Title: Global Wireless Data Market 2006 Update Chetan Sharma Consulting
1Global Wireless Data Market 2006 UpdateChetan
Sharma Consulting
2Global Wireless Data Market 2006 Update
- In 2006, mobile data industry grew across every
geography. From the true and trusted SMS
messaging to new services such as Mobile TV, LBS,
and others, different services helped in adding
billions to the revenues generated for the year.
Japan and Korea remain the envy of the global
markets and the countries to study and learn
from. The US market has been steadily making
strong comeback and is soon going to become the
biggest mobile data revenue generating market in
the world. Chetan Sharma Consulting conducted its
bi-annual study on the global mobile data
industry. We took a look at wireless data trends
in over 40 major countries - from developed and
mature markets such as Japan, Korea, UK, and
France to high-growth markets such as China,
India, Brazil, and Russia. The study also took a
detailed look at over 30 prominent operators.
This note summarizes the findings from the
research. - 2006 was a great year for mobile data. Revenues
from mobile data were up in all major regions and
for all major carriers with data contributing
double digit percentage to overall revenues in
most cases. The overall subscriptions rose to
approximately 2.7B and we should be crossing 3B
by the end of 2007. The wireless industry is on
its way to gain the quickest billion subscribers
within the next 3 quarters. - Japan led the way with almost 20B in annual
mobile data revenues. US and China were next with
15.8B and 9.2B respectively. - NTT DoCoMo became the first carrier to cross the
10B barrier for a given calendar year amassing
10.5B for 2006 in data revenues. The Japanese
market was followed by China Mobile at 6.9B,
KDDI at 6.6B, Verizon Wireless at 4.5B, and
Cingular Wireless at 4.3B. They were followed by
Sprint Nextel, SK Telecom, Softbank, O2 UK, and
China Unicom to make up the top 10. - A majority of countries we tracked got double
digit growth in mobile data ARPU except for a
handful of countries which registered a decline
from EOY 2005. Some of the prominent ones being
US (33), Czech (40), Brazil (32), Netherlands
(31), UK (20), and Japan (14). Japan
registered the largest dollar amount increase
with 2.08 increase from 2005 levels. US and UK
data ARPU levels grew by 1.72. - In 2006, SMSs vice like grip on data revenues
loosened a bit with many carriers seeing an
increase in non-SMS data revenues. On an average,
Japan and Korea have over 70-75 of their revenue
coming from non-SMS data applications, US around
50-60, and Western Europe around 30-40. - 2006 was a great year for mobile data. Revenues
from mobile data were up in all major regions and
for all major carriers with data contributing
double digit percentage to overall revenues in
most cases. The overall subscriptions rose to
approximately 2.7B and we should be crossing 3B
by the end of 2007. The wireless industry is on
its way to gain the quickest billion subscribers
within the next 3 quarters. -
3Global Wireless Data Market 2006 Update
- The top 10 carriers increased their revenue by
13 during the second half of 2006 to reach an
aggregate amount of 46.8B for the year in data
revenues. - In terms of data ARPU, Japan continues to lead
the pack with almost 30 of its revenues coming
from data services amounting to almost 17 data
ARPU. Ireland, Norway, Switzerland, UK and South
Korea also registered significant data ARPU. US
crossed the (5, 10) block, where 5 is the data
ARPU and 10 represents the share of overall
ARPU. As of Dec 2006, US stood at (7, 13). For
detailed US Wireless Market update, please see
"US Wireless Data Market Update 2006" (For more
details, please refer to the 9-box diagram in the
ppt for 2005 comparative numbers, please refer
to our paper from last year titled Perspectives
Wireless Data ARPU) - NTT DoCoMos position at the top of the wireless
data world has been challenged recently by
several carriers esp. by its archrival KDDI which
surged past DoCoMo and remained ahead pretty much
for the entire year. Their data coordinates stand
at (17, 31) and (17, 30) respectively.
