Home > Market Research > Mobile Strategies > The Future of the Global Wireless Industry: scenarios for 2007–12

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Market Study
Published: May 2007
Pages: For full details, please email keithw@cmsinfo.com
Tables: 25
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Research from: Analysys Mason
Sector: Mobile Strategies

The wireless industry needs to prepare for major changes ahead. There is more uncertainty in the industry than ever before, and the market could evolve in very different ways. We have defined three plausible scenarios for the future of the global wireless industry, building on emerging trends that can already be witnessed today. Any organisation that aims to define a robust strategy must test its plans and assumptions against these scenarios.

The wireless industry faces greater uncertainty than ever before regarding the future of voice telephony, non­-voice services, technology evolution, industry structure, and the relative importance of developed and developing markets. This could lead to very different outcomes for mobile operators and equipment vendors during the next five years. Organisations need to develop robust plans to steer the industry in their preferred directions, and to ensure success regardless of how the market develops. This may require a change in attitude to risk, investment in new areas of business, as well as experimentation and different approaches in different markets.

To prepare organisations for the potentially radical changes and challenges that lie ahead, this report studies emerging trends in the industry and focuses on five broad areas that will have a major influence on its future direction.

- Voice telephony – how trends such as price competition and regulation, fixed–mobile substitution and VoIP will affect the usage of, and revenue from, voice services on wireless networks.
- Non-voice services – the evolution of the wireless service mix, the extent to which mobile operators will have to diversify their service offerings (for example, to include fixed services) and the extent to which they will become low-margin data pipes.
- Technology deployment – the future role of an increasing range of technologies, including IMS, HSPA+, CDMA2000 EV-DO Revision A/B, 3G LTE, WiMAX and dedicated broadcasting technologies, as well as the impact of indoor base stations and network sharing.
- Industry structure and competition – the role of MVNOs and network-independent service providers, the ability of mobile operators to maintain their dominance of the value chain and the extent of future consolidation.
- The relative growth of developing and developed markets – the extent to which revenue growth will continue in developed markets despite mobile penetration saturation, and the extent to which industry growth will shift from developed to developing markets.

The report identifies and quantifies three plausible scenarios for the evolution of the global wireless industry, entitled ‘Emerging Markets Thrive’, ‘Cellular Goes Indoors’ and ‘Low-cost Data Pipes’. The report discusses the implications of each scenario for industry players and identifies early indicators of the increased likelihood of each scenario.

The Future of the Global Wireless Industry: scenarios for 2007–12 answers your key questions:

- What are the major emerging trends that could have a major impact on the wireless industry?
- How could the global wireless industry evolve during the next five years?
- What impact will each scenario have on the major players in the wireless industry?
- What actions should mobile operators, handset and infrastructure vendors, and other organisations take now?

Who should read this report

- Mobile/wireless network operators: senior executives, business planners and technologists, to understand how the global wireless industry may evolve, the possible consequences for mobile operators and the actions they need to take.

- Wireless infrastructure and handset/terminal vendors: senior executives and product managers, to understand how the global wireless industry may evolve, the opportunities and threats for equipment manufacturers and the actions they must take.

- Financial analysts and investors: to understand how the global wireless industry may evolve, and how it will affect the success or failure of industry players.

About the authors

Dr Mark Heath and Dr Alastair Brydon are founders of Sound Partners Ltd and authors of more than 30 reports from Analysys Research, including The World’s Top Ten Non-voice Services for Mobile Operators, Picocells and Femtocells: will indoor base stations transform the telecoms industry?, Mobile Operator Strategies for Fixed Broadband, Fixed–Mobile Substitution in Western Europe: causes and effects, Mobile Operator Performance Benchmarks, The Business Case for WiMAX, Forecasting the Commercial Impact of Wireless VoIP in the USA and Western Europe, Pricing Mobile Services for Success: towards a bundled future, Evaluating the Options for Mobile TV and Radio Broadcasting in Western Europe, Lessons from the Japanese and South Korean Mobile Markets: handsets, services, content and pricing, Prospects for the Evolution of 3G and 4G, Scenarios for the Evolution of the Wireless Industry in Europe to 2010 and Beyond, and Accelerating Fixed–Mobile Substitution: detailed operator case studies.

Mark is Director of Research at Sound Partners Ltd. He previously held a number of marketing and business development roles in Nokia, ultimately becoming responsible for strategy and business development across Europe. Before that, Mark was responsible for business planning at BT Cellnet in the UK, after spending six years at BT in wireless systems research and development. Mark holds BSc and PhD degrees from the University of Leeds, winning the University prize for his research in telecommunications. Mark also holds an MBA, graduating as top student from Henley Management College.

Alastair is CEO of Sound Partners Ltd. Prior to joining Sound Partners, Alastair reported to Nokia’s European management team and worked with many of Nokia’s customers to implement market firsts ranging from the introduction of prepaid mobile tariffs to new mass-market content services. Previously, Alastair worked in a number of roles for the BT Group, focusing on the evolution of wireless services, networks and technologies. He also contributed to international research and standardisation of GSM, DECT and 3G. Alastair holds BSc and PhD degrees from UMIST, where he was awarded the IEE Prize for top student.

