As per the World Telecommunication Indicators Database of the International Telecommunication Union by end-2011, over 159 countries worldwide had launched 3G services commercially and the number of active mobile broadband subscriptions had surpassed 1 billion. Driven by superior data speeds, improved access to multimedia services and last mile connectivity, 3G is being increasingly deployed by operators worldwide. While 3G has matured in many developed economies, mobile broadband uptake in several emerging markets is still driven by this technology. Further, the increasing availability of affordable smartphones and tablets in these markets is enabling users to adopt 3G services.
Service deployment
The first 3G network was launched nearly a decade ago. At that time, 3G deployments were characterised by high costs and were offered on the WCDMA standard. Since then, operators across the world have deployed these services on a variety of bands and standards including WCDMA, CDMA2000, TD-CDMA, and TD-SCDMA. They have spent billions in establishing 3G offerings and the expenses incurred have been compensated by the growing demand for mobile multimedia services, internet applications and improved voice quality.
According to the Global mobile Suppliers Association (GSA), as of April 2012, a total of 202 commercial HSPA+ networks had been launched in 100 countries. Of these, 118 commercial networks support a peak downlink data speed of 21 Mbps using 64 Quadrature amplitude modulation, seven commercial networks support 28 Mbps peak downlink data speed and 77 commercial networks support 42 Mbps DC-HSPA+. Another 55 HSPA+ networks are under deployment or at the planning stage, of which 25 would be DC-HSPA+ networks. GSA forecasts that at least 100 DC-HSPA+ networks will be in service by end-2012.
By end-2011, there were 625.7 million CDMA2000 subscribers (as per a report released by the CDMA Development Group) and over 208.8 million
EV-DO subscribers worldwide. The year witnessed a net addition of 51 million subscribers, of which 46.3 million were EV-DO subscribers, reflecting a strong demand for mobile broadband services. Asia contributed the major share of this growth in subscribers and was followed by North America, Europe and the Middle East. Today, there are 331 commercial CDMA2000 operators across 122 countries.
Japan is the global leader in terms of 3G uptake, followed by Sweden, Spain and Australia. European countries are ahead of the US in the deployment of 3G technology. The Asia-Pacific region (including Japan) represents one of the fastest growing regional 3G/3.5G markets, which had over 381 million 3G subscribers by mid-2011. The growth in the market is primarily driven by the increasing adoption of 3G-enabled handsets and the rising demand for high-bandwidth mobile multimedia services in the region, particularly in emerging markets.
While the growth in the Asia-Pacific 3G market over the past few years was driven primarily by large-scale deployments in Japan, the dynamism is now clearly shifting towards China and India. China has witnessed a significant uptake in 3G services since their launch in 2009. The country had almost 136.6 million 3G users by end-January 2012. Smartphone sales in China rose sharply, driven by the faster mobile internet access offered by 3G services. Meanwhile, Thailand rolled out its 3G services last year and expects high service uptake. Pakistan is also likely to auction 3G spectrum by end-2012.
A strong growth in subscriber numbers and operator revenues is expected over the next five years as several other emerging markets finalise their 3G network deployments that aim to provide full-scale national coverage. The key players dominating the Asia-Pacific 3G marketplace include China Mobile Limited, China Telecom Corporation Limited, China Unicom (Hong Kong) Limited, KDDI Corporation, NTT DOCOMO, SK Telecom and Vodafone Group Plc.
The Middle East and North African region is also fast emerging as a favourable market for 3G deployments, and is likely to witness enhanced network roll-outs over the next three to four years. The region expects its 3G connections to reach 363 million by 2016. It would also witness a surge in affordable (below $100) 3G smartphones as the demand for these services grows.
3G ecosystem
The global 3G deployment experience indicates that a well-developed ecosystem plays a crucial role in the widespread adoption of this technology. Appropriate pricing and service quality, device accessibility and affordability as well as relevant content are the key factors that contribute significantly towards higher 3G service uptake. Japan witnessed widespread 3G adoption due to the innovative data plans and relevant content offered by operators in the country. Korean operators have now begun implementing consumer-oriented services to increase data usage. Globally, operators have used mobile broadband, handset-based data access and applications/services on 3G to improve the non-voice contribution to ARPUs.
Smartphones proliferation worldwide is on the rise and operators have added a significant number of data devices in their product portfolios alongside traditional handsets. Operators are increasingly promoting handsets that can support multiple technologies. As a result, there has been a significant decline in the number of WCDMA-only devices in operator portfolios as these are being replaced by HSPA-enabled devices. As per the forecasts by Parks Associates, over 68 million of the 126 million tablets sold worldwide in 2015 would support 3G or 4G technology.
Higher 3G mobile service adoption also provides a platform for building a sustainable market for applications and mobile advertising. Location-based services are the most popular with international audiences. However, subscribers face certain issues while making international calls. Given the absence of ubiquitous 3G connectivity, users often encounter 3G blackspots and poor signal reception.
Manufacturers of 3G-enabled devices and chip sets like Qualcomm, Alcatel-Lucent, Ericsson, Nokia Siemens Network, ZTE, Samsung Electronics, Telefonaktiebolaget LM and Huawei have benefited from the increasing uptake of 3G services. As per Strategy Analytics’ research, global handset shipments grew 13 per cent annually to reach 361 million units in the second quarter of 2011. Further, the growing demand for data services on 3G networks has led to revenue growth for companies offering mobile multimedia gateways, and specialised routing and switching equipment. Cisco and Huawei are the market leaders in terms of mobile internet infrastructure, with Nokia Siemens Networks, Ericsson, ZTE, Juniper and Alcatel-Lucent following closely.
The way ahead
Various global research firms have estimated the number of 3G/3.5G subscribers worldwide to cross 4 billion by 2017. Robust demand from emerging markets also offers huge potential for global 3G uptake. This growth will be driven by factors such as rising demand for high-bandwidth multimedia services, increasing penetration and adoption of 3G-enabled devices, and continued 3G network roll-outs.
However, even as 3G subscriptions continue to grow, operators’ 4G networks and long term evolution (LTE) technology deployment plans have gained considerable momentum. LTE brings in the opportunity for additional spectrum, more capacity and is essential for taking mobile broadband to the mass market. The US market has seen a rapid uptake of LTE-based services as against 3G service uptake in the country, which was not satisfactory during the initial stages of service deployment.
In future, the bulk of growth in LTE services is also expected from Asian countries such as China, Japan and South Korea. According to TeleGeography’s GlobalComms Database, there were 39 live LTE networks worldwide by mid-November 2011. The number of LTE deployments will rise rapidly over the next two to three years, given that about 170 operators across the globe are already running trials, or have expressed interest in LTE as they await spectrum auctions.
However, there is still time for mass adoption of 4G services and, till then, 3G subscriptions will continue to witness robust growth, driven by the strong demand for mobile broadband.