The worldwide wireless industry is expected to pass a significant milestone sometime during 2000.
With total mobile subscribers at the end of last year of about 315 million and a growth rate of nearly 8 percent this year, mobile subscribers are expected to surpass the one-half billion mark next year, according to research conducted by the Yankee Group, Boston.
The study also predicts net additions worldwide will peak next year at more than 142 million net additions and gradually taper off after that.
Total subscribers are expected to reach 1 billion by 2004, and be nearing 1.75 billion by 2010. On a region-by-region basis, Asia/Pacific is expected to have the most subscribers by 2010, with nearly 733 million subscribers, followed by Western Europe with 318 million, North America with 239 million, Latin America with 163 million, Eastern Europe and Russia with 116 million, Africa with 85.8 million and the Middle East with 78.5 million.
Changing metrics
Those numbers, however, may be of increasingly less importance as the years go by. Yankee Group analyst Crispin Vicars said the traditional way of measuring the wireless industry-subscriber growth-eventually will change.
“We need to come up with new metrics to measure the industry,” said Vicars, who noted multiple voice and data options will allow customers to take on a variety of different devices and services. “You would have to think subscriptions will become a better way to measure the marketplace.
“Metrics like (average revenue per user) become outdated because there is going to be different market segments and profitability,” continued Vicars. “People will measure revenue on a bit basis rather than ARPU.”
Changing landscape
Global deregulation also is changing the telecommunications marketplace, encouraging new competitors to enter the market. However, consolidation, which seems to have gripped the industry, appears to be creating a telecom landscape dominated by a handful of regional and global players.
“We’ve already seen some of the global players coming to the forefront,” said Larry Swasey, analyst at Allied Business Intelligence. Swasey pointed to U.K. carrier Vodafone Group plc’s recent acquisition of U.S. cellular carrier AirTouch Communications Inc. as an example of such a trend.
Carriers likely to emerge as regional or global leaders, said Swasey, are those that are consolidating the market today. Further international consolidation probably will occur among companies in countries that share either a common currency or a common language, said Swasey.
“In think in the United States we have the development of super carriers,” said Vicars, who said the same thing will happen in Europe with a handful of companies there building pan-European networks.
Consolidation in the United States has been driven by landline telephone companies amassing larger landline territories with wireless as an afterthought in many cases. In Europe, said Vicars, there are several strong mobile operators that are likely to be doing the acquiring of fixed line and data assets, such as Telecom Italia Mobile and Vodafone.
In particular, Vicars pointed to NTT DoCoMo, Vodafone, British Telecommunications plc and BellSouth Corp. as a few of the companies that could emerge as powerful regional or global players.
Consolidation could have the unintended side affect of stifling growth, however, noted ABI’s Swasey. While a combined company’s infrastructure buildout should increase, the overall buildout for a particular market in theory would decrease, leaving the same amount of customers on increasingly overburdened networks.
