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News
Issue #2003 - 27 (October 2003)
(Updated Oct. 22, 2003)

INFRASTRUCTURE, PRODUCTS & SERVICES

3G News This Week

Source: 3G website newsletter, Fiercewireless and others

1. Yankee Group Says - The Asia-Pacific region has buckled the global trend of declining telecom growth for the last several years.  

The Yankee Group report, "2003 Asia-Pacific Mobile User and Revenue Forecast Sees Strong Growth for Data," projects the regional user base will grow from 436 million in 2002 to 773 million in 2007, at a CAGR of 12.2 percent through the forecast period.

Emerging markets such as India and the surging popularity of prepaid subscriptions will fuel much of this growth. "The opportunities for growth in Asia continue to come from new network deployments in emerging markets, with a great deal of growth projected for China and India," says Shiv Putcha, Yankee Group Wireless/Mobile Asia-Pacific senior analyst. "However, operators and regulators in the Asia-Pacific region are showing overt caution while unfavorable economic conditions persist. The momentum toward 3G in Asia, for example, has stalled or is being reassessed.

"The Yankee Group also projects service revenue will grow from $121 billion in 2002 to $227 billion in 2007, at a CAGR of 13.4 percent. Although voice revenue will be flat, mobile data revenue will grow strongly, at nearly 41 percent CAGR. The Yankee Group believes, however, that the region has dealt with many of its 3G growth problems and there are positive signs of 3G momentum. Even operators without 3G licenses have announced or are contemplating alternative scenarios, typically involving deployment of EDGE networks.

2. CDMA Development Group says - 3G CDMA2000 gives more revenue - ARPU

The CDMA Development Group announced that third-generation (3G) CDMA2000(r) dominates in data services, measured by the number of subscribers, the broad range of advanced applications it supports, and the increased revenue it generates for operators.

There are more than 54 million CDMA2000 subscribers worldwide who have access to high-speed data services. According to the EMC Worldwide database, CDMA2000 subscribers account for more than 55 percent of data users worldwide.

3G CDMA2000 subscribers generate significantly higher revenue - up to 50 percent more than 2G subscribers. Because CDMA2000 can support a compelling array of data services, these offerings account for the vast majority of this increase. Some operators report that data revenue from their CDMA2000 1xEV-DO subscribers has increased by as much as 1,100 percent compared to their 2G subscribers, which represents 30 percent of the total revenue generated by these 3G subscribers. 
"Data services are becoming an important revenue source for operators, and CDMA2000 is already delivering positive results for them," said Perry LaForge, executive director of the CDG. "Capitalizing on the high-speed data capabilities of CDMA2000 and a large selection of handsets with enhanced functionalities, operators are able to introduce a broad range of advanced multimedia services that stimulate consumer demand and generate significant revenue. For some CDMA2000 operators, data revenue nearly doubled in 2Q 2003 as compared to last year. This trend will continue as more subscribers migrate to CDMA2000 and operators introduce more high revenue-generating multimedia services." 
With typical data throughput of 60 to 100 kbps on CDMA2000 1X networks and 300 to 600 kbps on CDMA2000 1xEV-DO systems, operators can offer a variety of services suited for high data speeds, such as video on demand (VOD), music on demand (MOD), video phone, MMS and TV broadcasting. These revenue-generating services are already becoming very popular. KTF in Korea, for example, reports that VOD is the "killer app" for their subscribers and accounts for 51 percent of all downloads. 

CDMA2000 operators across all major markets reported growing demand for advanced services and significant increases in their data revenues in 2Q 2003.

--SK Telecom (Korea) reported that revenue from data services, such as mobile Internet, text messaging, GPS and e-commerce, surged 91 percent in 2Q 2003 compared to the same period last year. CDMA2000 1xEV-DO subscribers constitute 6 percent of the subscriber base, but they already account for 12 percent of the operator's total revenue.

-- KDDI's (Japan) 3G CDMA2000 subscribers generate 18 percent more in revenue than 2G users, and data makes up 23 percent of their monthly bill.

