Global Wireless Data Market Update-2008

21 06 2009

Here I am writing an Executive Summary of Global Wireless Data Market in year 2008.

  • Global Wireless market continued to grow rapidly especially in India & China where carriers are adding (together)more than 20M subscribers  every month.
  • During Q1-09 India cross subscriber mark of 400M while China crossed 650M.
  • Globally now, more than 60% people hold mobile connection.
  • Overall global mobile revenues (including equipment) for the year reached the 1 Trillion dollar landmark in 2008, with over $830 billion attributed to services revenues. Data revenues now account for over 20% of the global service revenues.
  • For some operators data revenues are contributing close to 40% of overall revenues, but still increase in data ARPU isn’t offsetting the drop in voice ARPU.
  • From SMS, Mobile advertising, Social networking, Commerce, Mobile Wallet etc have added revenues in 2008.

Service Revenue:

  • US extended its lead over Japan as the most valuable mobile data market in service revenue with US adding $34B vs. $29B for Japan in 2008. China with $15.8B was ranked number 3.
  • The top 10 nations by service revenues are: US, China, Japan, UK, France, Italy, India, Germany, Spain, and Russia.
  • The top 10 nations by data service revenues are: US, Japan, China, UK, Italy, Germany, France, Spain, Australia, and Korea (India is missing!)
  • China reported approximately $16B in data revenues for 2008 and the percentage contribution is around 27%, data ARPU is around $2. For India, data ARPU continues to stay around $0.50 as most of the new adds are voice only subscribers and there is continued price pressure in the market.

ARPU

  • Most of the major operators around the world have double digit percentage contribution to their overall ARPU from data services. Operators like DoCoMo, and Softbank are over 42%. KDDI, 3 Australia, 3 Italy, 3 UK, O2 UK, Singtel, and 3 Sweden exceeded 30%.

 

Rank By Subs By Data Revenue By Service Revenue
1 China US US
2 India Japan China
3 US China Japan
4 Russia UK UK
5 Brazil Italy France
6 Indonesia Germany Italy
7 Japan France India
8 Germany Spain Germany
9 Italy Australia Spain
10 Pakistan Korea Russia

 

Subscriptions

  • China and India continued their red-hot growth throughout 2008. Combined, they added 212.8M new subscriptions with India edging China by 15% for the first time in yearly net-adds.
  • In March, India edged past the US to become the number two wireless market (by subscriptions) in the world. In the last two years alone it has added almost 175M new subscriptions (in comparison China added 169M and the US market added 39M). For the past 7 months, India has been displaying Phelpsesque like flair in setting and beating its world record for 6 times, twice exceeding 15M/month net-add. For the last 7 months, the market has been exceeding 10M net-adds/month with Mar 09 being at a whopping 15.6M making it a record for monthly net-adds in a given country at anytime in the history of the industry or any industry for that matter (breaking its previous record set in Jan09).
  • The top 10 nations by subscriptions are: China, India, US, Russia, Brazil, Indonesia, Japan, Germany, Japan, and Pakistan.

 

 

 

For complete report visit: http://chetansharma.com

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Telecom Flat World?

19 06 2009

Earlier when I posted a blog “Go Global Telecom..!” I had a perspective in my writings. If you said world is flat, then you shouldn’t have missed this simple fact. By flat world, I simply mean ignoring Asia-Pacific or emerging markets could be fatal in future! Whosoever you are! Ok! Let me justify the same.

Recent research report by Telegeography paints bleak future for some of the world’s mighty telecom giants. Perhaps, the rise of Huawei & ZTE symbolizes the fact that, emerging economies will be hosting the center stage of world telecom developments in coming years. The report shows the sharp declines in the revenue & growth for mighty ten. Look at the stats below.

