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| Photo credit: AFP/Imaginechina |
Leading 3G markets
Mobile broadband subscriptions reached an estimated
640 million at the end of 2009, driven by growing
demand for smartphones, new applications and social
networking services, and are set to exceed 1 billion
this year, according to ITU statistics. By the end
of 2009, some 130 countries enjoyed commercial
3G service (Figure 1). Asia-Pacific and Europe have
fuelled most of the early growth in mobile broadband
subscribers, with five out of the ten largest markets
located in Europe, but recently, the Arab States and
some economies in the Americas have seen soaring
growth rates.
Japan and the United States remain the two largest
individual markets for 3G. However, in Japan, 3G
is fast approaching maturity with a penetration rate
of 85 per cent in 2009, whereas the United States
market still has room to grow. Based on its larger
population base, the United States is forecast to
overtake Japan in terms of total subscribers in 2011.
Luxembourg is another high-ranking country in terms
of 3G per capita penetration, with nearly 90 per cent
of the population having a 3G phone. The Republic
of Korea ranks high both in terms of absolute size
as the third-largest 3G market and penetration. The
highest ranking African country in terms of 3G penetration
is South Africa.
However, the market to watch is undoubtedly
China, which launched 3G services in 2009. All three
main cellular 3G technology standards are now in
commercial use in China. The largest mobile operator,
China Mobile, has retained its GSM customer
base and was awarded a licence for TD-SCDMA in
January 2009. China Unicom was awarded a licence
for 3G based on the W-CDMA (UMTS) standard. And
China Telecom was awarded a licence for 3G using
the CDMA2000 1x EV-DO standard in January 2009.
With all three main standards in intense competition
to satisfy consumers and meet government roll-out
targets, China is forecast to take the number one slot
for largest subscriber market by 2014, if not sooner.
India has yet to see the widespread launch of 3G
services. The Government has postponed its 3G and
WiMAX auctions, which are set to take place in April
2010. After the 3G and WiMAX transactions have
taken place, the Department of Telecommunications
and the Telecom Regulatory Authority of India are
considering further auctions to support 4G services
of the digital dividend spectrum around 700 MHz,
which India plans to bring into play. The 2.5 GHz
band will be allocated after the 3G frequencies, and
will be used almost entirely for WiMAX, making
700 MHz a promising band for Long-Term Evolution
(LTE) suppliers to target in the near term.
| Figure 1 — Global growth of countries with 3G commercial
services |
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| Source: ITU |
4G Long-Term Evolution
The first commercial launch of LTE took place
in Europe in December 2009, when TeliaSonera
launched commercial LTE services to customers in
Stockholm (Sweden) and Oslo (Norway), with two
pioneering city networks. The Stockholm city network
is supplied by Ericsson, while the Oslo city
network is supplied by Huawei. The USB modems
are from Samsung, based on its LTE chip (Kalmia),
and support the 2.6 GHz band. Ericsson is advertising
maximum speeds of 100 Mbit/s download and
50 Mbit/s upload. TeliaSonera has three nationwide
LTE licences, for Sweden, Norway and Finland, and
evaluation of suppliers for TeliaSonera's next-generation
common core network and radio networks is
currently under way. Vodafone plans to launch LTE
services in Europe in 2012, but a number of operators
are already trialling LTE in various countries, including
Australia (Telstra), Belgium (Telenet), Estonia
(EMT), Jordan (Zain) and Saudi Arabia (Zain), Slovak
Republic (Telefonica), and the Ukraine (MTS). In the
United States, Verizon aims to roll out LTE to cover
100 million users by the end of 2010, mostly in urban
areas, with relatively high speeds. In Singapore,
SingTel's mobile broadband network is being steadily
upgraded over the next 12–24 months for LTE.
LTE was a major theme at the GSMA Mobile
World Congress 2010 in Barcelona, Spain, where a
number of new user devices supporting LTE were announced
or demonstrated. Over twenty LTE networks
are planned to enter commercial service by the end
of 2010. Congestion resulting from high demand for
bandwidth and the high speeds available may lead
operators to return to usage-based pricing.
It’s all about speed
Are speeds still too slow to support widespread
take-up? And if so, what needs to be done? Based
on the experience of early adopters in Japan and the
Republic of Korea, what are the most suitable speeds
to encourage mass market adoption? Mobile operators
bringing these new technologies to market are
engaged in several trade-offs, seeking to strike a balance
between various needs:
The needs of targeted user groups: for example,
in the highest speeds possible for technological leaders
and adopters (for instance, those keen to own the
latest handset or download lots of video), or for the
business/corporate segment, versus lower speeds for
the mass market. For navigation or location-based
services and mobile VoIP, which require the exchange
of real-time information, minimum speeds of at least
2.4 Mbit/s are necessary. Performance requirements: technical performance
(higher speed) versus network reliability (to
avoid spotty coverage or network downtime). The
introduction of smartphones and iPhones — initially
often under exclusivity contracts with a single operator
— backfired in some countries, as it put some
operators’ networks under strain, leaving them to
struggle to meet surging demand for services. Coverage requirements: urban coverage with
high-speed networks versus greater geographical
coverage (depending on the technology and specific
geographical factors, greater coverage is not always
achieved, at the expense of speed).
