Steven Hartley, Michele Mackenzie
Mobile broadband to be worth $137 billion by 2014
Ovum's newly released mobile broadband forecasts show that users accessing the Internet via mobile broadband enabled laptops and handsets will generate revenues of $137 billion globally in 2014, over 450% more than in 2008. However, operators will need to content themselves with the fact that user growth will be far faster than revenue growth, meaning more users and more data traffic but declining ARPUs.Over 2 billion mobile broadband users by 2014
Users of mobile broadband services (3G, 3G+ technologies) will grow from 181 million in 2008 to over 2 billion in 2014, growth of 1024%. In 2014 we forecast that there will be 258 million users worldwide accessing mobile broadband services through laptops, which are connected via USB modems, datacards or have embedded mobile modules. This is a staggering 1022% growth from 2008, which is when mobile broadband supposedly 'took off'. Operators can also expect a similar growth rate for handset users of mobile broadband services, but starting from a much larger existing base. We forecast that handset users will grow from a base of 158 million in 2008 to almost 1.8 billion in 2014.But where will all these users come from?
The most aggressive growth comes from emerging markets, where the unavailability of fixed broadband offers a major opportunity for mobile broadband players. For example, 40% of total mobile broadband laptop users will come from Asia-Pacific in 2014. The advent of 3G in markets such as China and India, the sheer number of mobile users and poor fixed line penetration in these markets means that broadband access to a very large number of people will be purely 'mobile'. For many though, Internet access will be through the handset. In China, there will be 52.5 million laptop users versus 325 million handset users - a ratio of 6:1. However, even in mature markets such as Western Europe, the slowest growing region between 2008 and 2014, user growth in laptop access over the next five years is set to reach 747%, and 918% in handset access. Such recession-busting growth will be music to the ears of operators. The ubiquity of the Internet and the desire to be connected on the move will be key drivers for this, as will the increasing adoption of prepaid tariffs, which support the complementary nature of mobile broadband in such regions with high fixed broadband penetration.Revenues vary by region, but everywhere shows slower growth than users
On a global level, revenues grow at just 44% of the rate of users. A signpost as to the reason can be seen in the fact that, as with most mobile services, the vast growth in mobile broadband user numbers in emerging markets does not provide corresponding revenue growth. Therefore, the contribution of each region remains broadly the same across the forecast period. In 2008, Middle East, Africa and South & Central America contribute 3% to total global revenues, and this only rises to 9% by 2014. The rate of growth between 2008 and 2014 for mobile broadband laptop and handset revenues is consistently below that of users. On a global level this is a factor of the ARPU erosion we assume will take place. Several factors help explain this erosion:- The adoption of mobile broadband laptop access into increasingly less wealthy segments of emerging markets.
- The introduction of prepaid tariffs driving adoption in mature mobile and fixed broadband markets, which boosts users but dilutes ARPU.
- Increasing competition for mobile broadband access driving prices lower.
