While some industry observers have been harping on how long the wireless industry will have to wait before it sees the widespread use of mobile data services, a report from Dataquest Inc. offers a more hopeful outlook, forecasting that wireless data subscribers will blossom in the coming years to a whopping 137.5 million by 2005.
Dataquest, a unit of Gartner Inc., announced the numbers in a new report titled, “Wireless Data Services Move Forward With Anticipated High Growth.” According to the report, wireless data users at the end of last year totaled only 7.3 million in the United States, which is only a small portion of the more than 110 million wireless subscribers in the country.
However, the advent of wireless e-mail and messaging, cheaper data services, company-specific applications and-most importantly-packet-based data networks will work to increase the numbers of mobile data users to the hundreds of millions, the report states.
Dataquest’s view of the mobile data market runs slightly contrary to some other industry observers, who have focused on the protracted wait for mobile data services the U.S. wireless industry faces.
According to Goldman Sachs’ “Global Wireless Communications Report,” only 4 percent of the U.S. wireless subscriber base used wireless data services at the end of last year, accounting for only 1 percent of carriers’ revenue. Comparatively, 37 percent of subscribers in South Korea, close to 50 percent in Western Europe and about 57 percent in Japan used some kind of wireless data service, including short message service.
The view Goldman Sachs and others cast is unsettling, with the United States sorely lagging behind the rest of the world in terms of wireless data use. However, Goldman Sachs also echoes Dataquest’s optimistic appraisal of the future, in which mobile data services will catch on like wildfire in the years to come.
For that future to occur, Dataquest predicts a variety of pieces must fall into place. The most important piece is packet-based networks, which are more favorable to data transmission than circuit-switched services.
According to Dataquest’s report, circuit-switched data service was the leading type of data technology at the end of last year, supporting 38 percent of all wireless data subscribers. This number, the firm said, is largely a result of the wireless Web push from Sprint PCS and Verizon Wireless.
The arrival of packet-based networks, which most U.S. carriers plan to begin building by the end of this year, will likely drive up wireless data use, Dataquest said. According to the report, 70 percent of wireless data subscribers will use cellular packet data networks by 2005.
Once these networks are up and running, carriers will likely augment their efforts to attract additional wireless data users, said Michael King, a senior research analyst with Gartner/Dataquest.
“They’re going to look to recoup their investments” in the networks, he said.
But the carriers likely won’t see an immediate huge cash windfall, King said. Wireless data will become a must-have service for many wireless subscribers, but not right away.
“The revenue number isn’t as huge” as the subscriber numbers will be, he said.