Tony Lavender (Managing Director) joined Analysys Research in 2007 from Ovum, where he had worked since 1999. At Ovum, Tony led a large research programme covering the telecoms, software and IT services sectors, while his own particular focus was on telecoms industry and regulation issues. Tony’s extensive management experience includes leading a global team of 90 people and responsibility for research revenue of GBP12 million. Before Ovum, Tony spent two years at Oftel and worked at BT for 18 years. He has a degree in Electronic and Electrical Engineering.

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Table of Contents

0 Summary
1 Organisations must be ready to deal with increasing uncertainty and change in the wireless industry
2 Major uncertainties in the wireless industry could lead to very different outcomes
2.1 Five key factors will influence the wireless industry’s future
2.2 Voice telephony is the dominant source of mobile ARPU, but a number of developments will influence its future
2.3 The potential of mobile non-voice services is unproven, despite mobile operators anticipating significant growth
2.4 Mobile operators are faced with a bewildering array of technology options for delivering services to end users
2.5 Organisations from outside the wireless industry could have a major influence on mobile services
2.6 Developing markets may offer greater growth prospects than developed markets in the next five years
2.7 Three plausible scenarios have been defined for the future evolution of the wireless industry
3 Scenario 1: Emerging Markets Thrive
3.1 Limited growth prospects in developed countries drive organisations to focus on developing markets
3.2 The ‘Emerging Markets Thrive’ scenario involves a major change of focus, but can have significant benefits for some
3.3 Failure to achieve growth in non-voice services in developed markets will be an early indicator of this scenario
4 Scenario 2: Cellular Goes Indoors
4.1 The indoor environment becomes the focus for the wireless industry
4.2 The ‘Cellular Goes Indoors’ scenario is very positive for organisations that can adapt quickly to the new environment
4.3 Successful early deployment of indoor base stations will be a key indicator of this scenario
5 Scenario 3: Low-cost Data Pipes
5.1 Mobile operators suffer dramatic declines in data pricing and lose control of the services carried on their data pipes
5.2 The ‘Low-cost Data Pipes’ scenario is bleak for many mobile operators, but has many opportunities for other organisations
5.3 Increasing availability of uncapped-usage data packages will indicate increased likelihood of the ‘Low-cost Data Pipes’ scenario
6 A number of core themes will be fundamental to the wireless industry's future
6.1 Organisations must prepare for different futures
6.2 A key factor in the evolution of the wireless industry is the extent to which indoor base stations will be deployed
6.3 Investment, diversification and experimentation may all be required to achieve success
6.4 Industry players need to prepare for consolidation
6.5 Changes in wireless industry structure and ownership could bring different brands to the fore
6.6 Operators and vendors need to innovate more on costs
6.7 Operators should seize the opportunities in developing countries now


Figures and tables

Table 0.1: Main attributes and implications of the three scenarios
Figure 2.1: The proportion of total ARPU attributed to voice services for selected operators, 4Q 2006
Figure 2.2: The proportion of outgoing voice traffic in Western European countries that was mobile-originated, 1Q 2004, 1Q 2005 and 1Q 2006
Figure 2.3: Changes in mobile voice usage and mobile voice spend from 2004 to 2006 in selected countries
Figure 2.4: Non-voice ARPU for selected mobile operators, 1Q 2005 to 4Q 2006
Figure 2.5: Non-voice ARPU breakdown for selected mobile operators, 4Q 2006
Table 2.1: Comparison of revenue per megabyte for a number of non-voice services
Table 2.2 Emerging wide-area wireless access technologies and their impact on the wireless industry
Table 2.3: Mobile subscriber growth and penetration in selected developed and developing countries, 2000–5
Table 3.1: Voice telephony trends in developed markets in the ‘Emerging Markets Thrive’ scenario
Table 3.2: Non-voice service trends in developed markets in the ‘Emerging Markets Thrive’ scenario
Table 3.3: Technology trends in developed markets in the ‘Emerging Markets Thrive’ scenario
Table 3.4: Market structure trends in developed markets in the ‘Emerging Markets Thrive’ scenario
Table 3.5: Developing market trends in the ‘Emerging Markets Thrive’ scenario
Table 4.1: Voice telephony trends in developed markets in the ‘Cellular Goes Indoors’ scenario
Table 4.2: Non-voice service trends in developed markets in the ‘Cellular Goes Indoors’ scenario
Table 4.3: Technology trends in developed markets in the ‘Cellular Goes Indoors’ scenario
Table 4.4: Market structure trends in developed markets in the ‘Cellular Goes Indoors’ scenario
Table 4.5: Developing market trends in the ‘Cellular Goes Indoors’ scenario
Table 5.1: Voice telephony trends in developed markets in the ‘Low-cost Data Pipes’ scenario
Table 5.2: Non-voice service trends in developed markets in the ‘Low-cost Data Pipes’ scenario
Table 5.3: Technology trends in developed markets in the ‘Low-cost Data Pipes’ scenario
Table 5.4: Market structure trends in developed markets in the ‘Low-cost Data Pipes’ scenario
Table 5.5: Developing market trends in the ‘Low-cost Data Pipes’ scenario
Table 6.1: Main attributes and implications of the three scenarios

For full details, please email keithw@cmsinfo.com

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