sharma

Disclaimer: Some of the companies mentioned in this note are our clients.

Mobile Industry Predictions 2009 January 1, 2009

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, CTIA, Carriers, Enterprise Mobility, European Wireless Market, Gaming, Indian Wireless Market, Infrastructure, Intellectual Property, Japan Wireless Market, Location Based Services, M&A, MVNO, Mergers and Acquisitions, Microsoft Mobile, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, Mobile Users, Mobile Wallet, Music Player, Privacy, Speaking Engagements, Strategy, US Wireless Market, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 3 comments

Mobile Industry Predictions 2009

2009 Mobile Industry Predictions Survey

View SlideShare presentation or Upload your own. (tags: google microsoft)

http://www.chetansharma.com/MobilePredictions2009.htm

Download PPT (2.1M)

Download PDF (2.9M)

First things first. From all of us at Chetan Sharma Consulting, wish you and yours a very happy and prosperous 2009.

Before we get into what’s to come, let’s do a quick wrap-up of the year that was.

While 2007 was remembered as “the year of the iPhone,” in 2008, though iPhone and Appstore again dominated the headlines as “Touch” became the new black, iPhone shared the spotlight with Android and the resurgent RIM. The deafening roar of “Openness” that started to bubble up during Q407 permeated the ecosystem in 2008. Responding to the iPhone, OEMs raced to introduce Touch phones - Instinct, Armani, Storm, N2, Glimmer, Vu, G1, Diamond, Dare, N97, 5800, and others.

Apple reached its 10M goal a full quarter early and Gphone’s 1M number was impressive. The Clearwire deal was consummated though it meanders through the clouds of uncertainty. Blyk continued to defy expectations. We made significant headway in energizing the mobile advertising sub segment but the tough problems of privacy, education, control, fragmentation, and user experience remain. LBS picked up steam and mobility started to get into the alternate consumer device universe which with the help of Amazon kindle and PNDs have started a new chain of AORTA devices.

In terms of actual numbers, the mobile industry exceeded 1 Trillion USD in revenues for the first time with services revenue making up 80% of the mix and 20% being contributed by infrastructure, handsets, and misc. Several operators are now exceeding $2B/quarter in data revenues.

Several subscription milestones throughout the year: 50% penetration, almost 4B worldwide, 600M China, 300M India. India and China both added more than 100M subs in 2008. As expected, 3G crossed the inflection point in the western markets (30%+ penetration) while in Korea and Japan, it was getting hard to find people without 3G (85%+ penetration). Mobile web penetration is above 25% and is becoming quite significant.

Thanks to the iPhone, we seem to have settled on sub-$200 smartphones with race to $150 and $100 on the cards. Flat-rate data subscriptions went above 10% in the western markets. Over 20% of the global service revenues are not dependent on data while non-SMS revenues surged past 40%. With the advent of Femto and UMA, we might see a new front in the battle for the digital home, esp. as bundling and quad-play offers become common place and convergence starts to take different shapes, forms, and business models. Carriers are starting to worry about mobile data usage and looking for alternate strategies and business models. Chinese OEMs started to become more dominant and started to win some major accounts. Don’t be surprised by a major acquisition by them in 09.

Among other events of significance: Mobile TV continued to suffer from highpricendititis, Helio shut down, China and India delayed 3G, WM got updated as MS got behind, Yahoo cemented some impressive operator deals as GYM got more active in mobile, Microsoft entangled Yahoo in a mating dance, Mobile Open got into the industry physce, 700 MHz auction drama ensued, Beijing Olympics rocked, SMS handed the presidency to Obama, Whitespaces and FCC tangled, LTE dominated, UMB died, Admob exponentiated, M&A slowed, IP scuffles continued, over 1.2B new devices shipped, Nokia sold more than 100M devices in each quarter, Samsung surged, Motorola pondered, AT&T iJoyed, Vodafone said Namaste India, US edged past Japan in mobile data revenues, DoCoMo continued to dominate the mobile data revenues rankings, India edged past US in total mobile subscribers, Mobile Facebook spread, Twitter tweeped, Symbian went open source, Sequoia panicked, INQ launched, Economy tanked, WalMart started selling iPhone, Palm got a lifeline, Change was in the air.

We covered these is much detail in our regular industry research notes, books, whitepapers, blog posts, speeches, panels, and more. Look forward to continuing the conversation this year.

2009 will also be a pretty eventful year from several perspectives: business models, user experience and expectations, ecosystem posturing, disruption, and friction. How are things going to shape up? What will be hot and what will fade into oblivion? How will competition shape up the new sub-segments?

We put some of the questions to our colleagues in the industry. We were able to glean some valuable insights from their choices and comments. This survey is different from some of the others in the sense that industry movers and shakers participate. Executives and insiders (n=200) from leading mobile companies across the value chain and around the world opined to help us see what 2009 might bring.

Six names were randomly drawn for one of our three books released in 2008 (Mobile Advertising, Enterprise Mobility and Wireless Broadband)

The winners are:

Akio Orii, CFO and VP, Toyota
Declan Carew, New Product Strategy Manager, Vodafone
Helen Keegan, Consultant, Beep Marketing
Rich Begert, CEO, Singlepoint, and
Russ McGuire, VP, Sprint Nextel
Jonathan Ebinger, General Partner, Blue Run Ventures

Congrats and Thank You.

Now onto the survey results. The makeup of the respondents below:

Will we see a pull-back in mobile data spending globally/in the US?

The wireless data industry has been somewhat unharmed so far (though OEMs and Infrastructure providers are bearing the brunt of the economic storm). Flat rate pricing, smartphones, 3G networks, better UX are all helping in the continued surge of mobile data consumption and hence revenues. Most expect that though we might see some scaling back in mobile data spending, overall, the growth will continue. The global markets will be slightly better off than the US.

