While the mobile bandwagon will keep on rolling, with the usual hype and continued gap with reality, 2007 looks to see major growth in a few services that have long been on the horizon - FMC, managed services mid-band Ethernet
In the 100 years following the invention of the telephone by Alexander Graham Bell, virtually the only technical advance was Armond Strowger's selector switch. Then in the late 1970s, driven largely by deregulation, the telecoms scene exploded with new developments coming along in swift succession - computerized exchanges, fibre-optic cable, mobile phones - the list goes on.
So what's on the horizon for 2007‾ While dozens of technologies and apps will surely dominate the headlines, in the year ahead Telecom Asia expects some of the same momentum - specifically continued hype over the usual mobile technologies, but slow progress making it a reality - as well as few surprises: a big transition to FMC, managed services becoming more a strategy of choice and mid-band Ethernet beginning to hit its commercial stride.
Mobile bandwagon keeps on rolling
Enthusiasm for the new, particularly novel technologies, has always been the hallmark of the mobile industry. Basically the industry doesn't do pessimism. Occasionally this causes problems - remember WAP‾ And the early hype about GPRS and 3G‾ On the whole, however, the mobile industry has a lot to crow about. Building up a subscriber base comprising half the people on the planet in less than 20 years is a noteworthy achievement. But there remains that fatal addiction to hype, which no setback ever seems to dampen.
What is absolutely certain is that the global GSM/W-CDMA subscriber base, currently standing at 2.6 billion will reach the three-billion mark in the first six months of 2007. Given that it took 12 years to reach the first billion, subsequent progress has been amazing. The second billion came in two and a half years, and the third billion looks like being achieved in around 12 months. However, as Gavin Patterson, principal analyst with Informa Telecom & Media, warned: the days of double-digit growth are coming to and end. Growth figures have been in decline since 2001 although 2006 still saw a rise of 19.4% but this will fall to 10% in 2008 and to around 3% in 2011.
Care should be taken however, as the figures so proudly trumpeted by the industry are headline numbers. As dual-SIM and multi-SIM ownership grows, the headline number becomes unreliable. According to Patterson, 22.41% of all subscriptions worldwide are a result of dual/multi-SIM ownership, and this figure will rise steadily through to 2011. One effect of this, says the report, is that in a market with a high level of multiple SIM ownership, the relevance of ARPU is compromised as it refers to average revenue per subscription and not average revenue per user. So ARPU becomes diluted as users split their mobile spend across several subscriptions.
As voice revenues began to decline, operators had high hopes that the gap would be filled by ever-increasing use of non-voice services, driven by the introduction of mobile data in the form of GPRS and 3G. To date this has not happened. Although take-up of 3G, after a shaky start, is starting to accelerate (81 million subscribers on 134 networks in 59 countries) it seems that the majority of 3G customers are using their phones for voice calls rather than data or multimedia services.