Mobile Broadband Sales To Hit $137 Billion In 2014

Emerging markets will drive most of the growth, according to new research.

Annual mobile broadband sales will more than quadruple in the next five years, growing from the current $24.9 billion to $137 billion in revenue in 2014, according to a forecast released Wednesday.

Ovum, a global advisory and consulting firm, said that more than 2 billion people would use mobile broadband by 2014, but user growth will outpace revenue growth. That means the average revenue per user will drop, the company said.

By 2014, 258 million people around the world will access mobile broadband services through laptops with USB modems, data cards, or embedded mobile modules, Ovum said. The number of 3G and 3G+ technology users will grow from 181 million to more than 2 billion.

Steven Hartley, senior analyst at Ovum who authored a report on the subject, said the growth is "staggering." "Operators can also expect a similar growth rate for handset users of mobile broadband services, but starting from a much larger existing base," Michele Mackenzie, principal analyst at Ovum and co-author, said in a statement.

The company said that even mature markets will show "recession-busting growth," but emerging markets will fuel most of the growth. Forty percent of all mobile broadband laptop users will come from the Asia-Pacific region in 2014, Ovum said. In China, there will be 52.5 million laptop users versus 325 million handset users.

"The advent of 3G in markets such as China and India, the sheer number of mobile users, and poor fixed-line penetration in these markets means that broadband access to a very large number of people will be purely mobile," a company statement said.

Globally, revenue will grow at 44% of the rate of user growth because much of the mobile broadband growth in emerging markets does not provide corresponding revenue growth. In 2008, the Middle East, Africa, and South and Central America contributed 3% of global revenue and that will likely rise to 9% by 2014, Ovum said. Prepaid fees that encourage adoption in mature mobile and fixed broadband markets can boost users but decrease average revenue per user, and increased competition will also lower prices, Ovum said.

"Several operators have touted the idea of plugging the ARPU decline with value-added services, yet we are yet to see anything sufficiently compelling in either the laptop or handset space," Mackenzie said.

While the flow of data and demand on the networks increases, network quality will become an increasingly important service differentiator, Ovum said.

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