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Table of Contents

Market Study
Published: September 2011
Pages: 170
Tables: For full details, please email keithw@cmsinfo.com
From: GBP 833.00  Buy Now!
Research from: Berg Insight
Sector: Broadband & Fixed

The European and North American mobile broadband markets show continued growth fuelled by declining prices and improving performance. Berg Insight estimates the total global number of shipped mobile broadband devices in 2010 to 92.7 million, with Europe and North America accounting for 27.4 million units and 8.5 million units respectively. Get up to date with the latest developments in this 170 page report in Berg Insight's NGT Research Series.

Mobile broadband based on HSPA/LTE and other mobile communication standards has
taken off as an important technology for connecting mobile PCs and tablets to the Internet.
The evolution is led by Europe where HSPA now accounts for 20.6 percent of the total
number of broadband connections, compared to 13.2 percent in North America. The concept
that was first launched as an exclusive business service is now a mass-market consumer
product sold on an intensively competitive market. Consumers are utilizing their mobile
broadband connections extensively, pushing the networks to their capacity limits. In Europe
the majority of data traffic on mobile networks is generated by notebook PC users that surf
the Internet. Fair use policies must be implemented to ensure network availability and pricing
must be predictable. International roaming is still largely hindered by prohibitive pricing,
making services utterly unattractive to use abroad.

Mobile broadband terminals are available in different forms and shapes. Four main types
have emerged to satisfy different needs – PC-cards, USB modems, embedded modules and
gateways. Berg Insight estimates the total global number of shipped external mobile
broadband devices in 2010 to 92.7 million, with Europe and North America accounting for
27.4 million units and 8.5 million units respectively. In addition, shipments of embedded
modules reached an estimated 9.5 million units. Expectations on embedded solutions for
mobile PCs have been high during the past years, but the attach rate is still relatively low at
4.7 percent in 2010. The European market for external mobile broadband modems grew by
13 percent in 2010. Growth is forecasted to continue with shipments reaching 60 million units
in 2016, fuelled by strong demand for mobility in notebook PCs. Also the North American
device market will experience a rapid growth to reach 25 million shipments in 2016. The
device ASP in Europe has fallen steeply over the past years and reached € 31 in 2010. The
North American device market is characterized by a larger mix of mid-range and high-end
products, whereby the ASP remained as high as US$ 87 in 2010. Berg Insight predicts that
the ASP decline rate will slow down significantly in Europe during the next few years, whereas
in North America the ASP will even increase in 2011. This is primarily due to a growing share
of HSPA+ and LTE modems and mobile hotspots in the product mix. The EU 23+2 external
device market generated an estimated € 856 million in 2010 while the North American market
generated estimated revenues of € 522 million.

The European mobile broadband market continues to grow rapidly, with demand fuelled by
declining prices, improved user experience, massive marketing campaigns and new device
categories. Berg Insight estimates that the total number of mobile broadband subscribers in
EU 23+2 grew by 33 percent to reach 33.9 million in 2010, while the estimated operator
revenues reached € 5.9 billion. The European mobile broadband market is expected to grow
at a compound annual growth rate (CAGR) of 12.4 percent to reach € 11.9 billion in 2016.
This revenue growth is driven by strong year-on-year net additions to the subscriber base,
which is projected to reach 96 million by 2016. Today, a majority of the users subscribe to
data bundles for 12 or 24 months, but as the market matures a majority of new subscribers
will only be occasional users generating lower network ARPU.

Berg Insight estimates that the number of mobile broadband subscribers in North America
reached 14.6 million by the end of 2010. The subscriber base is forecasted to grow at a
CAGR of 25.8 percent to reach 58 million subscribers in 2016. The estimated service
revenues were about US$ 8.3 billion in 2010 and are expected to grow at a CAGR rate of 12.4
percent to reach US$ 16.6 billion by 2016. The growth in North America is currently
accelerating primarily due to the increasing uptake of tablet data plans and the introduction of
LTE.

Huawei has established itself as the world’s largest supplier of mobile broadband terminals
holding a market share of 49 percent and has a particularly strong foothold in Europe. ZTE is
the second largest vendor with clear margins capturing a market share of 31 percent. In North
America, the local vendors Sierra Wireless and Novatel Wireless still hold strong positions. A
vast majority of the external modems shipped are USB modems, but mobile hotspots are
gaining in popularity. Two of the largest telecom vendors – Ericsson and Qualcomm –
entered the market for embedded solutions in 2008 and have managed to sign contracts with
many of the major notebook vendors. The two companies captured a market share of 83
percent together on this market in 2010.

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