Will Android handset sales exceed iPhone’s in 2009?

The overwhelming majority thought that iPhone will continue to dominate Android in 2009 though 2010 could be a different story. Android has had a good start and if the number of handsets keep on increasing with more carriers carrying it in more countries, Android might not exceed but can come awfully close.

Mirror, Mirror on the wall, who will be the most open of them all?

“OPEN” was the biggest buzzword of 2008 though it means different things to different people. Almost everyone thinks, Google is likely to set the agenda on “open” for others to follow.

Will Apple launch new iPhone models in 2009?

The answer is yes but will they be just minor upgrades or shake-the-market new models. With Android, Nokia, and RIM breathing down its neck, Apple will need more than just upgrades to maintain the limelight.

Will Mobile Advertising see a rise in ad-spend in 2009?

There might be some slow down but mobile advertising ad-spend will keep on increasing. Targeting capability is increasing and CPMs are coming down making for a more efficient mobile channel for advertising. In our own work, we have seen brands fall into two camps: one who are scaling down on inefficient channels like print and radio and moving money into digital including mobile and the others who don’t have quite the appetite for mobile and want to keep investing in channels that they are most familiar with.

Will India and China launch nationwide 3G in 2009?

After many years of delay, the two powerhouses set to launch 3G in 2009. China with TD-SCDMA/WCDMA and India with WCDMA are set to doll out some of the largest contracts seen in the industry.

Will Mobile Payments get any traction in North America and Western Europe?

The plans for mobile payments launch will get pulled back a bit due to the economic crisis. Limited rollouts and trials to continue. Some progress will be made in international mobile remittances.

Will Microsoft launch its own mobile phone?

Will they, Won’t they? How can they not? The probability increased from last year for an Mphone coming to a store near you. But, with the boeingification of Microsoft, it is hard to get any decisions to the market quickly.

Will Clearwire meet the 1.3 million subscriber target in 2009?

The economic climate might force slow-down of expansion and thus the optimistic subscriber forecasts could be impacted.

Will Mobile Open Source mitigate fragmentation?

Not a clear cut answer. Depends on how other versions of Android phones do in the market and if the application development remains a challenge across the Android and Symbian family of devices.

Will cable companies make a major play in wireless in 2009?

Quad-Play is the name of the game. Cable companies have invested half-heartedly thus far. 2009 might be the year they move in aggressively.

Will Microsoft buy RIM?

RIM has become too big and powerful to be consumed by Microsoft easily but desperate times call for desperate measures.

Will Obama’s administration have a major impact on network neutrality and open networks debate?

Not a priority for now. No high expectations, just regular bureaucratic grind.

Will carriers start launching Apple/Android style appstores?

Opinions remain divided. I think most are tempted to build but will outsource the development.

Will Microsoft make windows mobile free to OEMs?

Android (and to some extent Symbian) has pushed Microsoft in a corner. Will it preempt the demise of its pricing strategy? Reduction in price might be the safest bet at this time.

Will the smartphone penetration hit the inflection point in the western markets?

We are getting to that inflection point. 2009 seems to be the year with major implications for the ecosystem.

Will UMA/Femtocells cement their place in the mobile ecosystem?

As 3G networks get burdened by data usage, carriers will look to making UMA and Femtocells as a critical piece of their network strategy

Will consumer privacy and data security rise to be one of the important issues of 2009?

Privacy? What Privacy? Another celebrity mishap might pull this issue to the front burner.

Despite conventional wisdom, what will not happen in 2009?

There were many. Sampling - Microsoft will not buy Yahoo. US Cellular will not be sold. Global economy will not recover in 2009. LTE won’t be commercially deployed. India and China will struggle to get substantial progress with 3G. Motorola will not breakup. Nortel will not disappear. 2009 won’t be the year of mobile advertising.

It is hard to cover the mobile industry in 20 questions. As pointed out by our panelists, there are a number of other issues and opportunities that will help shape our ecosystem - monetization of social networks, the fight for mobile advertising dollars, continued impact of globalization, security and privacy, NFC, IMS, VoIP, enterprise apps beyond email, battery improvements, new interaction modalities, health risks of RF radiation, OpenSocial, GF/FB Connect, Comes with Music, Mobile Widgets, Mobile 3.0, LTE, MIDs, Off-portal, Embedded Mobile, M2M, and others.

However, be rest assured, we will be tracking these and much more throughout the year and sharing them through various channels.

Thanks again to everyone who contributed. We will be calling on you again next year. We are clearly living in “interesting times” with never a dull moment in our dynamic industry. It has been a terrific year for us here at Chetan Sharma Consulting and we are looking forward to 2009 and seeing many of you along the way.

Your feedback is always welcome.

Thanks.

Chetan Sharma

Disclaimer: Some of the companies mentioned in this note are our clients.

Recap of "Tomorrow’s Wireless Future" November 20, 2008

Posted by chetan in : 3G, 4G, AORTA, Carriers, Enterprise Mobility, European Wireless Market, Indian Wireless Market, International Trade, Japan Wireless Market, Location Based Services, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Smart Phones, Speaking Engagements, US Wireless Market, WiMax, Wireless Value Chain, Worldwide Wireless Market , 4 comments

Tomorrow’s Wireless Future

One of the reasons I love what I do is that I get a chance to work with really smart people around the world on some cutting-edge projects. Additionally, I get the opportunity to interview some of the brightest minds in the industry. This year has been particularly rewarding. I probably did close to 25 events which were a mix of keynote addresses, panel moderation, panel participation, university lectures, and other speeches. Add in the 20+ client project visits and it all translates into more than a trip every other week to the SeaTac airport. My suitcase has been permanently positioned at the doorstep in my house.

