Although worldwide cellular and PCS subscribers increased 54 percent during 1999, subscriber growth is expected to slow significantly through 2007, especially in more mature markets, according to findings in The Strategis Group’s new study, “World Cellular/PCS and 3G Markets.”
However, the report said there will be approximately 1.37 billion cellular/PCS and third-generation subscribers by 2007, compared with about 530 million at the end of the first quarter of this year. By the end of 2000, the cellular/PCS market will generate $296 billion in global service revenue, with more than 636 million subscribers.
“Worldwide cellular/PCS subscribers increased rapidly from 1993 to a peak in 1999. Fueling that rise was the start of cellular service in emerging markets and continued expansion of the cellular/PCS subscriber base in mature markets, notably the United States, western Europe and Japan,” said Ayse Ozgur, study author and analyst with The Strategis Group.
In addition to decreased subscriber growth, the report predicted fierce competition, network saturation and continued preparation for the advent of 3G services in established cellular and PCS markets. In emerging markets, the report said there will be high net subscriber growth, high average revenue per subscriber and rapid adoption of digital technology during the next seven years.
The outlook for 3G service deployment is strongest in western Europe and the Asia Pacific, the report said. Fourteen markets in western Europe and seven markets in Asia Pacific are expected to commercially launch 3G services by 2003. Western Europe is predicted to be the largest 3G market by 2007, accounting for 56 percent of the total 3G subscriber base. Asia Pacific will account for 34 percent of the 3G worldwide market, The Strategis Group said.
Regulatory and licensing issues are among the top reasons why 3G will not grow as quickly or as aggressively in the United States. Operators are not yet convinced the consumer demand will justify the tremendous investments required to build out a 3G network.
“As operators migrate to 2.5G service offerings, the next year will be critical in determining how serious U.S. operators are about rolling out 3G,” The Strategis Group said.
