The global 3G services market is witnessing unprecedented growth as a result of the rise in high bandwidth demand, growing smartphone proliferation, shift by 2G customers to 3G services, and high data usage, especially of over-the-top applications such as Viber, Skype and WhatsApp, by existing 3G users. The expansion of 3G or HSPA networks as well as improvement in network coverage and capacity has resulted in better user experience, leading to a higher usage of data services and growing data traffic.

As a result of the maturity of the 3G device ecosystem, HSPA and HSPA+ technologies have become the most dominant in the wireless broadband domain. According to 4gamericas, around 572 HSPA and 384 and HSPA+ commercial networks have been launched globally in around 213 and 164 countries respectively. As of December 2014, the two technologies had a total subscriber base of 1.8 billion.

One of the biggest drivers of 3G service usage is the rapid expansion of HSPA networks, especially in non-mature markets such as Asia, Central and Eastern Europe, Latin America and Africa. While the initial roll-out of the 3G network started slowly, its deployment has been fast-tracked as a result of better monetisation of data services, which has encouraged operators to earmark a substantial capex for 3G network augmentation. Operators have been upgrading and ramping up their HSPA networks to keep pace with the growing data traffic. For instance, Malaysia-based telecom operator U Mobile is planning to install 1,000 3G sites by the end of 2015. Similarly, Airtel Kenya has recently invested KES 2.5 billion in upgrading its 3G network for better indoor coverage and quality of service.

Further, spectrum liberalisation in most countries has led operators to start using multiple bands for offering 3G services on HSPA networks. However, due to ecosystem constraints, 900 MHz and 2100 MHz frequency bands have found the maximum favour in the industry for providing 3G services. In fact, many operators are now combining spectrum in both the bands using dual carrier aggregation technology to offer improved service experience and higher access speeds.

However, in most mature markets, where operators are aggressively ramping up their networks to support the rising data traffic, long term evolution (LTE) is rapidly displacing 3G as the dominant wireless broadband technology. For instance, US-based operators AT&T and Verizon Wireless have reportedly completed LTE network deployment in 99 per cent of the coverage areas. Meanwhile, Japan and Western European countries have been witnessing rapid 4G installations.

tele.net takes a look at the 3G markets across different regions…

Latin America

Latin America has emerged as one of the fast-growing regions in the telecom industry, with a rapid increase in the adoption of mobile broadband services over the past two years. According to Global System for Mobile communication, 3G subscriptions in the region increased from 22 per cent at the end of 2012 to 39 per cent in the third quarter of 2014. In Latin America, the Brazilian telecom market has the highest proportion of 3G customers at over 50 per cent while coverage is provided to over 90 per cent of the country’s population. In the past one year, the majority of operators in the region have been filling coverage gaps through the installation of new base transceiver stations. In order to provide better 3G services, the Argentine government has allotted more spectrum to telecom operators, while the Colombian government has announced 3G spectrum auction to be held in 2015.

Though 2G continues to be the dominant radio access technology in the region, WCDMA/HSPA is expected to take the lead soon. According to Ericsson, the 3G subscriber base in Latin America is expected to reach 65 per cent of the total user base in the region by 2020.

Asia

Asia has been the fastest-growing region in the telecom domain, led by mature markets like South Korea and Japan and supported by some of the largest markets like China. While the mature markets have already deployed LTE networks and are conducting trials for 5G technology, the emerging markets of China, Thailand, Indonesia and the Philippines are still witnessing expansion in 3G network coverage. According to Ericsson, WCDMA/HSPA will be the leading radio access technology in Southeast Asia by 2017, replacing EDGE, the current dominant mobile broadband technology. While Indonesia, the Philippines and Vietnam have less than 30 per cent of HSPA connections, Malaysia and Thailand have 50-60 per cent of the total subscribers using 3G services. Although operators have commenced 4G roll-out in these countries, 3G network expansion will remain an integral part of operators’ strategy. Meanwhile, underpenetrated markets such as Cambodia and Laos will continue to witness 3G network deployments as customers shift from their existing GSM/EDGE connections.

The Middle East has also seen massive growth in 3G network deployment due to the significant increase in data traffic. In fact, the region exhibited the highest growth rate in data traffic during 2014. In such a scenario, the region is likely to witness significant deployment of 4G networks as operators will be eager to cash in on the considerable rise in data usage.

Africa

Africa is one of the least penetrated regions in the world in terms of network coverage with most users still using feature phones and GSM or EDGE connections. While some operators have started deploying 4G networks, HSPA may continue to dominate the mobile broadband market in the near future. In fact, most operators are currently expanding and upgrading their networks to support 3G technologies in order to serve the growing bandwidth needs of customers. For instance, Safaricom has recently selected Nokia Networks to expand its 3G network in Kenya. Similarly, Vodacom, a subsidiary of the Vodafone Group, has earmarked an investment of ZAR 1 billion for upgrading telecom infrastructure in Gauteng, the majority of which will be invested in 3G network upgradation.

Conclusion