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Worldwide Wireless Data Trends - Mid
Year Update 2006 |
Download PPT (1.3MB)
Download white paper - Worldwide
Wireless Data Trends (doc, 320 kb)
This note summarizes the wireless data
trends in over 40 countries and a detailed look at over 30 prominent
operators.
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Wireless industry crossed several milestones this
past 6 months - 2 billion GSM subscribers and is on its way to the
quickest billion subscribers within the next 2 years. 100M 3G
subscribers with 66% coming from WCDMA (40% of these from Japan) and
rest from EV-DO.
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Japan led the way with approximately $10B in wireless
data service revenues for the first half of 2006. US and China
followed with approximately $7B and $5.5B respectively.
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The #1 carrier worldwide in terms of total wireless
data revenues for the first six months of 2006 is NTT DoCoMo with
over $5.1B in data revenues. It was followed by China Mobile
($3.9B), KDDI ($3.3B), Verizon Wireless ($1.9B), and Cingular
Wireless ($1.9B). Sprint Nextel, O2 UK, Vodafone Japan, SK Telecom,
and China Unicom filled the rest of the top 10 slots respectively.
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China crossed the 400M subscriber mark and is on its
way to cross the half billion subscriber mark in 2007. As first
discussed in our “India’s
Wireless Market” report, India is rivaling China’s monthly net
adds of 5M/month and crossed the 100M subscriber mark making it the
fourth largest subscriber base after China, US, and Russia. India
will cross Russia later this year and the US by 2008 to become the
second largest wireless market.
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Western Europe officially crossed the 100% wireless
subscriber penetration mark (due to multiple SIMs) with several
nations reporting up to 115-120% subscriber penetration. In spite of
crossing 70% penetration mark, US wireless market shows no sign of
slowing down and is strongly progressing towards another record year
with over 25M net adds in 2006.
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In terms of total subscribers, China Mobile with 274M
subscribers is way ahead of the second ranked Vodafone, which has
187M subscribers. China Unicom, América Móvil,
Telefonica, SingTel, Deutsche Telekom (T-Mobile), and Orange (France
Telecom) are the next six largest telecom groups in the world. In
terms of individual carriers, Cingular and Verizon now occupy the #3
and #4 spot respectively ahead of NTT DoCoMo, which is at #5. The
two Chinese carriers round up the top two positions and are likely
to stay perched at their lookout vistas for some years to come.
Telecom groups in mature markets are under enormous pressure to
either come up with a global expansion strategy or accelerate their
existing plans. Carriers in Japan and Korea are the most under
duress.
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Japan became the first nation to have more than 50%
of its subscribers using 3G. Korea is close second. 3G is starting
to pick-up steam in both western Europe and North America as
discussed in our cover story article “3G: Hitting the Mass Market”
published in
Moconews.net and
Wireless World Magazine. Since then, we have presented our
research at
IEEE,
CINA,
EMC, Carriers in US; in Japan, Korea, and
Russia; and later this year in India.
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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 is having technical and political
problems to get something in place before the 2008 Olympics. India
is going through its 3G spectrum policy but unlike China is likely
to resolve the issues in short order. Ericsson just scored a $1B
contract with Bharti. BSNL’s tender is worth 2-3 times more.
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In terms of data ARPU, Japan continues to lead the
pack with 28% of its revenues coming from data services amounting to
almost $17 data ARPU. Ireland, Norway, Switzerland, UK and South
Korea also registered significant data ARPU. US crossed the ($5,
10%) block, where $5 is the data ARPU and 10% represents the % share
of overall ARPU. As of June 2006, US stood at ($6.3, 12%). For
detailed US Wireless Market update, please see "US
Wireless Data Market - Mid Year Update 2006" (For more
details, please refer to the 9-box diagram in the
ppt or the 2006 paper – “Worldwide
Wireless Data Trends”; for 2005 comparative numbers,
please refer to our paper from last year titled “Perspectives:
Wireless Data ARPU”)
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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 which surged past DoCoMo for two straight quarters.
Their data coordinates respectively stand at ($17.3, 28.9%) and
($16.5, 28%). However, it is 3 UK that is inching towards ($20, 30%)
mark with $19.3 data ARPU contributing over 25% to its overall ARPU.
