FORECASTS

This WiseHarbor publication forecasts the long-term outlook in mobile operator services, network equipment and devices to 2025. Particular consideration is given to the mobile broadband technologies, including LTE, which will be most prevalent in the coming years as mobile devices become the primary or only means of Internet access for half the world's population by 2020. Detailed figures are provided for the developed regions of North America, Western Europe and Japan with totals for all other regions.

Wiseharbor's integrated forecasts surpass other published forecasts because they:

• Operator services, with forecasting of revenues, subscriber connections and data traffic.
• Infrastructure with forecasting for operator capital expenditures, network equipment sales, and with geographic breakouts for radio access network equipment technology.
• Phone and non-phone devices with forecasts including segmentation between these categories, 3G/4G versus 2G technologies and between embedded and discrete devices.

WiseHarbor's new forecasts are ideal for long-term and strategic decisions on mobile technology transitions, spectrum auctions, patent purchases and company acquisitions.

Methodology

Previous adoption cycles provide significant guidance on likely future developments. Although the sizes of mobile technology markets have expanded enormously with successive generations of network technology: for example, with 1 million, 10 million and 100 million device sales milestones being reached more rapidly with later technology generations, the time from launch to peak sales volumes has been remarkably consistent for the leading technologies. Peak sales of network equipment tend to lead device sales by a couple of years. Peak subscriber figures are reached even later.

Mobile Technology Adoption Lifecycles – From Launch to Peak Demand

Figures for 2009 and 2010 are WiseHarbor estimates based on historic sales in units, revenues and average selling prices derived from a variety of industry sources. Forecasts are based on these figures, historic market diffusion patterns, technology substitution factors, expected spectrum availability, population growth rates, economic principles such as elasticity of demand to pricing, expected GDP growth, inflation and other factors. WiseHarbor considers interdependencies between network technology deployments by operators, devices sales and consumer usage in its forecast modeling. Forecasts are formulated with the judgment of Keith Mallinson, Founder of WiseHarbor, with 25 years global experience as an industry analyst and market forecaster in wireless and mobile communications.

Mobile networks and devices are increasingly multimode. For example, whereas forecasts show the GSM Family of technologies (i.e., including GPRS and EDGE) will decline in coming years, a large proportion of devices will include GSM with other technologies for many years. WiseHarbor follows the convention of defining the technology of a device by the most advanced technology included.

Findings

WiseHarbor reaffirms forecast findings published one year ago that LTE will be as successful as the leading cellular technologies that preceded it with LTE-TDD precipitating the demise of WiMAX which will peak by 2015. Mobile broadband will do for Internet connections—averaging several gigabytes usage per month by 2020—what 2G has achieved over the last 15 years in providing voice and text communication to more than half the world's population with 5 billion connections including those with multiple subscriptions. Forecast findings also include:

1. Cellular will maintain its stellar growth because it is the cheapest, most convenient and pervasive means of connecting people. Increasing demand for mobile broadband and new types of devices will make up for saturating demand and price erosion in mature phone markets with voice and SMS. Two-sided operator charging, of content providers as well as end users, will become the norm.
2. Mobile device sales will grow from 1.6 billion units in 2010 to 3.9 billion in 2025 including phones, new personal devices such as tablets and a wide variety of machines, such as cars and utility meters, which have previously been mostly unconnected. Handset revenues will flatten, approaching 2015, following current buoyancy in average selling prices and the smartphone surge. Total global mobile connections in service will rise to 21.5 billion (2.7 per head of population) by 2025.
3. While data traffic grows more than 1,000-fold, operator revenue yield per megabyte will decline dramatically from $100 with SMS, $1 in voice and $0.10 with mobile data in 2010 to $0.001 with data predominating in 2025 (global averages including postpaid and prepaid plans).
4. LTE is set to become the leading technology by around the end of the decade with WCDMA-based HSPA Evolved technologies remaining very strong in the marketplace. GSM and CDMA will also continue beyond 2020. Mobile operator equipment expenditures will increase at an annual average of 3.3% net of inflation, with most growth in developing regions.

Deliverables Include:

Excel workbook including WiseHarbor forecasts

Data tables

Description of methodology, forecasting assumptions and key findings

Licensing & Pricing

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