The speed acceptable to the mass market depends
on the usage desired by the majority of consumers,
which is often influenced by operators’
marketing strategies. In general, however, a mobile
broadband speed of 43 Mbit/s is likely to prove sufficient for most mobile broadband use, as it enables
customers to download an MP3 file of 5 megabytes
in under a second, a video clip of 35 megabytes in
under six seconds and a movie of 800 megabytes in
around two minutes.
What is driving mobile broadband?
New devices
New devices are transforming the mobile broadband
market by bringing mobile devices closer to
personal computers in functionality, capabilities, feel
and access. There is, however, no single killer application
driving mobile broadband, where strength may
lie in diversity and the ability to deliver personalized
services and entertainment.
The Apple iPhone is widely acknowledged to be
a game-changing device in many ways. Its strength
lies in its vast range of applications and even the potential
for users to develop applications of their own.
Apple announced in January 2010 that more than
3 billion mobile applications had been downloaded
from its App Store by iPhone and iPod users worldwide,
in the 18 months since its launch.
The iPod and iTunes have made listening to music
easier. The iPhone combines a phone with a music
player and a digital camera with a digital library and
photo album in a single device with access to the
World Wide Web. This iPhone is among the first popular,
fully-converged devices. For some, it has made
use of the mobile web easy and user-friendly. For
others, it has become a must-have fashion accessory.
The Apple iPad, launched at the end of January
2010, can combine the portability of an e-book reader
with all the visual excitement of artwork and the
real-time response and immediacy of a website. It
looks set to fuel a greater interest in content, uniting
the entertainment and publishing worlds as readers
can access additional tagged content to supplement
and enrich any simple story.
Meanwhile, Samsung Electronics Co. Ltd has announced
the launch of its Samsung Wave. This is
the first mobile handset to be released on the company’s
new, open mobile platform called Samsung
bada. The platform allows mobile users to download
applications from Samsung Apps, an integrated application
store. It features games, navigation, social
networking, e-book, health and lifestyle applications.
The new smartphone (Samsung Wave) is expected to
be available globally from April 2010.
Location-based services
Location-based services are another area where
many research consultancies are projecting stellar
growth. However, such growth depends partly on
user education and partly on how these applications
are marketed. Some operators and equipment manufacturers
perceive location-based services as giving
them a strategic advantage over their competitors.
Nokia, for example, is planning to give maps and
navigation software away free to its smart-phone
customers. The content comes from digital maps
maker Navteq, which Nokia acquired in 2007 with a
view to enhancing its location-based service offering.
Combining the maps and navigation with the camera
and GPS on the phone opens up a whole new range
of applications, including augmented reality and location-
based services, while bringing new advertising
income within reach. Nokia is using a similar strategy
to that announced by Google in October 2009
for Google Maps. Google gives applications such as
this away free in order to place more advertising, and
Nokia is hoping that a similar strategy will help drive
sales of its smartphones. Such a strategy can work
well, but amounts to a bet on future growth in revenue
from devices against giving away content for
free – a gamble in an industry where content is king.
Social networks
Social networks and networking applications are
also likely to prove vitally important in driving the future
mobile broadband Internet, although estimates
of the “unique” number of users of social media
vary considerably (users often access more than one
service regularly). For example, for December 2009,
Morgan Stanley estimated that there were 830 million
unique users of social media, while Nielsen put the
number lower, at around 430 million. This is probably
a representative margin of error, given the difficulties
of definition and measurement (different networking
services often overlap, and distinguishing individual
users is virtually impossible).
Strong growth is inevitable, however, based on
the rise of the social web. Users of social media were
predicted to go from just 16 per cent to as much
as 47 per cent of global Internet users in 2009
(Figure 2). Global time spent on social media sites
grew by 82 per cent between 2008 and 2009, led
by Facebook and Twitter usage. There are now more
than fifty million tweets a day, based on an exponential
growth curve. Applications such as Facebook
Connect are finding more widespread use outside of
their original use. Services such as Layar, which provide
augmented reality, are likely to gain in popularity
in 2010.
In summary, mobile broadband is here to stay.
How operators will cope with the exponential growth
in subscriber base and demand for services is another
story and one we shall continue to monitor.
| Figure 2 — Social media users as a proportion of
fixed Internet users |
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| Source: ITU. Estimates of social media users adapted from
Nielsen and Morgan Stanley. |
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