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Year of the 3G Phone
Posted: 07-Feb-2006 [Source: ABI]

[The global cellular market is set to reach 3 billion subscribers before the end of 2008 reports ABI.]

Oyster Bay -- At the end of September 2005, the global cellular market clocked a record 2 billion cellular subscribers. By the end of December 2005 that figure had reached 2.14 billion and is well on the way to reaching 3 billion before the end of 2008.

"There is potential to push those numbers to 3.5 billion if some of the low-cost handset and infrastructure initiatives being promoted by manufacturers such as Nokia, Motorola, and Ericsson can help operators in India, China and Africa push coverage further inland and reach the smaller townships and villages," said Jake Saunders, Director of Global Forecasting at ABI Research. As a result of these initiatives, mobile phone calls that typically cost US$ 0.019/minute and US$ 0.045/minute in China and India respectively will drop 20% by 2008.

WCDMA is really starting to ramp up and 2006 is looking like "The Year of the 3G Phone". At the end of 2004 there were 17.3 million 3G subscribers, and by the end of 2005 there were 42 million WCDMA subscriptions: a Year-on-Year growth rate of 142%. By the end of 2010, there will be 1 billion 3G subscribers milling around the world, which will equate to 30% of the global subscriber market.

3G has come of age and it looks like we are on the cusp of another boom period, but there are uncertainties as to how the 3G market will evolve. When will 2G-only handsets be phased out of the market for developed economies such as Western Europe, Japan and the US? Will TD-SCDMA increase or decrease the price elasticity curve for 3G adoption in China? Will stripped down 3G systems be deployed in emerging markets? Will the current boom in handset replacement rates keep up, or could they fall to potentially 2001-2002 levels? Will mobile WiMAX disrupt the cellular business model?

"There are still definitely opportunities to be exploited in the mobile cellular market-place but there are also a number of new and old uncertainties," adds Saunders.

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