Earlier this week, I had the distinct honor of moderating a panel of some of the most eminent senior wireless research scientists and CEOs of wireless companies from Finland where we explored the future of the wireless landscape from user interface to reduction in carbon footprint to privacy and security issues and much more.

Also, had the privilege to do a Q&A session with Dr. Craig Barrett, Chairman of Intel Corporation after his keynote address. This note summarizes the topics discussed during the “Tomorrow’s Wireless World” event.

Many people might not be aware but the City of Oulu in the central part of Finland is a leading epicenter of wireless activities with many major industry players setting up shops for doing R&D work. In fact, it is quite likely that one of the companies out of Oulu has had an impact in some way on the mobile phone you have in your pocket (and we are not including Nokia).

The topic of our panel was “Your Wireless Future” – a broad topic that is always difficult to cover in 60 minutes or less. My illustrious panel included (from R to L):

· Prof. Juha Röning, Head of the Dept. Electrical and Information Engineering, Oulu University. A leading edge research center, many companies in Oulu have been spun out of this department

· Markus Asplund, VP, Sesca Technologies. A major services firm in the mobile industry

· Ari Pouttu, Director of Center of Wireless Communications, University of Oulu. A leading research center in doing work in access technologies.

· David Chartier, CEO, Codenomicon. A major player in the network security space. Their tools are used for hardening their products by companies such as Cisco, Apple, IBM, Nokia, and others.

· Craig O’Connell, Sr. Manager, Elektrobit. Working with pretty much all OEMs around the world

· Dr. Jussi Paakkari, VP, R&D ICT, VTT. Doing some cutting edge research in the area of network protocols, security, access, machine vision systems, and much more

· Purnima Kochikar, Director, Software and Services. Nokia. Well, you know Nokia

I started by asking the panelists about what in their view have been some of the defining trends over the last 12 months. Summary of answers – iPhone; android; move towards full mobile browser; browser will reduce fragmentation and more innovation will happen on this front; with the rise of smartphones, security and privacy have become an issue,

Some other salient points (read issues and opportunities) from the discussion:

· It is forecasted (by WWWRF) that in another 10 years, we will have 1000 radios per every subscriber. That would translate into few trillion nodes around us. The level of complexity and carbon footprint will be enormous. One has to figure out a way to address both.

· City of Oulu has first of a kind experiment with NFC where the technology has been embedded in day-to-day life from home, school, train station, restaurant, probably every object in the city. Pretty interesting experiment that will lead to interesting use cases and technology implementations.

· There are so many protocols being integrated into the device that hackers are targeting not only the data but the protocol weaknesses to gain access. IT finally starting to address smartphone issue in their networks.

· The role of Cognitive radio and SDRs will gain prominence as more access technologies get introduced.

· In a ubiquitous environment with finite spectrum, “sensing” technologies will have a great role in optimization. Sense and do the best for the consumer, the device, and the network. Hyper connectivity will become the norm.

· In addition to touch, gesture and face recognition will add to a better multimodal experience.

· Mobile payments is coming and going to make a big impact. We have to of course sort out the business models.

· 3Cs of mobile – convergence, context, and community (Nokia’s Mantra).

· The very business of R&D has changed significantly with corporations choosing to outsource R&D and the cycle of concept to market launch has shrunk from 6 years or more to 12-18 months.

· More innovation will come from integration of existing technologies rather than some big breakthrough.

· Demand for bandwidth will keep growing.

· Significant opportunities in medicine, enterprise, and other industry verticals.

· In developing countries, while consumers are willing to pay for expensive devices, they don’t have any appetite for expensive service plans.

Some discussion points from Craig’s speech and our Q&A session:

· World will go to free MIPS and free baud (computing and communications). What happens then?

· Moore’s law is good for another 15 years based on 5 generation of future chipsets that they have in the labs. And it will probably keep going after that.

· Awareness of context really important.

· Many types of devices will proliferate including MIDs, education devices, some designed specifically for special purpose (medical monitors) and geographies (emerging markets).

· Global challenges are education, health, computing, and communication.

· In the developed world, wireless technology can help reduce the cost which is increasing at the rate of $200B/year and in the developing world, technology can help provide access to health care.

· Convenience and access trumps security concerns.

· Areas of opportunities – Telemedicine, education, economic development, governance, energy and environment.

· This is Craig’s 11^th recession. Principle to tackle has been the same every time. You cannot save your way out of recession. You can only innovate out of a recession. Intel R&D budgets will remain the same.

· Innovation is key to surviving and competing in the global economy, now more so than ever.

· The fact that so much can be done in these tiny piece of electronics is just amazing and the drive to do better and more using technology keeps him going, keeps him inspired.

Craig is passionate about education and innovation and he serves on more global committees than he would care to admit. His work outside of Intel has been equally impactful.

It should be noted that the Matti Pennanen, Mayor of Oulu who also graced the event with his presence is a technologist at heart and understands the role of innovation in the growth and strengthening of their economy. How many tech-savvy Mayors do we have in other countries? I thought so. I have noticed similar trends in Korea, Ireland, and Israel. They all have something in common – great early education system and maniacal focus on innovation and desire to succeed. It was great chatting with Mayor Matti about technology trends and opportunities. In this global economy, politicians better become tech-savvy really fast or they won’t be serving their constituents well. Cities, states, and countries need to start thinking like startups and compete for every dollar.

My thanks to my friends Victor Vurpillat and Brenda Fox at Global Connexus and Pauliina Pikkujämsä at Oulu Innovation for inviting me to participate in the discussion.

