Worldwide mobile telephony subscriber numbers will climb at triple the compound annual growth rate expected from the landline side between 1996 and 2002, according to a recently published report from the Yankee Group, “Global Trends of Cellular/PCS Markets.”
In 1995, global mobile telephony subscribers stood at 85.3 million. The Yankee Group believes that number had risen to 198.5 million by the end of 1997, and projected 529 million subscribers by 2002. The research firm said the numbers translate into global cellular and personal communications services revenues expanding from $87.2 billion in 1996 to $313.2 billion in 2002.
“The impact of this is significant,” said Mark Lowenstein, vice president of the Yankee Group’s Global Wireless/Mobile Communications program. “While global wireline teledensity only rises to 18.6 percent in 2002 from 13.1 percent in 1996, we predict that global wireless teledensity will grow by a factor of four, from 2.3 percent in 1996 to 8.3 percent in 2002.”
The Yankee Group also said it remains “technology agnostic,” although the report does predict Code Division Multiple Access technology will overtake Time Division Multiple Access technology because of its introduction in certain Asian markets.
At the end of 1997, the Yankee Group counted about 9 million TDMA subscribers and 6 million CDMA subscribers, and expects those numbers to change to 59 million for TDMA and 92 million for CDMA. However, China remains a huge wildcard that will determine whether CDMA becomes a global standard to the degree that Global System for Mobile communications technology has.
The researchers also found the global market to be quite concentrated, with the top 20 carriers out of 505 network operators accounting for 53 percent of global wireless subscribers. The Yankee Group further expressed concern that markets are being oversaturated, especially in developing Asian countries, citing Malaysia and Hong Kong as the most telling examples.
To gauge the level of global competition, the report looks at the total number of networks being deployed. The analysis showed that there were about 10 cellular networks in 1982, and that by the end of 1997, there were 687 wireless networks. The Yankee Group expects there to be 1,144 wireless networks in 2000, excluding likely operator consolidation and third-generation networks in developed markets.
As competition drives service prices lower and digital services enhance wireless functionality, consumers are more likely to use their phones as a central communications device, the Yankee Group said. In 1997 alone, the worldwide average price dropped by 20 percent at the level of 100 minutes of use per month, and by 22 percent at the 250 MOU per month level, according to the report.
This continuing trend will result in significant growth in worldwide wireless traffic, the Yankee Group said, estimating that total wireless MOUs will grow at a compound annual growth rate of 47.4 percent, from 183.8 billion in 1996 to 1.5 trillion in 2002.
“This means that wireless traffic as a percentage of total telecom traffic will grow from 5 percent in 1997 to 18 percent in 2002, making landline displacement a reality,” said Crispin Vicars, program manager of wireless/mobile communications and principal author of the report.