3 Italy with ($15.6, 34%) is also amongst the leaders.
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The biggest % contribution by data ARPU has been
consistently registered (since mid 2002) by the two Philippines
carriers – Smart Communications and Globe Telecom with almost 50%
(or $3) contribution coming from data services.
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Even though China reported approximately $5.5B in
data revenues, and the % contribution is over 20%, data ARPU is
around $2, confirming what we already know – it’s a volume game. For
India data ARPU is just over $1.2. Approximately same for Brazil and
Russia. Actually, in 2005 the overall wireless service revenues in
US were two times the overall revenues of the four BRIC (Brazil,
Russia, India, and China) countries combined. So, lessons are pretty
clear as to which markets to approach for what products and
services.
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We will have to look at the EOY 2006 numbers but
there are some indications of cooling down of data ARPU growth in
mature markets of Japan, Korea, and UK. So, while % contribution
will increase due to declining voice revenues, data ARPU will not
make up for the loss. Most of the mature markets face the same
dilemma. In fact, comparing EOY 2005 to 2004 numbers, only a handful
nations registered positive increase in overall ARPU with Canada
($3), Korea ($3), Mexico ($1), Taiwan ($1), Brazil ($1), and Chile
($1) showing an increase. For majority of the other nations, the
ARPU declined, for example by $2 for US, Thailand, India, Australia,
and Argentina. Nigeria recorded a massive $23 decline.
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All the carriers in the top 10 wireless carriers by
wireless data revenues list exceeded $1B in data revenues for the
first six months of 2006. China Mobile and China Unicom benefited
from their huge subscriber base of 274M and 135M respectively while
DoCoMo and KDDI did well because they are generating over $17 (or
28%) in wireless data ARPU.
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Carriers with nationwide 3G networks and good
distribution of handsets are seeing up tick in data ARPU. The
Japanese and Korean carriers along with operator 3, Verizon, Sprint
Nextel are all seeing benefits of rolling out their 3G service.
Deployment of 3.5G technologies such as HSDPA and EV-DO Rev A (and
B) are also gaining momentum. Networks are getting deployed and
market is being seeded with some of the early handsets.
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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, 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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In Japan and Korea, consumer messaging revenue only
accounts for 30% of the data revenues, rest is from multimedia
applications, browser traffic, and other infotainment applications.
It is almost the reverse in Europe with 70-80% (on average) of the
data revenue is coming from messaging. There are some exceptions
like Vodafone Spain, Telefonica Moviles Espana, and Eurotel, who
have over 40% of their data revenues coming from non-messaging
applications. For North America, the data revenue from non-messaging
applications (excluding transport) is around 20%.
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China Mobile is challenging Vodafone’s supremacy as
most valued telecom operator. For a brief period in August, it was
valued higher than Vodafone and is likely to overtake the crown as
China continues to add significant number of subscribers while
Vodafone struggles.
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WiMax is gaining some traction both in the developed
and developing world. However, the case for mobile WiMax is still
quite questionable. By the time the embedded devices come to
fruition, 3G devices will be quite pervasive and the WiMax services
will not be able to compete on price alone. And, a sub $30 WiMax
handset for the developing world is nothing short of a pipe dream at
this point. WiMax for backhaul makes sense, and some niche scenarios
for fixed wireless services will also be successful, but clearly, we
will not be witnessing replacement of cellular anytime soon. Free
Wi-Fi movement scored more deployments around the world though the
business model to support them long-term stays unproven.
Your
comments are always welcome.
See you at
CTIA.
Chetan Sharma
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September 2006 |
July 2006 |
June 2006 |
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News |
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Chetan joined the editorial team of
the prestigious
Wireless World Magazine
(published out of Singapore) as a contributing analyst. |
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Upcoming
Events |
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Sept 11th - MEF, Los Angeles
(Chetan Sharma Consulting is
a research partner) |
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Sept 12-14th - CTIA Wireless IT & Entertainment 2006,
Los Angeles
(Meeting Request) |
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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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© Chetan Sharma Consulting 2006. All
Rights Reserved. |
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