The Mobile Broadband Connectivity Market – 7th Edition

  • December 2012
  • -
  • Berg Insight AB
  • -
  • 159 pages

Executive summary

Mobile broadband based on HSPA/LTE and other mobile communication standards has taken off as an important technology for connecting mobile PCs and tablets to the Internet. The evolution is led by Europe where HSPA now accounts for 21.8 percent of the total number of broadband connections, compared to 18.1 percent in North America. The concept that was first launched as an exclusive business service is now a mass-market consumer product sold on an intensively competitive market. Consumers are utilizing their mobile broadband connections extensively, pushing the networks to their capacity limits. In Europe a large share of data traffic on mobile networks is generated by notebook PC users that surf the Internet. The number of mobile broadband subscribers in Europe continues to increase, with demand fuelled by declining prices, improved user experience and new device categories. The total number of mobile broadband subscribers in EU 23+2 grew by 12.4 percent to reach 38.1 million in 2011, while the estimated operator revenues reached € 6.8 billion. The mobile broadband subscriber base is expected to grow at a compound annual growth rate of 10.7 percent to reach 70 million subscribers in 2017. However, mobile broadband subscription revenues will increase at a more moderate CAGR of 5.6 percent during this time period, as growth in subscriptions is largely offset by a decline in ARPU. The number of mobile broadband subscribers in North America grew by 47 percent to reach 21.4 million in the end of 2011. The subscriber base is forecasted to grow at a CAGR of 16.3 percent to reach 53 million subscribers in 2017. The estimated operator revenues were about US$ 9.5 billion and are expected to grow at a compound annual growth rate of 7.6 percent to reach US$ 14.8 billion by 2017. The growth in North America is primarily driven by tablet data plans, which accounted for the vast majority of net additions in 2011. Subscriptions tied to USB modems, mobile hotspots and notebooks with embedded modules are also growing at a steady but more limited pace.

Mobile broadband terminals are available in different forms and shapes. Four main types have emerged to satisfy different needs – PC-cards, USB modems, embedded modules and gateways. Berg Insight estimates the total global number of shipped external mobile broadband terminals in 2011 to 102.5 million. In addition, shipments of embedded modules totalled an estimated 9.3 million units. Terminal shipments to Europe and North America declined slightly in 2011 to 26.6 million units and 8.1 million units respectively. Data on terminal shipments for the first three quarters of 2012 indicates that the European market will decline by 21 percent in 2012. However, the market is likely to have stabilized and is projected to resume growth in 2013, driving mobile broadband terminal shipments to 34 million units in 2017. Shipments to North America are similarly forecasted to reach 13 million units in 2017. Expectations on embedded solutions for mobile PCs have been high during the past years, but the attach rate was still low at 4.2 percent in 2011. Embedded modules can potentially achieve a breakthrough in the tablet device segment, but the most probable scenario is that notebook PCs will continue to account for the vast majority of embedded module volumes. The device ASP in Europe has fallen steeply over the past years and reached € 30 in 2011. Berg Insight predicts that the ASP decline rate will slow down significantly in Europe during the next few years. The North American device market is characterized by a larger mix of midrange and high-end products such as mobile hotspots, whereby the ASP increased to US$ 101 in 2011. The EU 23+2 external device market generated an estimated € 796 million in 2011 while the North American market generated estimated revenues of € 588 million. Huawei has established itself as the world’s largest supplier of mobile broadband terminals holding a market share of 54 percent and has a particularly strong foothold in Europe.

ZTE is the second largest vendor with clear margins capturing a market share of 34 percent. In North America, the local vendors Sierra Wireless and Novatel Wireless still hold strong positions. A vast majority of the external modems shipped are USB modems, but mobile hotspots are gaining in popularity. The embedded module market has been dominated by Ericsson and Qualcomm for years, but both companies decided to exit the market in 2010–2011. The market is thus in a transitional phase where new and existing vendors have an opportunity to capture market share as PC OEMs shift to the next generation of embedded modules.

