Even as the global telecom industry copes with a number of key issues, including the economic downturn, saturation of developed markets and spectrum concerns, mobile subscriber growth continues unabated with emerging markets leading the way. It is expected that in 2011 there will be over 5 billion mobile subscribers worldwide.

3G subscriptions have also been growing at a healthy clip over the past few years and accounted for approximately 13 per cent of the global mobile subscriber base in early 2010, with over 888.08 million subscribers. According to analyst firm Analysys Mason, 3G networks and mobile data services are likely to sustain the worldwide telecom market, ensuring growth at a 6 per cent compound annual growth rate (CAGR), to reach $2.4 trillion in revenues by 2013. This is because the business case for 3G is building around the world and most 3G deployments now roll out smoothly in contrast to the problems experienced in early years.

On the technological front, WCDMAbased 3G technology will dominate the global 3G market by constituting over 53 per cent of the total 3G subscriber base.With 3G technology gaining momentum across the globe, the number of 3G subscribers is anticipated to grow at a CAGR of around 13 per cent between 2010 and 2013.Meanwhile, operators continue to upgrade their existing 3G networks.

The growth in this segment is primarily driven by the demand for mobile internet. In addition, the prices of 3G handsets are declining with 3G handsets now being available for less than Euro100. Yet another catalyst that is going to play a key role in boosting 3G adoption is the variable pricing plans with 3G data services which operators are increasingly offering.

On a region-wise basis, the Asia-Pacific is likely to dominate the global 3G subscriber base by the end of 2013, accounting for around 56 per cent of the total subscriber base followed by Europe, the Middle East and Africa, and the Americas. The main reason for the dominance of the Asia-Pacific region is the expected high adoption of 3G technology in countries like India and China, which have extensive mobile subscriber bases.

Moreover, government support and operator initiatives will help to expand the 3G subscriber base in the Asia-Pacific region.

Europe

With over 200 million 3G users in Europe at present, up from a little over 100 million in June 2008, growth in this region has been exceptionally strong and has gained momentum over the previous few years (post-2005). This trend is likely to strengthen over the next few years with 3G subscriptions expected to exceed 300 million by the end of the year. 3G penetration rates in Western Europe have been pegged at 33 per cent and are likely to reach 50 per cent. Spain leads the way with as much as 56.5 per cent penetration, according to BMI estimates. The UK comes next with 37 per cent, while France and Italy follow with approximately 26 per cent penetration rates.

Mobile subscribers in this region have clearly been receptive to 3G after years of false starts. In the UK, the 3G segment grew from 17 per cent of the total mobile market in 2007 to a BMI estimate of 28.9 per cent at the end of 2009; it is likely to account for 50 per cent of the country's mobile market by 2014.

The main factors driving the growth and success of 3G in Western European markets include regulatory environments that have promoted competition among operators and a rising consumer demand for more robust wireless data services, stoked by the evolution of smartphones and other multimedia devices. The decline in the cost of signing up to a 3G network, fuelled by increased competition in the telecom market, is also attracting new subscribers.

However, 3G has also suffered setbacks in some markets. For instance, the proposed licensing of a fourth operator in France with the potential for deploying 3G networks has been dogged by political controversy.

Meanwhile, the Eastern European region also represents strong growth potential with approximately 30 million 3G subscribers and a penetration of only 7 per cent.

The fast growing number of 3G subscriptions is most pronounced in markets like Poland and Romania, where operators are heavily promoting 3G devices and have been leveraging the popularity of social networking. Mobile operators in Poland (Play) and Romania (Orange and Vodafone) are among the seven largest 3G operators in Eastern Europe in terms of connections.

In Russia, the largest market in Eastern Europe, the key players (MTS, VimpelCom and MegaFon) received 3G licences in April 2007 and began rolling out networks in 2008. All these operators will begin seeing an increase in data traffic and, subsequently, revenue.

Asia-Pacific

The Asia-Pacific 3G market has gained significant growth momentum over the past few years. Including the world's most technologically advanced nations such as Japan and South Korea as well as the fastest growing and most populated economies such as India and China, this region clearly presents a bright future for 3G.

Known as the poster child for 3G, Japan has been at the forefront as far as 3G technology development, network build and commercialisation are concerned. With one of the largest 3G subscriber bases in the world (over 100 million), the country's progress in the 3G space has been impressive. However, this is likely to change over the next five years.With 3G penetration at over 80 per cent, the technology now only has a limited pool of late adopters to target. This combined with an annual growth rate of less than 4 per cent across all wireless subscribers, indicates that the market is close to saturation vis-à-vis other markets which have plenty of growth potential.

In China, since the issuance of the first three 3G licences in early 2009, the number of 3G subscribers has been consistently rising. The number of 3G users in China exceeded 10 million at the end of 2009 and is projected to reach 80 million by 2010.The phenomenal expansion of subscribers has been driven by the rapid development of 3G networks. 3G licence holders invested approximately $21 billion in building infrastructure last year. At the forefront of China's 3G spending are the country's three major wireless carriers –­ China Telecom, China Mobile and China Unicom.

However, according to a research analyst at RNCOS, Chinese operators will need to work harder for grabbing a major chunk of the 3G market. Low tariffs and easy availability of low-cost 3G handsets could be an appropriate road map for Chinese operators in the future.

Meanwhile, in India, 3G spectrum auctions are under way and are likely to be completed soon, leading to additional operators and more competition in this segment (earlier only the state-owned incumbents were providing these services).

North America

In North America, the national providers have been accelerating their efforts to bring 3G to the market in recent years. In Canada, Bell Mobility and Telus launched 3G via a shared HSPA+network in late 2009, in anticipation of the revenue potential from the 2010 Vancouver Winter Olympics. Meanwhile, in the US, there has been a rapid uptake of 3G services with penetration at over 40 per cent, up from 28 per cent in 2008. By 2011, the US is expected to overtake Japan in terms of 3G subscriptions –­ primarily due to a larger population. Among the operators, Verizon Wireless has led the pack while T-Mobile is slowly expanding its 3G coverage. The growth in 3G and smartphones is likely to offset some of the downward pressure on data revenues and overall ARPU.

Going Forward

Even as 3G subscriptions continue to climb north, operators are now moving towards the process of deploying 4G networks. 4G deployment plans have gained considerable momentum as the number of mobile operators committed to deploying LTE advanced mobile broadband systems has increased more than twofold in the past year.According to the Global Mobile Suppliers Association (GSA) report, there are now 64 operators committed to LTE network deployments in 31 countries compared to 31 network commitments in the previous year.

LTE systems were commercially launched in December 2009 in Norway and Sweden and are now being installed or are planned for commercial service in countries like Australia, Austria, Brazil, Canada, China, France, Germany, Hong Kong SAR, Japan, South Korea and the US.

GSA forecasts that up to 22 LTE networks will be in commercial service by end-2010, and expects this figure to grow to 39 or more LTE networks, commercially launched by the end of 2012.

While 3G (HSDPA and HSPA+) systems are meeting the challenge to deliver higher data capacities today, LTE brings the opportunity for additional spectrum, more capacity and lower cost, and is essential for taking mobile broadband to the mass market. Even as LTE begins to make its way into mature and developed markets, 3G subscriptions will continue to witness robust growth, propelled by the strong demand for mobile broadband.