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Global Wireless Data Market
Update 2007 Update
Download PDF (2.3 MB)
Download PPT (1.3 MB)
http://www.chetansharma.com/globalmarketupdate2007.htm
As you read this End of Year (EOY) 2007 Global Wireless Data Market
update this week, somewhere in India, a new subscription will catapult
India over the US as the number 2 global wireless market. 2007 was a
banner year for global wireless data market. The global service revenues
for the year touched $700 billion, the data service revenues were more
than $120 billion, China signed its 500 millionth subscription, and both
India (in feb 08) and the US crossed the 250 million subscription mark.
2007 continued to enhance mobile data’s role in the operator ecosystem
with approx 17% of the revenue is coming from data services.
For some leading operators, data is now contributing up to 35% of the
revenues however increase in data ARPU is not completely offsetting the
drop in voice ARPU. From the true and tested SMS messaging to new
services such as Mobile TV, Enterprise apps, and others, different
services helped in adding billions to the revenues generated for 2007.
Japan and Korea remain the envy of the global markets and the countries
to study and learn from w.r.t. new services and applications. The US
market has been steadily making strong comeback and for the first time
exceeded Japan in service revenue generated from mobile data.
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.
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The worldwide markets continue to grow at an explosive pace reaching
3.3B subscriptions by Q407 up 20% from 2006 levels. Significant
growth is coming from India and China with both countries
registering close to 8-9M net adds per month. India recorded 8.8M
net adds in Jan 08 while China added 9.4M in Feb 08. Overall, the
world market is at almost 50% penetration.
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US surpassed Japan as the most valuable mobile data market in
service revenue with US adding $24.5B vs. $23.2B for Japan in 2007
mobile data service revenues. China with $12.5B was ranked number 3.
US registered the highest growth amongst the top 3 with over 55%
increase from 2006 levels followed by China at 37% and Japan at 18%.
These top 3 markets account for over 50% of the global data service
revenues.
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NTT DoCoMo continues to dominate the wireless data service revenues
rankings with over $12.13B in service data revenues for 2007 however
Q/Q growth has dropped to single digits. DoCoMo crossed 80% in 3G
penetration and is expected to touch 90% by end of the year.
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DoCoMo was followed by China Mobile, KDDI, Verizon Wireless, AT&T,
Sprint Nextel, O2 UK, SK Telecom, Softbank, and China Unicom to
round up the top 10 operators by wireless data service revenues. All
the top 10 carriers exceeded $3B in data revenues for the year.
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Most of the major operators around the world have double digit
percentage contribution to their overall ARPU from data services.
Operators like KDDI, DoCoMo, 3 Italy, 3 UK, and O2 UK are topping
30%.
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Both India and China added a whopping 85 million new subscriptions
(most of them prepaid). This week India edges past US to become the
number 2 wireless market (by subscriptions) in the world. In last
two years alone it added almost 150 million new subscriptions (in
comparison China added 155 million and the US market added 44
million).
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Vodafone Italy reported the highest increase in data ARPU from 4Q06
with 76% growth. Other notable percentage increases in ARPU were
from Rogers, AT&T, Verizon Wireless, Sprint, and T-Mobile Austria.
The biggest drop in percentage terms were registered by the Indian
operators with average data ARPU dropping to $0.70.
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In terms of absolute dollar amount, 3 UK leads the pack with $29
data ARPU (qualifying limit: 4 million subs). By comparison, the
rest of the top 4 operators are below $22. In fact, 3 UK reported
the highest ARPU recorded for the year at approximately $94 (in Q2).
Other operators who reported overall ARPU above $60 were KDDI, NTT
DoCoMo, Rogers, and 3 Sweden.
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The biggest jump in data revenues was experienced by Verizon
Wireless with over 68% increase from 2006 followed by AT&T with 63%
jump and O2 UK making 49% gain.
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In 2007, 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%.
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The top 10 operators increased their revenue by 32% during 2007
(from 2006) to reach almost $62 billion in data service revenues,
thus accounting for almost half of the global data service revenues
though they account for only 27% of the global subscription base.
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NTT DoCoMo’s position at the top of the wireless data world has been
challenged recently by several carriers esp. by its archrival KDDI.
Their data coordinates stand at ($21.5, 35%) and ($21, 34%)
respectively (please see PowerPoint for reference). Since the
takeover from Vodafone, Softbank has been making significant strides
in the market by taking the highest share of the net-adds in last 9
months.
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The biggest percentage contribution by data ARPU has been
consistently registered (since mid 2002) by two Philippines carriers
– Smart Communications and Globe Telecom with almost 55% (or $4)
contribution coming from data services.
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Even though China reported approximately $12.5B in data revenues for
2007 and the percentage contribution is over 23%, data ARPU is
around $2.3. For India data ARPU dropped below $1 for all major
carriers.
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China Mobile with 369M (as of Dec 07, the numbers increased to 384M
by Feb 08) remains the #1 carrier in terms of total number of
subscribers followed by Vodafone at 252M and China Unicom with 160M
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. 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
also surpassed Vodafone in market cap which stands at $288B (vs.
$164B for Vodafone). 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.
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As far as 3G is concerned, GSA reported 293 WCDMA commercial
launches worldwide with over 270M 3G users (66% of them are WCDMA
users vs. EV-DO). Both Japan and Korea continue to expand their 3G
base with both reporting over 75-80% 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 approximately at 25% 3G penetration (Italy
being the exception reaching 40%).