These ten saw the quarterly revenue decline by 4% y-o-y(in local currencies), with Sprint-Nextel posting 12% drop. One prominent reason for the decline; almost all of these companies have focused on developed markets only, which are already saturated. Or in other words none of them operates in India or China. These stats are exactly opposite to those of China Mobile, Vodafone, America Movil, China Unicom etc where all these companies reported Q1-09 revenues at least 10% more than Q1-08.

Voda has benefited by stronger growth report card in India. While other Indian telecom giant Bharti Airtel is looking for consolidation with South African MTN, we could only see the telecom revolution (revenue market) is turning away from developed world to developing world. Indeed this is the most vivid proof that World is Flat! Isn’t it?

(For further details check: www.telegeography.com/products/gcomms_insight/index.php )





Telecom Differentiation & Smart-Phones War!

16 06 2009

In today’s Times of India, I got to see one aspect of differentiation by leading telecom operator, Aircel in Delhi-NCR. Through this blog I often insisted that differentiating your services from other service providers is the key & a real challenge too. Talking about innovation is one thing, implementing it is another.
             Aircel’s recent data recharge plans are something different on offer.  There is hardly any differentiation among all players in terms of Voice/SMS tariff plans. Only room is to grow horizontal; in data space. That’s exactly what Aircel has tried to do by introduction of the data recharge vouchers. We will be waiting for further details on this, but as mentioned earlier too Aircel is betting on Data to garner more revenues (Repetition of Malaysian strategy). Its advertisements also stress the same fact. Data is future of revenues; voice has limitations.
             Recent launch of Apple’s latest Smart Phone iPhone 3GS has certainly brought new dimensions into mobile devices market; especially in fuelling the Smart Phone price war. The move was initiated to offset the impact of Plam Pre ($200) which is considered by many as iPhone killer.  I often wondered how innovation creates new room for non-existing demands in market. You are just exploring new aspects which weren’t thought earlier. This is a gimmick to create demand before the need arises or before earlier product life cycle dies. Though iPhone may have advantage over Plam in terms of number of portable applications available to use; Palm Pre is considered a better choice as far as device features are considered. On the other hand Nokia’s N97 which is launched without any tie-ups with any US carrier has to rely on its laurels to garner sell.
            Surprisingly, one aspect which I would like to mention about Smart Phones is that they drive data revenues to higher end. May be that was the reason, few Indian Operators hurriedly tied up with Apple iPhone. But as of now we have less than 5K iPhone users in India. So if we are looking at Data or 3G seriously, then increasing Smart Phone users & their data usage is must. Only concern is how we bring differentiation in it.

            To our knowledgeable readers, I would like to add few more details on recent war of smart phones in US market. It has been exceedingly difficult for device players to create room for new launches, this despite the fact that such room exists in some or other form. Those of you, who are looking for some real gadget comparisons, do check the below link; it actually evaluates Smart Phones on equal basis.

http://mossblog.allthingsd.com/20090410/the-smartphone-wars/





About Apple iPhones!

14 06 2009

I am no gadget freak, but I like to read about new gadgets which changed our perception of looking at them entirely. One of them is Apple iPhone. In my efforts to provide you information on Apple iPhone 3GS & iPhone 3G, refer to two links below. I am an ardent fan of Om Malik & GigaOm Networks, who constantly provide wealth of information on global technology Industry.

Enjoy reading & Share it if you like.

1. Apple iPhone 3GS: what is missing?

  http://theappleblog.com/2009/06/12/iphone-3g-s-what-is-missing/

2. Is iPhone, a computer or phone or both?

http://gigaom.com/2009/05/13/so-is-the-iphone-a-phone-or-a-computer-or-both/





Some facts & figures of global telecom industry growth!

