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Technology Stocks : 3G Wireless: Coming Soon or Here Now?

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From: Eric L8/23/2008 10:10:46 AM
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The Expanding Market for Mobile Wireless Data ...

Some good up to date stats here ...

>> US Data Market Grew 40% in Q2, Says Chetan Sharma

Wireless and Mobile News
August 11, 2008

According to Chetan Sharma Consulting, the US wireless data market grew 40% in Q208 compared to Q207 to reach $8.2B in data revenues. The total for 2008 stands at $15.7B for the first six months, 38% higher than the total for the same time period in 2007.

The news of Alltel acquisition, iPhone 3G, and the flat rate pricing wars dominated the news. Though the infatuation for iPhone was a few degrees lower, Apple managed to keep the device front and center of the news cycles. US again exceeded Japan in mobile data service revenues for the quarter and the market is on track to reach $34B in data revenues for 2008.

• The US Wireless data service revenues grew 8.6% Q/Q to $8.2B in Q208. Compared to Q107, the data service revenues grew 40%.

• Overall ARPU increased by $0.46. Average voice ARPU declined by $0.05 while average data ARPU grew by $0.50 or 5%.

• Verizon lead in data ARPU with $12.58 (or 24.41% of the revenues) closely followed by Sprint at $12 (or 21.4354%), AT&T at $11.59 (or 22.91%) and T-Mobile at $8.60 (or 17%).

• The strongest growth in Q208 came from Verizon with 13% increase in data revenues from Q108. Verizon generated an industry record $2.6B in data revenues closely followed by AT&T at $2.5B. Both AT&T and Verizon are on target to exceed $10B in data revenues for the year for the first time by any operator worldwide besides NTT DoCoMo (the two US carriers are already close to 50% of the target). AT&T and Verizon now account for 62% of the market data services revenues. Sprint reversed its decline in data revenues during last quarter to increase its data revenues by 3% in Q208. T-Mobile registered a 5% uptick.

• The average industry % contribution of data to service revenues exceeded 21% and now stands at 21.41%. A year ago, the % contribution stood at approximately 17%.

• The number of data subscribers has been on the rise with Verizon leading the way. At the end of Q208, Verizon had that 49.6M (or 72%) data subscribers. Verizon, AT&T and T-Mobile subscribers joined to send over 169 Billion text messages in Q208 translating into almost a message every 2 hours or so. This compared to users in Philippines where average routinely surpasses a message every hour.

• In terms of net-adds, Verizon continued to lead with 1.5M net-adds again edging AT&T by 200K subscribers for the quarter.

• For the first time, T-Mobile USA entered the top 10 rankings of global mobile operators by data revenues replacing SK Telecom which suffered decline for the second straight quarter. In fact, SKT got pushed to the 12th spot by Orange France. The top three US carriers again maintained their respective rankings amongst the top 10 global carriers in terms of data revenues. For the quarter, Verizon, AT&T, and Sprint Nextel stood at #4, 5, and 6 respectively with Verizon and AT&T closing in on China Mobile (2nd) and KDDI (3rd). AT&T and Verizon are in the select group of five global operators who are now generating $2B or more in data revenues/quarter (the other three are NTT DoCoMo, China Mobile, and KDDI).

• Non-messaging continues to grab 50-60% of the data revenues for the US carriers.

• Q208 saw the blockbuster acquisition of Alltel by Verizon which is likely to close by end of the year. The $28B acquisition will catapult Verizon ahead of AT&T in total number of subscribers by a big margin (10M or so) and make it a leader in almost all major categories.

• There continues to be tremendous activity in the area of Mobile Advertising. AdInfuse, Admob, Amobee, Millennial Media, Nokia, Rhythm New Media, Yahoo, and others ran compelling campaigns. There was also meaningful activity on the carrier front with industry wide initiatives.

• Nokia eclipsed 100M unit sale in Q208 for the fifth straight quarter. It sold over 122M handsets in Q208 (out of the total 297M), almost as many as the next four combined. Nokia's global market share edged past 41%. Samsung at 15%, Motorola with 9.5%, LG with 9.3% and Sony Ericsson with 8% rounded out the top five. For the year, the industry looks to again eclipse the 1 billion handset mark for 2008.

• 3G penetration in the US went past 30% in Q208, with Verizon leading the pack with over 60% 3G subscriber penetration compared to 25% 3G subscriber penetration at AT&T. T-Mobile is slowly expanding its 3G coverage. 3G subs have over $23 in data ARPU. These trends are expected and the diffusion of mobile broadband will continue to create new opportunities and revenues for the ecosystem.

• After raising $14.5B from friends and family, Clearwire's net-adds dropped in Q208. It needs to get its content and handset strategy in place in short-order.

• In a sign of convergence battles to come, T-Mobile's @Home and Sprint's Femto cell initiatives started to take hold. Cable operators are also aggressively seeking triple-play by providing the wireless component of the service.

Global Update

•* China and India added approximately 52M subscriptions combined in Q208 with China marginally edging out India. For the year, both countries have added almost identical number of subscriptions (53M). By comparison, US added 7.5M for the same time period.

• NTT DoCoMo continues to dominate the wireless data revenues rankings with almost $3.4B in data services revenue in Q208. Almost 40% of its revenue now comes from data services. DoCoMo also crossed 84% in 3G penetration in Q208 and is expected to cross 90% by early 2009.

• Most of the major carriers around the world have double digit percentage contribution to their overall ARPU from data services. Operators like KDDI, DoCoMo, and O2 UK are consistently topping 30%. ###

- Eric -
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