The Future of the Global Wireless Industry: scenarios for 2007-12

• Voice telephony - how trends such as price competition and regulation, fixed-mobile substitution and VoIP will affect the usage of, and revenue from, voice services on wireless networks.
• Non-voice services - the evolution of the wireless service mix, the extent to which mobile operators will have to diversify their service offerings (for example, to include fixed services) and the extent to which they will become low-margin data pipes.
• Technology deployment - the future role of an increasing range of technologies, including IMS, HSPA+, CDMA2000 EV-DO Revision A/B, 3G LTE, WiMAX and dedicated broadcasting technologies, as well as the impact of indoor base stations and network sharing.
• Industry structure and competition - the role of MVNOs and network-independent service providers, the ability of mobile operators to maintain their dominance of the value chain and the extent of future consolidation.
• The relative growth of developing and developed markets - the extent to which revenue growth will continue in developed markets despite mobile penetration saturation, and the extent to which industry growth will shift from developed to developing markets.

• What are the major emerging trends that could have a major impact on the wireless industry?
• How could the global wireless industry evolve during the next five years?
• What impact will each scenario have on the major players in the wireless industry?
• What actions should mobile operators, handset and infrastructure vendors, and other organisations take now?

• Mobile/wireless network operators: senior executives, business planners and technologists, to understand how the global wireless industry may evolve, the possible consequences for mobile operators and the actions they need to take.
• Wireless infrastructure and handset/terminal vendors: senior executives and product managers, to understand how the global wireless industry may evolve, the opportunities and threats for equipment manufacturers and the actions they must take.
• Financial analysts and investors: to understand how the global wireless industry may evolve, and how it will affect the success or failure of industry players.

0 Summary

1. Organisations must be ready to deal with increasing uncertainty and change in the wireless industry

2. Major uncertainties in the wireless industry could lead to very different outcomes

2.1 Five key factors will influence the wireless industry’s future

2.2 Voice telephony is the dominant source of mobile ARPU, but a number of developments will influence its future

2.3 The potential of mobile non-voice services is unproven, despite mobile operators anticipating significant growth

2.4 Mobile operators are faced with a bewildering array of technology options for delivering services to end users

2.5 Organisations from outside the wireless industry could have a major influence on mobile services

2.6 Developing markets may offer greater growth prospects than developed markets in the next five years

2.7 Three plausible scenarios have been defined for the future evolution of the wireless industry

3. Scenario 1: Emerging Markets Thrive

3.1 Limited growth prospects in developed countries drive organisations to focus on developing markets

3.2 The ‘Emerging Markets Thrive’ scenario involves a major change of focus, but can have significant benefits for some

3.3 Failure to achieve growth in non-voice services in developed markets will be an early indicator of this scenario

4. Scenario 2: Cellular Goes Indoors

4.1 The indoor environment becomes the focus for the wireless industry

4.2 The ‘Cellular Goes Indoors’ scenario is very positive for organisations that can adapt quickly to the new environment

4.3 Successful early deployment of indoor base stations will be a key indicator of this scenario

5. Scenario 3: Low-cost Data Pipes

5.1 Mobile operators suffer dramatic declines in data pricing and lose control of the services carried on their data pipes

5.2 The ‘Low-cost Data Pipes’ scenario is bleak for many mobile operators, but has many opportunities for other organisations

5.3 Increasing availability of uncapped-usage data packages will indicate increased likelihood of the ‘Low-cost Data Pipes’ scenario

6. A number of core themes will be fundamental to the wireless industry's future

6.1 Organisations must prepare for different futures

6.2 A key factor in the evolution of the wireless industry is the extent to which indoor base stations will be deployed

6.3 Investment, diversification and experimentation may all be required to achieve success

6.4 Industry players need to prepare for consolidation

6.5 Changes in wireless industry structure and ownership could bring different brands to the fore

6.6 Operators and vendors need to innovate more on costs

6.7 Operators should seize the opportunities in developing countries now

Actions

Figures and tables

Table 0.1: Main attributes and implications of the three scenarios

Figure 2.1: The proportion of total ARPU attributed to voice services for selected operators, 4Q 2006

Figure 2.2: The proportion of outgoing voice traffic in Western European countries that was mobile-originated, 1Q 2004, 1Q 2005 and 1Q 2006

Figure 2.3: Changes in mobile voice usage and mobile voice spend from 2004 to 2006 in selected countries

Figure 2.4: Non-voice ARPU for selected mobile operators, 1Q 2005 to 4Q 2006

Figure 2.5: Non-voice ARPU breakdown for selected mobile operators, 4Q 2006

Table 2.1: Comparison of revenue per megabyte for a number of non-voice services

Table 2.2 Emerging wide-area wireless access technologies and their impact on the wireless industry

Table 2.3: Mobile subscriber growth and penetration in selected developed and developing countries, 2000-5

Table 3.1: Voice telephony trends in developed markets in the ‘Emerging Markets Thrive’ scenario

Table 3.2: Non-voice service trends in developed markets in the ‘Emerging Markets Thrive’ scenario

Table 3.3: Technology trends in developed markets in the ‘Emerging Markets Thrive’ scenario

Table 3.4: Market structure trends in developed markets in the ‘Emerging Markets Thrive’ scenario

Table 3.5: Developing market trends in the ‘Emerging Markets Thrive’ scenario

Table 4.1: Voice telephony trends in developed markets in the ‘Cellular Goes Indoors’ scenario

Table 4.2: Non-voice service trends in developed markets in the ‘Cellular Goes Indoors’ scenario

Table 4.3: Technology trends in developed markets in the ‘Cellular Goes Indoors’ scenario

Table 4.4: Market structure trends in developed markets in the ‘Cellular Goes Indoors’ scenario

Table 4.5: Developing market trends in the ‘Cellular Goes Indoors’ scenario

Table 5.1: Voice telephony trends in developed markets in the ‘Low-cost Data Pipes’ scenario

Table 5.2: Non-voice service trends in developed markets in the ‘Low-cost Data Pipes’ scenario

Table 5.3: Technology trends in developed markets in the ‘Low-cost Data Pipes’ scenario

Table 5.4: Market structure trends in developed markets in the ‘Low-cost Data Pipes’ scenario

Table 5.5: Developing market trends in the ‘Low-cost Data Pipes’ scenario

Table 6.1: Main attributes and implications of the three scenarios