-- Verizon Wireless (North America) reported that usage of itsGet It Now(sm) service, which offers games, ring tones and other data applications, grew to 2.5 million
revenue-generating downloads per month.

-- Sprint (North America) reported that the number of subscribers of PCS Vision(sm), its CDMA2000 advanced wireless data service, increased in 2Q 2003 to reach 2.1 million users.

-- Vivo, the largest operator in South America, reported a 53 percent growth in its CDMA2000 subscriber base over the past year, while data revenue showed strong growth of 131 percent. "CDMA clearly dominates advanced data market today." continued Perry LaForge, "With poor performance and disappointing uptake of GPRS based services as well as marginal improvements in data rates and very limited handsets availability delivered by EDGE, CDMA will continue to strengthen its leadership in the coming years." 

3. GSM Association Re-Brands 3G (Source CTIA) 
To better define the terminology, the GSM Association is re-naming third generation GSM technology (3G) 3GSM. The association says the 3GSM name better illustrates the natural technology upgrade path from 2G-based GSM to third generation GSM, a route that travels GPRS, EDGE and W-CDMA
Source: Yankee Group, 3G.co.uk site and press releases

4. TeliaSonera Takes EDGE Wireless
Europe : TeliaSonera's Finnish customers can start using the EDGE-technology enabling faster mobile data services. TeliaSonera is also investigating how the technology could be applied in the other Nordic and Baltic home markets. TeliaSonera believes that EDGE will be an important complement to the other mobile technologies, such as the existing GSM, GPRS and WLAN and the future UMTS. EDGE provides extra capacity and improved transfer speed in areas covered by the network. The existing network can be upgraded with EDGE in the course of already planned upgradings.TeliaSonera's Finnish customers can start taking advantage of the EDGE-technology in line with the launch of EDGE-mobiles to the market. And at the same time, TeliaSonera is investigating how EDGE could complement other technologies in the Nordic and Baltic home markets, according to demand."For us, it is important to be able to continue providing our customers with high quality mobile data services, independent of the technical solutions. EDGE accelerates the development of mobile data services and complements other mobile technologies, including UMTS. On the Swedish market, EDGE can be a complement and act as an alternative in certain areas,"says Anders Igel, President and CEO of TeliaSonera. Facts about EDGEEDGE (Enhanced Data rates for GSM Evolution) is a technology that enables packet switched data over the GSM network two to three times faster than the existing GPRS technology. EDGE uses the 900/1800 MHz band and is part of the valid GSM licences possessed by operators. EDGE can be implemented within the existing infrastructure and gives good coverage to a large population. The EDGE technology can be employed via mobile phones that support EDGE.

5. GSA Reports EDGE Deployment is Expanding
The Global mobile Suppliers Association (GSA) reports that 50 network operators have publicly announced their commitment to deploy EDGE technology for delivery of next generation mobile services. EDGE deployments are rapidly expanding throughout the world. In 2003 alone, there has been a huge upswing in interest in the benefits of deploying the technology with compatible devices as a driver. The GSA is convinced that a significant number of wireless operators will implement an integrated EDGE-WCDMA network, which could result in great cost savings, less base station hardware and fewer site splits. 

Source: 3G website newsletter, Fiercewireless and others

MobileInfo Comments and Advisory: Yankee group's forecasts are worth noting. We generally concur with these forecasts. Yankee's forecast of 41 CAGR for wireless data should be heartening to all those service providers and vendors who are waiting for this market to mature. It has taken us a long time but we seem to be getting there.

As far as CDMA group's press release is concerned, it is quite true. But each carrier must evaluate its own path to true 3G and 4G. You have to consider all your baggage before you decide your destination.

Note: This news release may contain forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of Securities Exchange act of 1934 in USA. Similar provisions exist in other countries. There is no assurance that the stipulated plans of vendors will be implemented. MobileInfo does not warrant the authenticity of the information. Readers should take appropriate caution in developing plans utilizing these products, services and technology architectures.  All trademarks used in this summary are the property of their respective owners.


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