Driven by the need for 24x7 connectivity – the biggest advantage of mobility – the global mobile broadband subscriber base overtook the number of wireline broadband subscribers in 2010 (558 million as against 500 million). While the fixed broadband segment continues to grow due to its ability to serve high-bandwidth applications like VOIP and IPTV, wireless broadband is likely to grow at a faster pace, driven by the increasing demand from mobile phone users (5 billion as of June 2011).
Wireless broadband
With an increase in 3G network deployment, upgrades to HSPA networks and growing smartphone adoption, global mobile broadband uptake has taken off in the past few years.
HSPA and HSPA+ (part of the GSM family of technologies) have become the dominant global mobile broadband technologies. According to the GSM Association (GSMA), operators across the world have invested more than $70 billion in mobile broadband infrastructure and network upgradation, creating strong momentum for HSPA and paving the way for LTE. Global HSPA-based mobile broadband connections are estimated to have touched 500 million in June 2011. According to the GSMA, about 19 million HSPA connections are being added every month and there will be 1 billion HSPA connections by end-2012.
With several large players selecting LTE as the future broadband platform, the technology would grow rapidly over the next few years. The LTE user base is expected to increase from 4.2 million connections in 24 countries at end-2011 to almost 300 million connections in 55 countries by 2015.
Going by the global trends, major telecom players are expected to invest about $100 billion in technologies like HSPA, HSPA+ and LTE.
The global rollout of HSPA+ and LTE networks will play a key role in the evolution of cloud-based applications and services. As of December 2010, more than 2,900 devices manufactured by 200 companies supported HSPA and there were 341 active HSPA networks across 132 countries. Moreover, HSPA can be upgraded to HSPA+, enabling peak speeds of 21-42 Mbps. With additional spectrum, HSPA+ can even reach peak speeds of 84 Mbps. According to market research firm Wireless Intelligence, there are 76 HSPA+ networks deployed in 43 countries, while another 52 networks are planned.
Device availability, regulations and pricing are the key factors that will impact growth. According to Wireless Intelligence, the Asia-Pacific region will account for 43 per cent of LTE connections by 2015, but the growth will be initially driven by developments in North America and Western Europe.
While the GSM family of technologies would witness increased deployment in the future, Wi-Max, another broadband access technology, has been losing ground since the introduction of LTE. Several large global operators, which had committed to Wi-Max, are now planning to migrate to LTE technology. For instance, US-based wireless broadband network operator Clearwire will commence the rollout of a network based on LTE technology after pioneering the rival 4G system, Wi-Max. It is the only company in the US to deploy a commercial network using Wi-Max, but has now decided to move to LTE, thereby weakening the case for Wi-Max. Sprint, another US-based operator, has also selected LTE for its 4G network rollout. Moreover, Global Mobile, a Taiwanese Wi-Max operator, is considering a shift to LTE after 2012.
Wireline broadband
According to ABI Research, the number of global fixed broadband subscribers (DSL, cable, PON, Ethernet FTTH, FTTB+ LAN, etc.) crossed 539 million in June 2011, an 8 per cent increase over the previous year, with the highest net customer additions in emerging markets.
The number of customers using high- bandwidth services such as video streaming and online gaming is increasing. Service providers need to offer more bandwidth due to the huge IP traffic generated by these services. Broadband operators are, therefore, expanding optic fibre-based coverage, which can best serve these bandwidth-hungry services. For example, China Telecom is deploying optic fibre, and plans to serve 100 million households and 30 million FTTH subscribers by end-2015.
Currently, North America has the highest optic fibre broadband penetration followed by the Asia-Pacific region. Fibre-based broadband not only increases speeds but also facilitates the rollout of services like video-on-demand, VOIP and IPTV. ABI Research estimates that the number of optic fibre-based broadband subscribers will more than double by 2016 to 142 million from 69.6 million in 2011.
The Asia-Pacific region is witnessing strong subscriber growth, especially due to the increasing number of subscribers in China. The country has recorded user additions of about 17 million since the second quarter of 2010.
Low service penetration in countries like India and China would ensure the growth of the Asia-Pacific broadband market in the medium term.
Therefore, while fixed line broadband services will continue to grow, driven by factors like superior quality of service, higher throughput and applications like IPTV and VOIP, it is mobile broadband that is really the way forward.