13 06 2009

Recently I came across some facts & figures which shows that recession has dampened the growth of telecom sector worldwide . But yes, there is silver lining to my statement. India & China are notable exceptions of the fact. Here are some highlights of Telecgrography’s GlobalComm survey:

  • The Top 20 global service providers generated USD251 billion in revenues during the first three months of 2009; 3% up on Q108 but 1% down on Q408
  • The Top 10 telecoms technology vendors generated USD59 billion in revenues during the quarter; 5% down from Q108 and a whopping 15% down from the last quarter
  •  Wireless subscriber additions in the quarter fell off the pace a little as 153 million net new subscribers were added, 10 million fewer than in Q408
  •  No less than 48% of Q1 wireless growth came from India and China which enjoyed an exceptional quarter; growth slowed in many other markets with Western and Eastern Europe being particularly slow
  •  Countries like France, Germany, Italy, Poland, Ukraine and the UK were all essentially flat in terms of mobile user growth, or even in slight decline
  •  Broadband subscriber additions during the quarter came in at 14 million, in line with Q408 additions. China accounted for 30% of global growth; the US was the only other country to add more than 1 million subscribers in the quarter

Is it a bad news? Not actually, though Q4 is supposed to be the most important cycle of market sales, you often find that Q1 has dropped sales figures at start. We don’t have to be panic; it’s just cyclic nature of market.

What’s the reason for dampening of growth? There are two reasons; first one is global recession which has actually hit all industries equally and second, the near saturation of developed market. Earlier where 6% growth figures are well measured in developed markets, Telegeography predicts that for next five years growth will reduce to only 3.5% on an average. Top 20 service providers will see y-o-y growth of 3%, which will come from M&A and not from organic growth. The best organic growth performance came from Vodafone, China Mobile & America Movil.

The biggest hit in the quarter was clearly on the telecoms equipment vendors, service providers and enterprises alike. Huawei, Samsung, RIM and LGE had at least some cause to be pleased with their Q1 revenues, while Nokia, Cisco, Motorola and Alcatel-Lucent will be struggling to take any good news from theirs. Bottom of the class Nortel, meanwhile, dropped out of the Top 10 ranking altogether.





Telecom: A Open discussion Platform

13 06 2009

(I have been writing these short blogs at Idea Cellular earlier, but decided to move it to my own blog link from now onwards. Yesterday I wrote about 3G spectrum)

After a gap of week, there are some inputs which need to be addressed. Telecommunication Industry in India is growing at high pace. Though there is slowdown in telecom market worldwide, India & China are exceptions. We, India are probably the fastest growing mobile market in world. But we still lack many things; a positive sign for growth.

             One issue, which was never addressed in Indian context, is content development in Indian languages. We often talk about potential of mobiles to connect people, but unless we have necessary reasons, we are reluctant to adopt new technology. Earlier when C-DAC took initiative for popularizing Internet by developing websites in different India Languages; there were few takers of the idea. I have worked with Mithi software, which earlier forayed into website content development in Indian languages, but later they had to give up the idea. And now after 15-16 years we are again talking about same; developing mobile contents in Indian languages. Probably we felt it is more than a necessity to have something in Indian languages.  

             Coming back to 3G, the earlier proposed base price of spectrum could get revised in coming months. Let’s keep controversy aside for a moment; think of a new operator who is spending 3500 Cr on spectrum, what cost it will keep of its 3G services to recover the money? 3G is going to cheaper? But from where add on cost of infra rolling will be recovered? Ultimately, it’s not government or operator; consumers are going to bear the cost. The move has many other implications too, but there is a live example in the history of 3G auctions which failed to garner revenues for operators for long.

             Yes, I am talking  about 3G spectrum auction in UK. In year 2000, when auction was held the exorbitant costs of spectrum put excessive burden on operators to retrieve money spent. This has lead to costly services with low popularity. Now, after nine years of waiting when Smart Phone market in on roll, the revenues are coming in. But alas! 4G is in pipe- operators are in dilemma now. The need to recover money spent in 3G spectrum auctions is preventing them to migrate to 4G.