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China and India represent the biggest opportunities for
Infrastructure providers. China has postponed its 3G decision for
the umpteenth time and has been having technical and political
problems to get something in place before the 2008 Olympics. India
is going through its 3G spectrum policy but unlike China is likely
to resolve the issues in short order. Some of the biggest
infrastructure contracts will come from these two countries that are
looking to expand coverage into rural areas. In India, regulators
are considering inviting bids for the 3G spectrum from foreign
entities as well.
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Carriers with nationwide 3G networks and good distribution of
handsets are seeing 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) are also gaining
momentum. Networks are getting deployed and market is being seeded
with some of the early handsets. In terms of 4G, there is a strong
momentum behind LTE, UMB is practically dead, and proponents of
WiMAX are pushing the technology as a 4G candidate, though it is
starting to lose its time advantage.
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In terms of applications, messaging accounts for 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 captured industry’s imagination.
Though not much talked about, enterprise applications are also being
adopted widely esp. in North America as more workers become mobile
and corporations seek efficiencies in their operations and
supply-chain.
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2007 also saw the demise of some high-profile MVNOs like Amp’D.
Helio continues to struggle while the newer ones like Sonopia and
Blyk are testing the treacherous waters with different business
models. Asian market is also opening up for MVNOs.
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Nokia eclipsed 100M/quarter unit sale three times in 2007. It sold
over 437M handsets in 2007, more than the next three handset
manufacturers combined. Nokia’s global market share stood at 40.2%.
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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.
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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
launched its ad service as well. 2007 saw tremendous M&A activity in
both the online and mobile advertising space. In a matter of weeks,
several billion dollar transactions took place highlighting the
intensity in preparing for the next battleground. The estimated
market for mobile advertising in 2007 was approximately $2.3B with
messaging, search, and browsing accounting for over 84% of the
revenues.
Your feedback
is always welcome.
Chetan Sharma
Disclosure: Some of the companies mentioned in this note are our
clients. |
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Recent
Publications/Media Interviews/Mentions |
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Wall Street Journal |
Mobile Advertising |
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CTIA Wireless Wave |
Mobile Advertising |
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BrandWeek |
Mobile Advertising |
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Strategic News
Service |
Mobile Advertising: from cautious
optimism to contextual nirvana |
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MSearchGroove |
Podcast: Mobile Advertising Book Discussion |
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WIRED |
Android |
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Business Week |
A Warm Welcome to Android |
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GigaOM |
What can
Operators learn from Politics? |
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GigaOM |
The Operators vs. The Media
Brands |
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NPR |
US a late adopter
of Smartphones |
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The Seattle Times |
Tech panel recaps what was cool, not
so cool in 2007 |
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The New York Times |
Google Enters the Wireless World |
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Bloomberg News |
US Mobile Advertising Market |
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Whitepaper |
What is your Patent Portfolio Quotient (PPQ)? |
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Upcoming
Events |
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27 March |
Washington
Technology, Seattle, Mobile Mania, Where's the
Money? Chetan will moderating the
panel discussion |
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1 - 3 April |
CTIA, Las Vegas
Chetan will be facilitating a developer session at
Mobile Jam Session |
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24 April |
Stanford University,
Mobile Advertising. Chetan will be giving a talk to
Prof. Tom Kosnik's
MBA class |
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24 April |
Techcoire,
Sacramento, Mobile Advertising: A $20B Opportunity? |
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10 May |
CalTech/MIT Enterprise
Forum, Pasadena, Chetan will be giving the keynote
on Mobile Advertising |
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13 May |
NYSE, NY, Chetan will
be giving a talk on Mobile Advertising to Advertising
Industry Executives |
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20 May |
CommNexus, San Diego, Mobile Advertising Book
Event and Panel |
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20-23 May |
Future In Review, San Diego, Mobile
Advertising: From Buzz to Biz |
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26-27 Jun |
Global Wireless Security Conference,
Kuala Lumpur. Chetan will be giving a talk to leading CTOs and
CIOs on Mobile Security trends and opportunities |
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Sept |
Seattle Mobility Conference |
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Recent
Events |
Chetan moderated two
recent panels on Mobile Advertising - Stanford
University and TiE Seattle. Click on the link to get the
discussion summary. |
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In addition, Chetan will be doing some
private briefings to carriers, content providers and enterprise
solution providers |
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Upcoming
Research |
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April |
CTIA Roundup |
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April |
Mobile Caller ID: Lessons in
Simplicity, Utility, and Convenience |
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May |
Inside
the USPTO: Maximizing your chances of securing the
patent |
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May |
Enterprise Mobile Product Strategy
Using Scenario Planning |
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© Chetan Sharma Consulting 2008. All
Rights Reserved. |
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Chetan Sharma Consulting is a
consulting and advisory firm helping companies in the mobile and
voice communications sector. Our expertise is in developing
innovation-driven product, marketing, and IP strategy. We've
helped companies like NTT DoCoMo, China Mobile, Samsung, KDDI, Alcatel-Lucent, Sony, Virgin
Mobile, KTF, Sprint Nextel, Reuters,
Disney, Qualcomm, Infospace, Reliance, BEA, HP, Merrill Lynch,
Cincinnati Bell, Bain, SAP, Vulcan, American Express, and many
others. What can we do for you?
www.chetansharma.com |
If you have questions or
suggestions or feedback on this subject or on the wireless & mobile industry at large,
please contact us at
feedback@chetansharma.com - we look forward to hearing from
you.
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