Image Courtesy: Global Connexus

US Wireless Data Market Update - Q3 2008 November 16, 2008

Posted by chetan in : 3G, 4G, AORTA, ARPU, BRIC, Carriers, Japan Wireless Market, Location Based Services, Microsoft Mobile, Mobile Advertising, Mobile Ecosystem, Mobile Usability, Speaking Engagements, US Wireless Market, WiMax, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far

US Wireless Market Q3 2008 Update Nov 2008 Chetan Sharma Consulting

View SlideShare presentation or Upload your own. (tags: sharma chetan)

Download PPT (1.6M)

Download PDF (2.7M)

http://www.chetansharma.com/usmarketupdateq308.htm

Recession: Nice to meet you.

US_Wireless_Data_Market: I don’t know who you are but I won’t mind a bailout package.

The US wireless data market shrugged off the economic doldrums in Q3 2008 and grew 7.3% Q/Q and 37.5% from Q307 to reach $8.8B in data services revenues. The total for the year (for first 9 months) stands at $24.5B which is equal to the revenues generated in 2007 (full year). While the flailing economy has started to hit hard on the wireless data ecosystem esp. the infrastructure and handsets segments, consumers haven’t really pulled back on mobile data spending, just yet.

But will they? That is a $700B question. It is likely that more people will be willing to downgrade their Internet services, wireline usage, cable premium channels, restaurant eating frequency, energy consumption, vacation trips, and the gas mileage every week than reduce their wireless usage. But what about data services - broadly, they are divided into messaging, web and information access (includes data cards and subscriptions) and downloadables (games, ringtones, etc.). It is highly unlikely that people will change their messaging (which now accounts for approximately 40% of the revenues) habits overnight though we might see more subs going for package deals and family plans to save. We might also see growth in prepaid subscriptions in the US market. In fact, Q3 saw a jump in messaging volumes in the US by 38% and messaging revenues grew 6%.

Wireless WAN data card access is very useful for road warriors though some corporations might start limiting the number of employees using such services, we don’t think it will make substantial impact in most cases except for the fact that the layoffs in various sectors will start to ripple into the mobile sector and will start cutting into some of the enterprise mobile data revenues. The downloadables have already been in the declining mode for the last 9 quarters and we might see acceleration of that trend.

Next question is - will the increase in the subscriber base nullify the loss in data subscriptions and the answer seems to be - likely yes. But, if the job loss rate increases substantially, more than it has been in Q3 and into Q4, we might, just might, start to see flattening of data revenues in Q109 and gradual decline over the course of the year. Despite the unprecedented bailout from the US Treasury to abort a long recession, we are likely to be in for a longer winter than most anticipate because current efforts don’t even start to address the fundamentals of the financial crisis. The basic industry structure is still flawed. Unless the new administration strikes at the root cause of this mess, wireless data segment won’t be completely immune to the wider economic crisis. We have already started to see infrastructure (operators are slowing down 3G/4G investment) and device segments (replacement cycles are getting longer) getting hit pretty hard.

Another factor at play is the growth in 3G and smartphone penetration in the US market, both of which have been responsible for increasing the usage and hence the revenues. At the end of Q308, 3G penetration was approximately 37% and the data penetration had reached 56%. Smartphone penetration has been inching up as well. In fact, all the service providers and OEMs have been targeting sub-$200 price point, which seems to be a good sweet spot for consumer adoption. The above two factors will also help negate any cancellations or downgrading of data plans.

However, we are likely to see price pressure on subscription plans and as a result, voice ARPU will continue its downward trend and data ARPU will become a more dominant factor of the overall ARPU mix by the end of 2009. The percentage contribution from data is likely to exceed 25% by the end of 2008 and 30% by the end of 2009.

Operators in Europe have already started to feel the pinch starting with Vodafone and Telefonica who experienced decline in revenues (due to the decline in MOU and price pressure) some of which is a function of the heavy prepaid penetration. But, it should be noted that for Vodafone, though overall service revenues declined 1.7%, data revenues grew 30%. As we have been saying for years, data-mindset is needed for strategy, infrastructure design and investment to stay competitive in the changing landscape. Better offer packaging and lower price plans will also help in reducing service churn. Operators will also look to reduce their opex to boost profits.

Coming back to the 2008 forecasts, we still think that the US wireless data market is likely to come close to hitting our original estimate of $34B for the year given the seasonality of Q4 which is likely to negate any decline experienced by the industry. So, it might not be until Q109 before we know where the various data sub-segment are trending. If consumer confidence starts to reverse its trend in early 2009, we are likely to see slower growth but the data revenues will continue to grow from the current levels. However, the lack of policies or correction will further downgrade consumer sentiment, then, we might start to see decline in the US wireless data market for the first time probably starting around late Q209.

Against this backdrop, the analysis of the Q308 US wireless data market is:

The US Wireless data service revenues grew 7.3% Q/Q to $8.8B in Q208. Compared to Q307, the data service revenues grew 37.5%.
Overall ARPU decreased by $0.04. Average voice ARPU declined by $0.94 while average data ARPU grew by $0.90 or 8% almost negating the drop in voice ARPU.
Sprint led in data ARPU with $13.50 (or 24.11% of the revenues, followed by Verizon at $13.30 (or 25.49% of the revenues - first carrier to cross the 25% threshold),~~Verizon led in data ARPU with $13.58 (or 26.03% of the revenues - first carrier to cross the 25% threshold) closely followed by Sprint at $13.50 (or 24.11%),~~ AT&T at $12.29 (or 24.20%) and T-Mobile at $9 (or 18%).
All the top four carriers experienced approximately 8% increase in data revenues compared to the Q208 levels. Verizon with $2.8B in data revenues led AT&T at $2.7B, Sprint at $1.6B and T-Mobile at $850M. Both AT&T and Verizon are on target to be two of the three operators to exceed $10B in data revenues for the year for the first time by (global) operators besides NTT DoCoMo (the two US carriers are already over 75% of the target). China Mobile is the other operator which is going to cross the $10B mark in 2008.
AT&T and Verizon now account for 62% of the market data services revenues. Sprint had a second consecutive quarter of data revenue growth after falling behind its peers for the past couple of years.
The average industry percentage contribution of data to service revenues exceeded 23%. A year ago, the percentage contribution stood at approximately 17.7%. US market is likely to exceed the 25% mark in Q408.
The number of data subscribers has been on the rise with Verizon leading the way. At the end of Q308, Verizon had 74% of its subscribers using some form of data services. The messaging volumes in the US market now average over 105B messages/month or at the frequency of a message/sub every 2 hours. In comparison users in Philippines average routinely send on an average, a message every hour.
In terms of net-adds, Verizon continued to lead in Q308 with 2.1M net-adds (aided by an acquisition), again edging AT&T which had 2M net-adds for the quarter. Sprint continues to lose subscribers at an alarming rate, loosing another 1.3M in Q308.
T-Mobile USA moved to number 9 in the top 10 rankings of global mobile operators by data revenues. For the quarter, Verizon and AT&T improved their rankings to #3 and #4 respectively at the expense of KDDI which dropped to #5. Sprint Nextel maintained its # 6 spot. AT&T and Verizon are in the select group of five global operators who are now generating $2B or more in data revenues/quarter (the other three are NTT DoCoMo, China Mobile, and KDDI).
Non-messaging continues to grab 50-60% of the data revenues for the US carriers.
The flat-rate pricing movement that was started by Willcom in Japan which moved to Europe started to take firm roots in the US market with industry wide flat-rate pricing plans that included data. Sprint has been the most aggressive with its “Simply Everything” plans that include data services. 30% of its $100 plan is assigned to data revenues (for accounting purposes). All the major carriers seem to be offering flat-fee access plans for most of the new smartphones being introduced in the market. Approximately 13% of the consumers have flat-rate data plans.
As expected, the blockbuster acquisition of Alltel by Verizon got approved and the deal will close in the next few weeks making Verizon the top carrier in the US market with close to 85M subs by the end of year.
Q3 also saw the launch of the fabled G-phone as G1 Google phone launched by T-Mobile in the US market and it is slowly making its way into Europe. While G1 is no iPhone, it introduced long-awaited features such as multiple processes, more open APIs, and others. Motorola is said to be planning to launch Android devices in 2009. The smartphone segment has clearly shaken up the market with Apple, Google, RIM, and Nokia being the main competitors. Microsoft keeps misreading the market and is heavily under leveraging its strength and experience.
There are probably 18-20 sub-segments within mobile data services and consolidation looms. Who will be the last man standing post the nuclear winter? While the valuations are still high for rapid consolidation, we think that by Q209, the M&A scene is likely to heat up.
Will Mobile Advertising be the rising star from the crisis or one of its victims? Clearly, there are a number of advertisers and brands that are scaling back on the experimental dollars thus shrinking the mobile ad spend. On the other hand there are some savvy brands who are pulling back from the traditional mediums like print which don’t really work and putting more money into digital including mobile. It will be interesting to see if operators use the opportunity to lay the foundations of a long-term mobile advertising strategy. Stay tuned for some of our thoughts on the subject.
Venture money in the mobile sector experienced a rapid decline. Compared to Q307, venture financing declined by 88%, and the yearly totals are 35% lower than what they were a year ago. (Source: Rutberg)
Nokia eclipsed 100M unit sale in Q308 for the sixth straight quarter. It sold over 111.7M handsets in the quarter, more than the next three players combined. Nokia’s global market share declined to 37%. Samsung surged to 52M handset sale. Apple surpassed RIM in smartphone sales. For the year, the industry looks to again eclipse the 1 billion handset mark for 2008 but the overall handset sales will decline in 2009 (though still easily exceeding 1B).
The 3G penetration in the US went past 35% in Q308, with Verizon leading the pack with over 61% 3G subscriber penetration compared to the 30% 3G subscriber penetration at AT&T. T-Mobile is slowly expanding its 3G coverage. 3G subs have over $23 in data ARPU. The growth in 3G and smartphones is helping offset any downward pressure on the data revenues and overall ARPU.
As we had mentioned back in July, Apple easily surpassed its 10M target in Q308 buoyed by its 100 country expansion plan. The broadband and appstore capabilities are quite attractive to consumers and it shows. VPN and direct access to Exchange is helping in getting many more users into the mix and making IT folks less apprehensive. The clearcut business model of 30/70 split is also attractive.
T-Mobile also launched its own Appstore (and so did Google and RIM, even Microsoft) along the lines of Apple’s initiative with promises of greater control to the application developers.
The growth in smartphone usage is also putting pressure on the networks which are not able to handle the load during peak times in certain cities thus forcing carriers to look for alternate strategies to satisfy the demand for broadband - metered billing, UMA, Femtocells, Hotspot buys, WiMAX, LTE, and others. We deal with the whole topic of Wireless Broadband in great detail in our recently released book “Wireless Broadband - Conflict and Convergence” (Co-authored with one of the leading entrepreneurs in the space - Vern Fotheringham, published by IEEE Press and John Wiley). We will have more to say on the subject in the coming days and months.
After raising $14.5B from friends and family, Clearwire’s net-adds continued to drop in Q308. While the deal got approved, the economic climate is putting pressure on a comprehensive rollout strategy. Sprint did launch WiMAX in the Baltimore market with initial feedback from the sparse usage to be as advertised.
In a sign of convergence battles to come, T-Mobile’s @Home and Sprint’s Femto cell initiatives started to take hold. Cable operators are also aggressively seeking triple-play by providing the wireless component of the service. Don’t be surprised by some acquisitions in 2009.