             Are we going to repeat the same mistake? In India, if you ask me, it might take another 10-15 years for investing operator to recover the money spent (Look at O2, BT). You have to count infra cost also. Are we willing to wait so long? We hope technology will enable people to do more they like. We are carrying it forward. But yes, 3G is just a technology and it mightn’t drive thing up initially. Better cross fingers!





IPTV in India-Final Part

7 06 2009

The main benefit for BSNL/MTNL by offering IPTV service is that, they will start earning revenues from fix lines which they deployed long back and whose utility remained to be exploited since their deployment. The launch requires no additional infrastructure investments. This business model is more effective. Think of private players, who are thinking of launching IPTV services, they need to invest hefty amount for rollout of infra which doesn’t exists for them. As said earlier, this would create monopoly of state owned operators which might be harmful for any industry to survive longer. Without competition or very less competition, you are going nowhere. But in case of IPTV, it will flourish with monopoly, as it is competing directly with DTH service, which is a highly competitive market.

What will be future pricing model for IPTV services? Once rollout & initial launch is over, service provider needs to launch new tariff plans to keep existing customer base intact or to add new customers. But due to lack of any competition virtually, IPTV services pricing will be directly follow the competition in DTH domain. The future pricing will be comparable to DTH services, as always it is.

What will be the scope of IPTV services in India? Will it be limited to homes only? Not actually, but yes major chuck of subscribers will be from home segment. Taking IPTV to Corporate environment is possible by launching videoconferencing & training services to enterprises. We can also have internal communications in enterprises based on IPTV platform. In short, the scope isn’t limited to particular segment of market. But initially service providers will focus on grabbing home subscribers which forms major base of subscribers.

One more advantage of IPTV services could be sight in reducing carbon footprint, if we are talking about corporate services. Through Videoconferencing & training, we could bring good benefits to enterprises.

One interesting fact of IPTV services is that, it will push the concept of Broadband Home Network, where different devices like PC, Smart phones & Television will communicate on home network. Not only they will communicate but they will also enable file sharing among them. So future homes will be equipped with Broadband home networks or at least future looks rosy for it.

Here are some market research details which forecast the growth in IPTV market:

  • Strategy Analytics estimates over 80 million subscribers by 2011 (but with only 40-41 million paying).
  • Multimedia Research Group projects 72.6 million subscribers by 2011.
  • Research and Markets forecasts 103 million subscribers in 2011.

While the forecasts vary widely, the overall agreement is that high growth is expected in this market area for the next several years.  Heavy growth is anticipated around the world, and will remain especially high in Europe, Asia-Pacific, and the Americas.  While the Americas is expected to continue to lag the other regions in total deployment, it is expected to become a highly competitive market in terms of revenues, especially as deployments increase and the service offerings are expanded.

Over the next few years, the leading service providers will continue to focus on expanding their coverage areas, increasing deployments and adding new customers and content to their offerings (especially more high-definition content).  Once subscriber levels are at a higher level, the focus will include more differentiating features and services (bringing in the interactive and convergent nature of IPTV technology), with increased emphasis on the concept of the fully integrated digital home network and the expanding role of the social network.

In the residential market, IPTV will provide a level of interactive service never before possible with traditional cable TV.  Capabilities to allow the user to directly contact advertisers or businesses offering products, to view locally inserted advertisements, order goods and get product information, all while watching TV.  This can open up many opportunities for both small and large businesses to reach a much larger audience or to reach a smaller, more targeted audience.  Acceptance of IPTV will also lead to a greater expansion of the digital home market, to the use of social networking, and to the use of videoconferencing.  And while many applications will be initially utilized in the home, they will eventually propagate into the corporate world as more and more remote workers push for the use of these capabilities throughout the workplace.  This, in fact, may be one of the prime reasons that enterprise businesses need to monitor development in the IPTV space — so that they are prepared to implement them (or a form of them) in their corporate network.

Concluded.

(If you are looking for complete market research report by leading research firm Faulkner Services, please contact me at atulrdeshpande@ieee.org. The report is available at highly discounted price for those who are interested.)