Table Of Contents

Table of Contents

Table of Contents. i
List of Figures. v
Executive summary..1
1 Market environment ....3
1.1 Internet usage3
1.2 The European broadband communications market .4
1.2.1 Fixed broadband market..5
1.2.2 Wireless market.8
1.3 The North American broadband communications market10
1.3.1 Fixed broadband market11
1.3.2 Wireless market....12
2 Evolved 3G/LTE network technology 15
2.1 Wireless technology roadmap...15
2.1.1 GSM..16
2.1.2 3G networks UMTS/WCDMA - 3GPP Release 99 .17
2.1.3 HSDPA - 3GPP Release 5...18
2.1.4 HSUPA - 3GPP Release 6...19
2.1.5 HSPA+ - 3GPP Release 7 ..21
2.1.6 HSPA+ - 3GPP Release 8 and further evolution...22
2.1.7 LTE - 3GPP Release 8 through 1123
2.1.8 The CDMA/EVDO track ..25
2.1.9 Other wireless technologies26
2.1.10 Comparison of technologies....28
2.1.11 HSPA+ and LTE network deployments..31
2.2 Evolution of network infrastructure.34
2.2.1 From traditional to evolved network architecture...34
2.2.2 Heterogeneous networks....37
2.2.3 Improving network backhaul capacity ....38
2.2.4 Expansion to new frequency bands...41
2.3 Evolution of wireless chipsets ...44
3 Mobile broadband device vendors....45
3.1 The mobile broadband connectivity value chain ....45
3.2 Mobile Broadband data terminals and form factors47
3.2.1 USB modems ..48
3.2.2 Gateways....49
3.2.3 Embedded solutions .50
3.2.4 PC-cards53
3.3 Baseband chip suppliers.54
3.3.1 Qualcomm..54
3.3.2 ST-Ericsson 56
3.3.3 NVIDIA ...57
3.3.4 Intel Mobile Communications...58
3.4 Mobile broadband terminal and module vendors...59
3.4.1 Huawei...59
3.4.2 ZTE ...62
3.4.3 Option....64
3.4.4 Novatel Wireless...66
3.4.5 Sierra Wireless.68
3.4.6 AnyDATA ....70
3.4.7 BandRich....71
3.4.8 Onda Communication ....72
3.4.9 Axesstel .72
3.4.10 Samsung ....73
3.4.11 Franklin Wireless ..73
3.4.12 Others....74
4 Notebook PC and tablet integration ..75
4.1 The global notebook PC and tablet market ..75
4.1.1 Notebook PC market trends76
4.1.2 Notebook PC vendor market shares..78
4.1.3 Tablet market trends .79
4.1.4 Tablet vendor market shares ...80
4.2 Integration of mobile broadband in notebook PCs.81
4.3 Integration of mobile broadband in tablets ...83
4.4 Notebook and tablet vendors....84
4.4.1 Hewlett-Packard ...85
4.4.2 Acer ..86
4.4.3 Dell ...87
4.4.4 Lenovo...88
4.4.5 Toshiba..90
4.4.6 ASUS91
4.4.7 Apple 92
4.4.8 Samsung Electronics 92
4.4.9 Sony .94
4.4.10 Motorola 95
4.4.11 Research In Motion ...96
5 Operator strategies for mobile broadband..97
5.1 Mobile broadband usage 97
5.2 Business models ...99
5.2.1 Postpaid subscriptions.100
5.2.2 Prepaid subscriptions ..100
5.2.3 Bundling with other services ..102
5.2.4 Shared data bundles....102
5.3 Pricing and conditions...103
5.3.1 Pricing .103
5.3.2 International roaming ...104
5.3.3 Terms of use..107
5.4 3 Group.108
5.5 Deutsche Telekom....111
5.6 France Telecom...114
5.7 KPN Group 118
5.8 Telecom Italia..119
5.9 Telekom Austria ...120
5.10 TeliaSonera122
5.11 Telefónica Group .125
5.12 Vodafone Group ..127
5.13 Verizon Wireless ..132
5.14 ATandT 133
5.15 Sprint ....135
6 Market forecasts and trends ..137
6.1 Market summary..137
6.2 Device market.139
6.2.1 Vendor market shares ..140
6.2.2 Form factor trends...144
6.3 The European mobile broadband service market.149
6.3.1 Pricing trends 153
6.3.2 Network technology trends ....155
6.3.3 Service convergence trends ..156
6.4 The North American mobile broadband service market .157
6.4.1 Pricing trends 158
6.4.2 Network technology trends ....159
Glossary 163

