by Alan J. Weissberger contact him at alan at viodi.com
Abstract
We have written extensively about Mobile Broadband, concentrating on WiMax related technologies and market developments. In this article, we look at what three telecom market research analyst firms are saying about the evolving 3G+ technologies for mobile broadband access. They are not very optimistic about mobile WiMax (see italicized comments below). Finally, we contrast these predictions with the perennially optimistic WiMax forecasts of Trendsmedia (now part of Yankee Group).
Discussion
1. In an August 9, 2007 New York Times article HSPA (High-Speed Packet Access) will dominate the future mobile broadband market, if hardware makers offer a compelling value proposition in terms of good cost-performance.
A report by analyst firm Juniper Research predicts that 70 percent of mobile-broadband subscribers will use HSPA by 2012. Total mobile-broadband subscribers will number 1.2 billion by then, equivalent to nearly one in three mobile subscribers worldwide.
HSPA is a broadband packet data evolution of the GSM cell phone family of standards. It delivers mobile-broadband speeds in excess of 500 kilobits per second and up to several megabits per second. There are currently about 5 million HSPA subscribers worldwide, according to UMTS Forum.
Howard Wilcox, an analyst at Juniper Research and the author of a report called Mobile Broadband Markets: WiMax, EV-DO, HSPA & Beyond, 2007-2012, said takeoff of the mobile-broadband technology will depend on the success of HSPA-enabled hardware.
There are currently 128 HSDPA-enabled devices–which provide data downlink speeds 5 to 10 times faster than those of standard 3GSM (WCDMA) wireless devices–according to the GSM Association. That figure includes 46 handsets, 32 data cards, 30 laptops and one MP3 player.
“HSPA has the edge over mobile WiMax, as it is here and now," according to Wilcox. "It is out there, it’s available and it is also a software upgrade from the existing 3G/GSM networks, whereas WiMax will take longer to establish itself because WiMax is essentially a new network build," he said. Wilcox said mobile WiMax is likely to net "a single-digit percent proportion of the global mobile-broadband subscriber base by 2012," with EV-DO (rev A and B) being the next most prolific technology after HSPA, driven by markets in the Americas and the Far East.
Of course, Intel and SPRINT would disagree with this assessment as they are betting heavily on mobile WiMAX as the broadband wireless technology of choice. One analyst also disagrees- a recent report by Senza Fili Consulting predicted that the combined total of fixed, mobile and fixed, and mobile-WiMax subscribers will reach 54 million by 2012 – a very respectable number, in our opinion.
Juniper Research said demand for mobile broadband would primarily be driven by North America and Western Europe, with China and the Far East also playing a part. Mobile-broadband subscriber numbers are likely to surge as older hardware in developing countries is replaced by newer, broadband-enabled technology, Wilcox said.
"In a few years’ time, (mobile-broadband capability in mobile devices will) become a given and, therefore, people who previously had no mobile capability will have this almost whether they like it or not," Wilcox said.
2. According to Berg Insight, the mobile broadband market is expected to increase at a compound annual growth rate of 22.9 percent to reach € 3.0 billion by 2011. HSPA and legacy 3G standards are expected to remain the dominant network access technology throughout the entire period with a market share well above 90 percent.
The total market value for devices and network services in EU 23+2 countries reached € 1.1 billion in 2006, with shipments of PC-cards and USB-modems growing to 3.2 million units. Vendors’ Q1-2007 financial data indicated an increase in shipments in the range of 40–50 percent and a general price reduction of 20 percent.
At the end of 2006, there were about 3.3 million active WCDMA/HSPA mobile connections in EU23+2, compared to less than a quarter of a million for all other technologies combined. Deployments of HSPA in lower frequency bands is however likely to reduce the traction of EVDO on the European market in the longer term.
HSPA advanced from peak data rates of 1.8 Mbps for commercial networks in early 2006 to 7.2 Mbps downlink and 2.0 Mbps uplink in the first half of 2007. Berg Insight expects the first deployments of 14.4 Mbps network to take place on the European market in 2008. HSPA+ is anticipated to become available by 2009, doubling the maximum downloading speeds to 28.8 Mbps.
Berg Insight does not believe that Mobile WiMAX will have any major impact on the European market in the coming five years. Any successful alternative network service provider must overcome a number of formidable barriers. These include securing sufficient radio frequency spectrum, financing and constructing completely new infrastructure and finally gain a competitive edge against three to four established HSPA network operators, who by that time will offer network speeds of at least 14.4 Mbps at price points comparable to DSL.
3. A Frost & Sullivan research service titled “Mobile WiMAX, xMax and 3G LTE – Analysis of Mobile Broadband Technologies” has published a detailed analysis of the various broadband wireless access technologies emerging in the European market. Some of the underlying issues pertaining to these technologies are focused upon. The study also offers an insight into how these technologies will deliver an experience that is similar to that offered to users in the fixed broadband space. In this research report, Frost & Sullivan’s analysts thoroughly examine the following technologies: 3G Long Term Evolution (LTE), Mobile WiMAX and xMax.
Despite Western Europe having achieved more than 100 per cent mobile cellular penetration, with some users having multiple subscriptions, not many cellular carriers have attained reasonable return on investment (ROI) after spending billions of dollars in acquiring third generation (3G) spectrum and rolling out related networks.
Infrastructure cost will certainly be an issue, according to the authors. Mobile WiMax base stations cost anywhere between €30,000 and €130,000 (Macro BTS, high-end, single digit quantities), which is not nearly as cost-effective as existing cellular infrastructure. “While Mobile WiMax been allocated spectrum further down the frequency band in comparison to 3G, the propagation properties of the signals will be far less compelling than that of 3G due to the laws of physics," notes the analyst. "Hence, current 3G systems require as few as one-sixth of as many cell sites to a Mobile WiMax network. As a result, more WiMax base stations will need to be deployed to achieve coverage and performance characteristics at par with that of 3G systems."
4. Earlier this year, Yankee Group, www.yankeegroup.com published an interesting presentation on the Mobile Broadband market. They say that the perceived need for mobile broadband services (to expand revenues and increase profits) is finally starting to have an impact on the overall strategies of network operators in many parts of Europe. Vodafone Germany was the largest provider of mobile broadband at the end of 2006 with 540,000 subscribers. Vodafone UK and Vodafone Italy also qualified among the top five networks with 220,000 and 140,000 subscribers respectively. T-Mobile Germany was estimated to be number two network in size, with approximately 240,000 subscribers. A1 Mobilkom also qualified for the top five with 140,000 subscribers – a very high figure considering the size of the Austrian market.
A few highlights from their examination of WiMax in developing countries:
- Fixed WiMAX networks can be found in Croatia, Saudi Arabia, South Africa, and Taiwan, where the appeal of delivering broadband without laying expensive fiber outweighs the risk of working with still-emerging technology.
- Motorola is testing Mobile WiMAX in Pakistan, where Wateen Telecom hired Motorola in May to design and deploy a nationwide wireless broadband network based on Mobile WiMAX. Wateen Telecom expects to support more than 1 million users, with the initial deployment expected to be completed by year’s end.
- Several Indian Mobile and Broadband Service Providers plan to use WiMAX to rapidly expand broadband Internet market
- China is both the largest WiMAX market opportunity but also the most unknown
Yankee Group predicts a relative rosy picture for the mobile WiMax market, with commercial services to start ramping in 2009. They anticipate 27.7M subscribers by 2011, with an optimistic forecast of the same number of subs by 2nd Quarter of 2010.
