Data poised to rescue mobile

12 Feb 2007

Compared to their landline brethren, mobile network carriers have led a charmed existence during the last few years. Landline carriers are losing customers around the world to wireless providers, and wireless growth has surged in both developed and developing countries while landline customer growth has stalled or even dropped.

But the halcyon days for wireless carriers around the world are drawing to a rapid close. And 2007 will likely be the year this trend accelerates, causing many wireless carriers to face a mild panic, especially in developed countries. The expectation is that broadband wireless services will pick up a good deal of the slack as the carriers build more complex business models. But not soon enough for most operators.

The problem looming in wireless, first and foremost, traditional voice subscriber growth is thinning. It took 12 years for the GSM/W-CDMA global subscriber base to hit one billion. It took just 2.5 years to reach the second billion. And it will take just another year to reach the third billion, as the three-billion threshold will be breached by year's end. At the same time, wireless operators have gambled billions in new technologies such as 3G, HSDPA, WAP and mobile television. In most markets, these haven't caught fire (in some cases, in fact, they have flopped as revenue enhancers, although the jury is still out on mobile TV, which won't hit its stride until the end of this year).

In fact, a 2007 Telecommunications Industry Review report released by Insight Research Corp. shows that revenue from IP services represented a meager 0.9% of all global wireline and wireless revenue last year. That is projected to reach just 5.7% of the revenues forecasted for 2011. Even as the telecom industry ramps up to build the broadband networks that deliver new services, 'the overall revenue contribution from these new IP services is expected to be modest,' says Robert Rosenberg, Insight's president. 'Voice still rules, and will for some time to come.'
Maybe so, but the problem wireless carriers must resolve right now is that after years of torrid growth, new mobile voice subscription growth is declining, Even worse, the vast majority of mobile customers are using their phones primarily for voice calls, eschewing the new wave of data and multimedia services. The challenge for mobile providers is to quickly reverse that disappointing data trend and test new services and businesses on a skeptical customer base.
The mobile voice growth figures cause some industry executives and many industry analysts to flash red warning lights at mobile network operators. Gavin Patterson, principal analyst with Informa Telecom & Media, warns in a recent report that worldwide mobile subscriber growth has declined since 2001, a trend that will accelerate through the end of the decade. After rising 19.4% last year, growth will fall to 10% in 2008 and plummet to just 3% in 2011. However, to be fair, Patterson's report also notes that dual-SIM and multi-SIM ownership is growing in some parts of the world. In fact, he says, about 22.5% of all mobile subscriptions worldwide result from dual/multi-SIM ownership and this figure will rise through 2011. But will that be enough to compensate for a saturated market‾ Highly doubtful.

Penetration grows

Martin Garner, director of wireless intelligence for research firm Ovum, says the majority of the world's mobile growth will continue to come from the Asia-Pacific region, although the fastest growth rate will shift from China to India, Pakistan and Bangladesh.

Related content

Follow Telecom Asia Sport!
No Comments Yet! Be the first to share what you think!
This website uses cookies
This provides customers with a personalized experience and increases the efficiency of visiting the site, allowing us to provide the most efficient service. By using the website and accepting the terms of the policy, you consent to the use of cookies in accordance with the terms of this policy.