Mobile broadband booming, downturn could delay LTE until 2013

- Global mobile broadband subscribers increase 84% to 186 million

- US, Japan & Korea dominant but China & India gaining fast

- Economic downturn a key factor delaying LTE takeoff to 2013

The mobile broadband market exploded in the last year, driving big increases in mobile operator data subscribers and revenues, and will play an increasingly central role in the success of the mobile industry, according to Future Mobile Broadband: HSPA and EV-DO to LTE Networks, Devices and Services, a new strategic report from Informa Telecoms & Media.

Mobile broadband has become one of the key growth engines for the mobile industry, with 186 million mobile broadband subscribers worldwide at the end of 2008, up 84% from 101 million at end-2007. By 2013 mobile broadband subscribers will represent almost one-third of total mobile subscribers worldwide.

The mobile broadband boom was triggered by the combination of widespread mobile broadband network coverage, appealing devices such as USB modems and the iPhone 3G, and competitive flat-rate tariffs. Together they have made mobile broadband one of the most important strategic and commercial opportunities in the converging mobile and broadband markets.

At the end of 2008 there were more than 400 commercial mobile broadband networks worldwide supporting thousands of different mobile and portable devices and generating billions of dollars in operator revenues. For many operators, mobile broadband is driving sustained increases in data ARPU. That in turn is key to increasing overall revenues, given ongoing declines in voice ARPU.

The mobile broadband markets in the US, Japan and Korea saw phenomenal growth in 2008, which led the three markets combined to account for the majority of global mobile broadband subscribers by the end of the year. This is changing fast as mobile broadband becomes a mass market service worldwide.

For example, China Mobile's TD-SCDMA mobile broadband service looks ready to gain traction by 2010. Combined with new HSPA, EV-DO and TD-LTE services will drive the country to become the world's second-largest mobile broadband market worldwide in 2013. India will be the fourth-largest market in 2013, following BSNL's launch of EV-DO mobile broadband services in 2008 and BSNL's and MTNL's expected launch of HSDPA services in late 2009.

However, mobile broadband will not be immune from the economic downturn, which will pile the pressure on beleaguered equipment vendors and force some operators to scale back or delay major investments, particularly in next-generation systems such as LTE.

There's no doubt that the downturn will delay LTE deployments, with main operators already citing it as a key factor leading them to push LTE launch dates to 2011-12. Operators such as Verizon Wireless and NTT DoCoMo are committed to launching LTE in 2010, but the economy will still be tough, which could hit roll-out schedules and take-up.

Many operators are also realising that HSPA and HSPA+ upgrades should meet their needs for the next few years, and will cost a lot less than LTE roll-outs. The net result is that the LTE subscribers will not start taking off until 2013.

The overall outlook for the mobile broadband is good. It's already a must-have service for many consumers and businesses, which helps to explain why it will be one of the strongest mobile segments throughout the downturn. We've fully revised all our forecasts in light of the economic downturn, but we're still expecting strong growth through to 2013 in mobile broadband subscribers, device unit sales and operator data revenues.

Mike Roberts, principal analyst, Informa Telecoms & Media

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