However, it is 3 UK that is inching towards (20,
30) mark with 26 in data ARPU contributing over
29 to its overall ARPU. 3 Italy with (16, 35)
is also amongst the leaders. - The biggest contribution by data ARPU has been
consistently registered (since mid 2002) by two
Philippines carriers Smart Communications and
Globe Telecom with almost 50 (or 3)
contribution coming from data services. - Even though China reported approximately 9.2B in
data revenues, and the contribution is over
20, data ARPU is around 2, confirming what we
already know its a volume game. For India data
ARPU is just under 1. Approximately same for
Brazil and Russia. Actually, in 2006 the overall
wireless service revenue for US was two times the
overall revenues of the four BRIC (Brazil,
Russia, India, and China) countries combined. So,
lessons are pretty clear as to which markets to
approach for what products and services. - In terms of overall ARPU, it has been a mixed
picture compared to 2005. Of the 40 countries we
looked at, it was an even split, with half of the
countries registering increase in overall ARPU
while the other half were at the same level or
experienced decline in ARPU. US, China, and India
all registered declines while Japan, Russia,
Italy, UK, and Canada had an uptick in their ARPU
numbers. - All the carriers in the top 10 wireless carriers
by wireless data revenues list exceeded 1B in
data revenues for the second six months of 2006
and 2B for the year. - Western Europe officially crossed the 100
wireless subscriber penetration mark (primarily
due to multiple SIMs and double reporting) with
several nations reporting up to 140 subscriber
penetration. US crossed the 75 penetration mark. - The top 10 carriers increased their revenue by
13 during the second half of 2006 to reach an
aggregate amount of 46.8B for the year in data
revenues.
4Global Wireless Data Market 2006 Update
- China crossed the 400M subscriber market in 2006
and is on its way to cross the 500M mark this
year. However, its growth rate was overtaken by
India which is experiencing tremendous growth.
Its net-adds approached 7M subs/month compared to
6M/month for China (though in March 07, monthly
net-adds dipped below 4M probably due to the
pressure from the government to prove the
reported numbers). India crossed Japan and Russia
to stand number 3 behind China and US and is
going to get past US in terms of total number of
subscribers by 2008. - As expected, China Mobile is way ahead of the
second ranked Vodafone w.r.t total number of
subscribers. China Unicom, América Móvil,
Telefonica, SingTel, Deutsche Telekom (T-Mobile),
and Orange (France Telecom) are the next six
largest telecom groups in the world. In terms of
individual carriers, Cingular and Verizon now
occupy the 3 and 4 spot respectively ahead of
NTT DoCoMo, which is at 5. The two Chinese
carriers round up the top two positions and are
likely to stay perched at their lookout vistas
for some years to come. Telecom groups in mature
markets are under enormous pressure to either
come up with a global expansion strategy or
accelerate their existing plans. Carriers in
Japan and Korea are the most under duress. - Japan became the first nation to have more than
50 of its subscribers using 3G. DoCoMo and KDDI
have 60 of their subscriber base using 3G
devices. Korea is close second approaching 50 3G
penetration. 3G is starting to pick-up steam in
both western Europe and North America per our
discussion in the cover story article 3G
Hitting the Mass Market published in Wireless
World Magazine. US and Western Europe crossed the
10 mark for 3G penetration (Italy stayed ahead
with over 25 of its subscriber using 3G phones).
The difference between 2G/2.5G/2.7G and 3G is
palpable, for example, for DoCoMo the difference
FOMA (3G) and mova (2G) was approaching 200. - China and India represent the biggest
opportunities for Infrastructure providers. China
has postponed its 3G decision for the umpteenth
time and is having technical and political
problems to get something in place before the
2008 Olympics. India is going through its 3G
spectrum policy but unlike China is likely to
resolve the issues in short order. Some of the
biggest infrastructure contracts will come from
these two countries that are looking to expand
coverage. - Carriers with nationwide 3G networks and good
distribution of handsets are seeing uptick in
data ARPU. The Japanese and Korean carriers along
with operator 3, Verizon, Sprint Nextel are all
seeing benefits of rolling out their 3G service.
Deployment of 3.5G technologies such as HSDPA and
EV-DO Rev A (and B) are also gaining momentum.
Networks are getting deployed and market is being
seeded with some of the early handsets. - In terms of applications, messaging accounts for
lion-share of data revenues. However, other
services such as Mobile Music, Mobile TV and
video streaming, Mobile Games, IMS, LBS, Mobile
advertising, and others have captured industrys
imagination. Though not much talked about,
enterprise applications are also being adopted
widely esp. in North America as more workers
become mobile and corporations seek efficiencies
in their operations and supply-chain. - China Mobile overtook Vodafone as the most valued
telecom operator in the world which in turn was
surpassed by ATT though China Mobile is likely
to get its title back within a few quarters.
5Wireless Data ARPU in different global markets
(2006)
6Wireless Data ARPU of major global carriers (2006)
7 Penetration in Developed Wireless Markets
8Data ARPU trends in Developed Wireless Markets
(2001-6)
9Top 3 nations Wireless Data Revenues (2006)
10Monthly Net Adds India vs. China
11Top Carriers by Wireless Data Revenues
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