Global update

China and India added approximately 52M subscriptions combined in Q308 with India edging out China. In Sept, India added more than 10M monthly subscriptions for the second time this year and its net-adds total for the first 9 months stands at 82M. By comparison China added 77M and US increased its tally by 11M.
NTT DoCoMo continues to dominate the wireless data revenues rankings with almost $3.9B in data services revenue in Q308, thus exceeding the $10B mark in just 9 months. Almost 41% of its revenue now comes from data services. DoCoMo also crossed 86% in 3G penetration in Q308 and is expected to cross the 90% mark by early 2009.
Most of the major carriers around the world have double digit percentage contribution to their overall ARPU from data services. Many operators are consistently exceeding 30% with DoCoMo and Softbank being over 40%.

We will be keeping a close eye on the trends in the wireless data sector in our blog and future research reports. The next US Wireless Data Market update and the Global Wireless Data Market update will be issued in March 2009. We will be doing an end of the year piece with forecasts and predictions for the coming year in Dec 2008.

Your feedback is always welcome.

Happy Thanksgiving and Happy Holidays.

Thanks.

Chetan Sharma

Disclaimer: Some of the companies mentioned in this note are our clients.

Global Wireless Data Market Update - 1H 2008 September 28, 2008

Posted by chetan in : 3G, 4G, AORTA, BRIC, Carriers, Enterprise Mobility, European Wireless Market, Gaming, IP Strategy, Indian Wireless Market, Japan Wireless Market, Location Based Services, MVNO, Messaging, Microsoft Mobile, Mobile Advertising, Mobile Applications, Mobile Content, Mobile Ecosystem, Mobile Entertainment, Mobile Gaming, Mobile Search, Mobile TV, Mobile Usability, Mobile Users, Mobile Wallet, Music Player, Smart Phones, Speaking Engagements, US Wireless Market, Unified Messaging, Wi-Fi, WiMax, Wireless Value Chain, Worldwide Wireless Market , 1 comment so far

Global Wireless Data Market 1h 2008 Update Sept 2008 Chetan Sharma Consulting

View SlideShare presentation or Upload your own.

Download PPT (1.9M)

Download PDF (3.2M)

http://www.chetansharma.com/globalmarketupdate1H08.htm

Global Wireless Markets continued to grow rapidly especially in India and China where the carriers are adding over 9M new subscriptions every month. India crossed the 300M subscription mark in Aug while China whizzed past 600M in September. Overall, the global subscriptions penetration edged past 50%. During the 1H 2008, revenues further tilted towards data services. The overall global mobile revenues (including equipment) for the year are likely to reach the 1 Trillion dollar landmark later this year (enough to bailout an economy or two), with approximately $800 billion attributed to service revenues. Data revenues now account for almost 20% of the global service revenues.

For some leading operators, data is now contributing close to 40% of the revenues however increase in data ARPU is not completely offsetting the drop in voice ARPU for most operators. From the true and tested SMS messaging to the new services such as Mobile Advertising, Social Networking, Commerce, Mobile Wallet, and others, different services helped in adding billions to the revenues generated for 1H 2008. Japan remains the envy of the global markets and the nation to study and learn from w.r.t. new services and applications. The US market expanded its lead over Japan in mobile data service revenues for the year and is unlikely to cede ground in the months to come.

Buoyed by the global launch of iPhone, Apple is likely to eclipse the 10M goal in Q308. Its App-Store launch along with Android’s imminent arrival dominated the news. Other manufacturers also introduced challengers to iPhone, most notably, Instinct by Samsung on the Sprint network which has also been quite successful in getting users to engage in data services.

WiMAX vs. LTE debate took over the EV-DO vs. WCDMA chatter and while majority of the industry is consolidating around LTE; open-platform advocates are watching the arrival of WiMAX in the US with great interest. Google, Sprint, Motorola, TWC, Comcast and others put new life into the experiment called Clearwire.

This note summarizes the findings from the research with added insights from our work in various global markets.

