Jennigay Coetzer – Business Day – 30 July 2009

The number of global mobile connections has exceeded 4-billion, according to the international cellular industry association (GSMA). “This milestone underscores the continued strong growth of the mobile industry and puts the global market on the path to reach a staggering 6-billion connections by 2013,” says Michael O’Hara, Chief Marketing Officer for the GSMA.

This growth is mainly being driven by the integration of mobile capabilities into previously unconnected user devices and new subscribers in emerging markets. Nearly 100 million of the 4-billion connections are mobile broadband connections and with 1,1-billion fixed broadband lines reaching only one-sixth of the world’s population the opportunities for growth are vast.

Paul Budde, CEO of online research company Budde Communication says the demand for mobile data services is at last beginning to grow as more phones have the capability to support broadband connectivity. Coupled with this, a saturated mobile voice market is forcing operators to offer very competitive data packages.

The faster speeds provided by technologies like HSDPA and advances in handset design are also fueling growth. But future growth will depend a lot on the availability of mobile broadband applications and content.

Budde says accessing e-mail while on the move, mobile social networking, location-based services and mapping are seen to have vast potential. “There are many start-ups vying for this space in the sector, and industry leaders such as MySpace and Facebook have also turned their eye towards mobile social media,” says Budde.

In addition, despite low consumer uptake of mobile TV and video services, there is hope that the increasing use of mobile internet will stimulate interest in mobile internet video viewing. “In 2009 in the US, a coalition of broadcasters will launch a new service that will provide digital television direct to mobile devices.”

Mobile music, mobile adult content services, mobile messaging, mobile gambling and mobile payments are other potential growth areas. Budde says there are currently over 400 million 3G subscribers worldwide, but while it has facilitated growth in mobile data usage, 4G Long Term Evolution (LTE) and WiMAX wireless technology are more suitable for mass market mobile communication.

This year, LTE is gaining stronger support from large operators globally with some already conducting trials and others planning to evolve towards the technology in the longer term, he says. SIMalliance, the global association of SIM card manufacturers says global SIM card shipments exceeded 2,9-billion units during 2008, with strong demand from the emerging markets of India, China, Asia Pacific and Latin America contributing to a 29% increase over shipments the previous year.

It says 3G-enabled SIM cards represented 14% of total shipments in 2008. These statistics include SIM cards used in phone handsets, with some users owning more then one, and those used in machine to machine communication.
Research company In-Stat says at the end of 2008, 11% of worldwide cellular network subscriptions were 3G, but it predicts that the percentage of 3G and 4G subscriptions will increase to 30% by 2013. According to Pyramid Research, Africa and the Middle East will lead the world in terms of the percentage of mobile broadband subscriptions through to 2012.

Although Africa and the Middle East generated 10% of global mobile revenues in 2008, the region contributed only 3% of global mobile data revenues, says Dearbhla McHenry, analyst at Pyramid Research. However, the region will double its share of global mobile data revenue by 2014 due to the growing popularity of mobile broadband in the region, in rich and poor markets alike.

Due to the region’s great pent up demand for internet access, combined with its generally inadequate fixed networks, from 2008 through 2012, Africa and the Middle East will lead the world in terms of the percentage of broadband mobile subscriptions, says McHendry.