A long convoluted discussion and set of data out this week from Chetan Sharma Consulting is well worth a perusal and some thought. It rambles through the oddities of wireless markets and especially wireless broadband, demonstrating the differences between usage and billing over the entire globe.
We won’t try to summarize, for that you should do it yourself here, but some of the conclusions left us wondering if perhaps there was some underlying reason behind all the numbers, which Sharma was missing.
For instance NTT DoCoMo is lauded for having brought wireless data service to life and for making $8 billion in data services revenue in the first half of 2009, saying that this makes up 45% of its overall revenue. Partly this is ascribed to it being early into 3G, but also it came up with some clever ways of using data, very early on.
But in the next breath Sharma talks about Verizon Wireless being about to overtake the now flat data component of NTT. We are left to assume that this is because of the genius of Verizon Wireless, whereas the fact is that NTT lives in a vastly more competitive cellular environment, where it has to move early on everything. Verizon works in a virtual duopoly where each of the two largest cellular operators have a license to print money from the way the regulator (The FCC under president Bush) has behaved, effectively legislating against rivals.
Any comparison between the US and Japan or the rest of the world, and more importantly India and China, needs to make comparisons of ARPU not in dollars, but as a percentage of disposal income or as a percentage of average earnings.
Sharma also makes a great play out of how rapidly India is taking up handsets, faster even than China. The carriers in these two countries are adding around 20 million new subscriptions every month. China passed 700 million subscriptions in July, and India’s total went past 450 million in August. Creating a situation where 64% of the world’s population has a mobile phone, it says.
On average around the world, mobile data contributes 25% of the total global service revenues with all the major markets except India, having a data contribution percentages above 10%.
But if we look further at that, the Western economies have been surviving on PC dongles for the past year, and pure data service revenues, as the bulk, or at least the best, of their additions. But this requires either that a PC or Netbook is part of the package, or that everyone in the territory already has a PC. That sort of thing just can’t be taken for granted in India where there are only 37 million broadband lines, and they are only just discovering how much more useful a PC is once it is permanently attached to the internet.
Sharma suggests that the term ‘smartphone’ will have to disappear because all phones will be smart in just a few years.
Chetan Sharma Consulting got all this data form its semi annual study on the global mobile data industry looking at data trends in over 40 major countries.
First off it talks about the US as the most valuable mobile data market with service revenues at $20.6 billion against $16 billion in Japan for the first half.
China by comparison is just with $8.6 billion, but still makes it as number 3. Noting that the US registered the highest growth among the top 3 with over 39% increase from end of year 2008 levels says two things ‘ people have the money to buy the types of devices that will use data, and secondly that the operators can charge a lot for that data because there is so little competition.
The top 10 nations by data service revenues are the US, Japan, China, UK, Italy, Germany, France, Korea, Spain, and Australia.
NTT DoCoMo remained number one and was followed by Verizon Wireless, China Mobile, AT&T, KDDI, Sprint Nextel, Softbank Mobile, T-Mobile USA, O2 UK, and China Unicom. We’re not quite sure why O2 UK is being treated as separate from Telefonica, but assume that all of the Vodafone subsidiaries are being treated the same, just because Sharma is interested in the national differences.
Data revenues for the top 10 operators increased 10% from last year and now account for almost 48% of the global mobile data revenues, though their subscriber share is only 30%. In other words if you are BIG you can get more money from data, sooner, probably by investing in devices and HSDPA networks earlier.
China Mobile became the first operator to cross the 500 million subscriber mark. It remains the number 1 carrier in terms of the total number of subscriptions, followed by Vodafone at 264 million. Telefonica, Am’rica M’vil, Telenor, T-Mobile, China Unicom, TeliaSonera, Orange, and Bharti Airtel.
Messaging is still king of the data revenues but other services such as Mobile Music, Mobile TV and video streaming, Voice navigation, PNDs, Mobile Games, IMS, LBS, Mobile advertising are gradually chipping away the share from messaging.