The global mobile markets continue to grow at an explosive pace reaching 3.6B subscriptions by 1H08 up 9% from EOY 2007 levels and will likely cross the 4B mark by the end of 2008. Significant growth is coming from India and China with both countries registering on an average 9M net adds per month. India and China combined to add approximately 107M new subscriptions during the first six months of 2008. Overall, the world market is now over the 50% penetration mark.
US edged past Japan again as the most valuable mobile data market in service revenue with US adding $15.7B vs. $13.6B for Japan in 1H08 mobile data service revenues. China with $7.8B was ranked number 3. US registered the highest growth amongst the top 3 with over 18% increase from EOY 2007 levels followed by China at 9% and Japan at 7%. These top 3 markets account for just under 50% of the mobile global data service revenues.
NTT DoCoMo continues to dominate the wireless data service revenue rankings with over $6.8B in service data revenues for 1H08; however, Q/Q growth is declining. DoCoMo crossed 84% in 3G penetration and is expected to touch 90% by end of the year.
DoCoMo was followed by China Mobile, KDDI, Verizon Wireless, AT&T, Sprint Nextel, China Unicom, Softbank, O2 UK, and T-Mobile USA to round up the top 10 operators by wireless data service revenues. It marks the first time, T-Mobile USA enters the top 10 list as it went past SK Telecom. All the top 10 carriers exceeded $1.5B in data revenues for the first half of 2008.
For the last couple of years, NTT DoCoMo has been the only carrier exceeding $10B in yearly mobile data revenues. In 2008, it is likely to be joined by China Mobile, KDDI, Verizon Wireless, and ATT in the exclusive 10B club.
Data revenues for the top 10 operators increased 10.3% from EOY 2007 and now account for almost 50% of the global mobile data revenues though their subscriber share is around 30%.
Most of the major operators around the world have double digit percentage contribution to their overall ARPU from data services. Operators like KDDI, DoCoMo, and Softbank are approaching 40%. 3 UK, O2 UK, Singtel, and 3 Sweden exceeded 30%.
In March, India edged past the US to become the number two wireless market (by subscriptions) in the world. In last two years alone it has added almost 175M new subscriptions (in comparison China added 169M and the US market added 39M).
ATT reported the highest increase in data ARPU from 2Q07 with 32% growth. Other notable percentage increases in ARPU were from KDDI, DoCoMo, Softbank Japan, 3 Australia, Vodafone Italy, Rogers, Verizon Wireless, and T-Mobile Austria. The biggest drop in percentage terms were registered by the Indian operators with average data ARPU dropping to $0.65.
In terms of absolute dollar amount, NTT DoCoMo and 3 UK lead the pack with $22 data ARPU. Operators who reported overall ARPU above $60 were 3 UK, Singtel, Rogers, and 3 Sweden.
The biggest jump in data revenues was experienced by the US carriers, the top 3 being ATT, Verizon Wireless, and T-Mobile USA respectively. SK Telecom, Sprint and O2 UK experienced declines. (For a complete US Market Update, please see our Q208 research note).
In 1H 2008, SMS’s vice like grip on data revenues continued to loosen a bit with many carriers seeing an increase in non-SMS data revenues. On an average, Japan and Korea have over 70-75% of their revenue coming from non-SMS data applications, US around 50-60%, and Western Europe around 20-40%.
NTT DoCoMo regained its position vis-à-vis KDDI w.r.t. mobile data revenues. Their data coordinates stand at ($22, 39.5%) and ($20.3, 37%) respectively (please see slide 10 for reference).
Most of the operators in developed nations are contemplating future strategies to boost data revenues such that decline in voice revenues is at least compensated for. There are very few operators who have experienced increase in overall ARPUs. Comparing the ARPU for last 2 years, amongst the top operators, only Singtel, Rogers, T-Mobile UK, O2 Germany, O2 UK, Verizon Wireless and ATT experienced increase in both overall and data ARPU.
NTT DoCoMo has been at the cutting edge of the mobile data evolution by creating new markets and exploring new technologies and social experiments ahead of almost anybody else in the market. We looked at the data revenue growth at NTT DoCoMo since the introduction of i-Mode almost 10 years ago (see slide on page 17). During the last 9 years, overall ARPU has declined 33% though data ARPU increased over 1800% and now accounts for almost 40% of DoCoMo’s service revenues. The voice ARPU has declined almost 60%. Our long history with the Japanese and Korean markets has taught us that while the individual strategies in each market will differ, one should study the trends and technologies in these markets to get a sense of what’s coming.
The biggest percentage contribution by data ARPU has been consistently registered (since mid 2002) by two Philippines carriers – Smart Communications and Globe Telecom with over 66% (or $3) contribution coming from the data services. Philippines is also one of the most active messaging nations where users average a message/hr round the clock.
Even though China reported approximately $7.8B in data revenues for 1H08 and the percentage contribution is over 27%, data ARPU is around $2.3. For India, data ARPU continues to stay below $1 for all major carriers with Reliance experiencing a 50c data ARPU during Q208.
China Mobile with 428M (as of Aug 08) remains the #1 carrier in terms of total number of subscrptions followed by Vodafone at 269M and China Unicom with 171M subscriptions. Telefonica, América Móvil, SingTel, Deutsche Telekom (T-Mobile), and Orange (France Telecom) are the next five largest telecom groups in the world. In terms of individual carriers in a given country, AT&T and Verizon Wireless occupy the #3 and #4 spot respectively ahead of NTT DoCoMo, which is at #5 (Verizon will overtake ATT after its Alltel acquisition goes through later this year). The two Chinese carriers round up the top two positions and are likely to stay perched at their lookout vistas for many years to come.
China Mobile remains the most valuable telecom operator with over $200B in market cap. It is followed by Vodafone at around $125B. 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.
As far as 3G is concerned, there were over 350M 3G users (69% of them are WCDMA users vs. EV-DO). Both Japan and Korea continue to expand their 3G base with both reporting over 80%+ penetration. 3G has picked-up steam in both western Europe and North America per our forecast in the 2005 cover story article “3G: Hitting the Mass Market” published in the Wireless World Magazine. Western Europe and US are at approx. 30% 3G penetration (Italy being the exception exceeding 40%).
China and India represent the biggest opportunities for the Infrastructure providers. China postponed its 3G decision again and couldn’t launch a network for the otherwise wildly successful 2008 Olympics. India is also going through its 3G spectrum policy and is likely to resolve some of the contentious issues shortly. Some of the biggest infrastructure contracts will come from these two countries that are looking to expand coverage into rural areas.
Carriers with nationwide 3G networks and good distribution of handsets are seeing strong uptick 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) is also gaining momentum. Networks are getting deployed and market is being seeded with some of the early handsets. For 4G, there is a strong momentum behind LTE, proponents of WiMAX are pushing the technology as a 4G candidate, and though it is starting to lose its time advantage, all eyes are on the imminent Clearwire launch.
In terms of applications, messaging accounts for the lion-share of data revenues. However, other services such as Mobile Music, Mobile TV and video streaming, Voice navigation, PNDs, Mobile Games, IMS, LBS, Mobile advertising, and others have also captured industry’s imagination. Alternate devices with wholesale cellular agreements are also flooding the market. In Japan, Mobile Commerce is expected to do much better than the other hot category - Mobile Advertising. 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.
1H 2008 saw the demise of the last standing next-generation MVNO in the US market - Helio, which got sold to Virgin Mobile at bargain basement prices. In Europe, Blyk continues to make good progress with its unique mobile advertising-based model. Asian market is also opening up for MVNOs.
Nokia eclipsed 100M/quarter unit sale in both the quarters thus far. It has sold over 237M handsets in 2008, more than the next three handset manufacturers combined. Nokia’s global market share edged past 41%. Samsung at 15%, Motorola with 9.5%, LG with 9.3% and Sony Ericsson with 8% rounded out the top five. For the year, the industry looks to again eclipse the 1 billion handset mark for 2008.
While the talk of “Open Access” and “Open Platform” consumed much of North America, it barely registered a decibel elsewhere. Several significant events including 700 MHz Auction, Android, and Verizon’s “Open Network” initiative elevated the consternation in the ecosystem. Apple launched its 3G iPhone while Android’s first device is slated to see the light of day next month courtesy of T-Mobile USA.
Apple launched its App-Store with iPhone 3G which has been quite successful though there is significant clutter to muddle through. The company is likely to announce soon that it eclipsed its 10M goal in Q308, a full quarter earlier than the stated target. These days, any new device that gets launched in the market is looked through the prism of iPhone.
In the last 10 years, the growth patterns in the mobile industry have completely reversed. In 1998, the developed world accounted for 76% of the subscriber base, in 2008; the percentages have flipped with developing world now accounting for 76% of the subscriber base and are likely to increase to 85% by 2018 (see slide 8). For a more detailed analysis, check out our research paper sponsored by The United Nations Foundation on “Mobile Services Evolution: 2008-2018.” It was presented at The Rockefeller Foundation Healthcare summit in Bellagio, Italy in July 08. (Note: The dichotomy between developed and developing nations is a very simplified concept that has been around for about 50 years. It is clear that a transformation in the distribution of wealth worldwide will change the picture in the next 10 years. Countries that are considered developing in today’s definition will become economic superpowers in 10 years and more dominant than some of the developed nations, even if they have not caught up then with some in terms of GDP per capita. However, for purely the purposes of comparison and illustration, we are using the existing definitions to discuss the shift in the mobile ecosystem).
Several operators reported Mobile Advertising as their key strategic focus for the coming quarters, esp. China Mobile and Vodafone. Sensing the opportunity to seek new sources of revenue stream, Nokia and Google are getting active in the space as well. 2007 saw tremendous M&A activity in both the online and mobile advertising space and while it slowed down during 2008, it is likely to pick-up again in 2009 as consolidation looms.
Wireless Broadband continues to be a significant growth driver for the industry. We partnered with our good friend Vern Fotheringham - a true industry entrepreneur and who has been behind many of the industry firsts, to write an exhaustive treatment of the subject in our upcoming book - Wireless Broadband: Conflict and Convergence being jointly published by IEEE Press and John Wiley (see below). Details forthcoming.

