45 mln 3G subscribers in 2004, 85 mln by 2005

Global 3G subscribers will grow from an estimated 45 mln at the end of 2004 to 85 mln in 2005, according to Wireless World Forum. Although 2004 has been a year of false 3G expectations outside of Japan and Korea, 2005 could potentially be a good year for 3G in the rest of the world. This, however, will not be the case if operators in Europe and America fail to adopt the 3G policies of seamless migration successfully implemented in both Korea and Japan. Using seamless migration, Japanese operators have managed to subscribe 1 in every 6 of the population, compared to 1.3% in Europe. European uptake has been led by Hutchison 3G whose strategies have failed to vindicate the business model associated with 3G.

Cellular base station market to fall 14.4% in 2004

While 2003 was a transition year for cellular base stations, 2004 is the one where reality will catch up with the vision, according to In-Stat/MDR. The carriers worldwide have started to execute aggressively on plans that had been delayed for years, and customers have even started to show some sign of excitement. In 2004, In-Stat/MDR forecasts that worldwide cellular base station revenue will be down 14.4% from 2003 due partly to price pressures and an increase in spectrum efficiency. However, during this period, the actual number of base stations is forecasted to increase slightly, from 329,483 in 2003, to 333,876 in 2004.

Overall, the trend in new base station deployments from 2003 to 2008 is generally down, although In-Stat/MDR believes that there will be a small upswing in 2008, as more demand for data services starts to emerge. By 2008, W-CDMA will represent 23.1% of deployed base stations, worldwide. And while GSM will represent 61.5%, this is a very impressive showing for W-CDMA, which will have gained wide-scale acceptance in a relatively short period of time. While there are over 15 mln 3G subscribers worldwide, this still only represents 1 subscriber in 100. However this is a good start. In the US, Sprint, Verizon and AT&T Wireless have all started to deploy their 3G services, although, in somewhat limited locations, to start.

3G delays bring to 12% in cellular infrastructure market

The global cellular infrastructure market declined by 12% last year, mainly due to delays in deploying third-generation networks. But there was an upturn in the fourth quarter, according to Gartner. Mobile network operators spent even less in 2003 than in 2002, and investments in radio access, switching, applications and core infrastructure for mobile networks totalled $40 billion, down from $45 billion in 2002.

8 mln 3G users in Europe by 2005

If Western Europe replicates the Japanese adoption timeline, there will be more than 8 mln W-CDMA users in the region by mid-2005 (2.4% of 340 mln). There’s no doubt the two markets are very different; the main difference is the attitude of consumers toward mobile data. However, there are strong reasons to believe the pace of European 3G adoption will equal or exceed Japan’s.

First, most carriers are conducting pre-commercial trials and will launch commercial services in 2004. Carrier pressure on vendors and greater economies of scale will mean better and cheaper equipment, while the lessons of DoCoMo and 3 should help other providers avoid early technical problems.

In addition, there is the lack of competing technologies. Where CDMA and 1X upgrades will compete with W-CDMA in Japan, there is no comparable cellular broadband technology being deployed in Western Europe. Interim or parallel technologies such as EDGE and Wi-Fi have similar characteristics but cannot match the attributes and benefits of W-CDMA.