Mobile Broadband Booming but Downturn will Help Delay LTE Takeoff to 2013

By: By Informa Telecoms & Media
( 1 May 2009 )

The mobile broadband market exploded in the last year, driving major increases in mobile operator data subscribers and revenues, and will play an increasingly central role in the success of the mobile industry.

"Mobile broadband has become one of the key growth engines for the mobile industry, with 186 million mobile broadband subscribers worldwide at the end of 2008, up 84 percent from 101 million at end-2007," says Mike Roberts, Principal Analyst at Informa Telecoms & Media and lead author of the Future Mobile Broadband report. "By 2013, mobile broadband subscribers will represent almost one-third of total mobile subscribers worldwide."

The mobile broadband boom was triggered by the combination of widespread mobile broadband network coverage, appealing devices such as USB modems and the iPhone 3G, and competitive flat-rate tariffs. "Flat-rate mobile broadband services with widespread coverage and new devices such as USB modems and the iPhone 3G are a runaway success, and have made mobile broadband one of the most significant strategic and commercial opportunities in the converging mobile and broadband markets," Roberts says.

Future Mobile Broadband finds that at the end of 2008 there were more than 400 commercial mobile broadband networks worldwide supporting thousands of different mobile and portable devices and generating billions of dollars in operator revenues. "For many mobile operators, mobile broadband is driving sustained increases in data ARPU. That in turn is key to increasing overall revenues, given ongoing declines in voice ARPU."

The mobile broadband markets in the US, Japan and Korea saw phenomenal growth in 2008, which led the three markets combined to account for the majority of global mobile broadband subscribers by the end of the year. "The US, Japan and Korea dominated the global market in 2008, but this is changing fast as mobile broadband becomes a mass-market service worldwide," Roberts says.

For example, all the pieces are falling into place for China Mobile's TD-SCDMA mobile broadband service to gain traction by 2010, and that together with new HSPA, EV-DO and TD-LTE services will drive the country to become the second-largest mobile broadband market worldwide in 2013. India will be the fourth-largest market in 2013, following BSNL's launch of EV-DO mobile broadband services in 2008 and BSNL's and MTNL's expected launch of HSDPA services in late 2009.

However, mobile broadband will not be immune from the economic downturn, which will pile the pressure on beleaguered equipment vendors and force some operators to scale back or delay major investments, particularly in next-generation systems such as LTE.

"There's no doubt that the downturn will delay LTE deployments, with major operators already citing it as a key factor leading them to push LTE launch dates to 2011-12," Roberts says. "Major operators such as Verizon Wireless and NTT DoCoMo are still committed to launching LTE in 2010, but the economy will still be tough then, which could hit rollout schedules and takeup. Many operators are also realizing that HSPA and HSPA+ upgrades should meet their needs for the next few years, and will cost a lot less than LTE rollouts. The net result is that the LTE subscribers will not start taking off until 2013."

However, the overall outlook for the mobile broadband market is good. "Mobile broadband is already a must-have service for many consumers and businesses, which helps to explain why it will be one of the strongest mobile segments throughout the downturn. We've fully revised all our forecasts in light of the economic downturn, but we're still expecting strong growth through 2013 in mobile broadband subscribers, device unit sales and operator data revenues."