Your feedback is always welcome.

Thanks.

Chetan Sharma

Disclaimer: Some of the companies mentioned in this note are our clients.

older posts »

Always On Real-Time Access

Mobile Breakfast Series Event Roundup March 12, 2010

US Wireless Data Market Update: Q4 2009 and 2009 March 2, 2010

New Whitepaper: Mobile VoIP – Approaching the Tipping Point February 17, 2010

New Whitepaper: Role of Optical Wireless Broadband in the Evolving Mobile Ecosystem January 27, 2010

2010 Mobile Industry Predictions Survey January 3, 2010

New Whitepaper: The Untapped Mobile Data Opportunity December 16, 2009

Roundup of second Mobile Breakfast Series event – Mobile Broadband December 6, 2009

US Mobile Data Market Update Q3 2009 November 9, 2009

US Wireless Data Market Update - Q2 2009 August 8, 2009

New WhitePaper: Managing Growth and Profits in the Yottabyte Era July 14, 2009

TiECON Conference Roundup May 31, 2009

US Wireless Data Market Update - Q1 2009 May 11, 2009

Global Wireless Data Market Update - 2008 April 28, 2009

NAB recap - Open, Personalization, Advertising April 26, 2009

CTIA 2009 Roundup April 6, 2009

US Wireless Data Market Update Q408 and 2008 March 2, 2009

Mobile Industry Predictions 2009 January 1, 2009

Recap of "Tomorrow’s Wireless Future" November 20, 2008

US Wireless Data Market Update - Q3 2008 November 16, 2008

Global Wireless Data Market Update - 1H 2008 September 28, 2008

Recent Posts

Categories

Archive

Feeds

Always On Real-Time Access

Mobile Breakfast Series Event Roundup March 12, 2010

US Wireless Data Market Update: Q4 2009 and 2009 March 2, 2010

New Whitepaper: Mobile VoIP – Approaching the Tipping Point February 17, 2010

New Whitepaper: Role of Optical Wireless Broadband in the Evolving Mobile Ecosystem January 27, 2010

2010 Mobile Industry Predictions Survey January 3, 2010

New Whitepaper: The Untapped Mobile Data Opportunity December 16, 2009

Roundup of second Mobile Breakfast Series event – Mobile Broadband December 6, 2009

US Mobile Data Market Update Q3 2009 November 9, 2009

US Wireless Data Market Update - Q2 2009 August 8, 2009

New WhitePaper: Managing Growth and Profits in the Yottabyte Era July 14, 2009

TiECON Conference Roundup May 31, 2009

US Wireless Data Market Update - Q1 2009 May 11, 2009

Global Wireless Data Market Update - 2008 April 28, 2009

NAB recap - Open, Personalization, Advertising April 26, 2009

CTIA 2009 Roundup April 6, 2009

US Wireless Data Market Update Q408 and 2008 March 2, 2009

Mobile Industry Predictions 2009 January 1, 2009

Recap of "Tomorrow’s Wireless Future" November 20, 2008

US Wireless Data Market Update - Q3 2008 November 16, 2008

Global Wireless Data Market Update - 1H 2008 September 28, 2008

Recent Posts

Categories

Archive

Blogroll

Feeds