List of Figures

Figure 1.1: Global broadband traffic by application category (2010) 4
Figure 1.2: Fixed broadband market data (EU23+2 2011).6
Figure 1.3: Fixed broadband operators by number of subscribers (EU23+2 2011) ..7
Figure 1.4: Mobile operators by number of subscribers (EU27+2 Q2-2012) ...9
Figure 1.5: Fixed broadband market data (North America 2011) ....10
Figure 1.6: Fixed broadband operators by number of subscribers (North America 2011).11
Figure 1.7: Mobile operators by number of subscribers (North America Q2-2012)..13
Figure 2.1: Wireless cellular subscribers by standard (Worldwide Q2-2012) .15
Figure 2.2: Technical performance data for 3GPP Release 5 (HSDPA)18
Figure 2.3: Technical performance data for 3GPP Release 6 (HSUPA)20
Figure 2.4: Theoretical peak data rates by technology 27
Figure 2.5: Evolution of different wireless technologies ....28
Figure 2.6: Correlation between bitrate and coverage .29
Figure 2.7: Average range of latency for a ping roundtrip.30
Figure 2.8: Examples of HSPA+ networks in Europe (July 2012) ...31
Figure 2.9: Examples of LTE deployments in Europe and North America.33
Figure 2.10: UMTS network architecture ..35
Figure 2.11: LTE network architecture.36
Figure 2.12: Monthly data usage by subscription type (Scandinavia 2007-2011) ...39
Figure 2.13: Vodafone’s backhaul upgrade in Europe.41
Figure 2.14: Spectrum bands and available FDD blocks for mobile broadband.42
Figure 3.1: The mobile broadband connectivity value chain..46
Figure 3.2: Examples of USB modems48
Figure 3.3: Examples of wireless gateways...50
Figure 3.4: Examples of embedded mobile broadband modules....52
Figure 3.5: Examples of PC-card models.53
Figure 3.6: Selection of mobile broadband products from Huawei .61
Figure 3.7: Selection of mobile broadband products from ZTE..63
Figure 3.8: Selection of mobile broadband products from Option ..65
Figure 3.9: Selection of mobile broadband products from Novatel Wireless .67
Figure 3.10: Selection of mobile broadband products from Sierra Wireless ..69
Figure 4.1: Notebook PC shipments (Western Europe 2004-2011) 76
Figure 4.2: Notebook PC vendor market shares (World 2011) ...78
Figure 4.3: Tablet shipments (World 2011) ...80
Figure 4.4: Number of notebook PC models with integrated HSPA (2007-2012) ....81
Figure 4.5: Connected tablet shipments (World 2011).83
Figure 5.1: Pay as you go mobile broadband offers from 3 UK (October 2012) ....101
Figure 5.2: Retail and wholesale price caps on data (July 2012)...104
Figure 5.3: Tariffs for Telekom Austria’s data roaming packages (October 2012) .105
Figure 5.4: Roaming packages from Vodafone Netherlands (October 2012)....106
Figure 5.5: 3 Austria’s roaming tariffs (October 2012)107
Figure 5.6: 3 Group mobile broadband subscribers by market (2011)....109
Figure 5.7: 3 Group mobile broadband tariffs by country (October 2012)....110
Figure 5.8: T-Mobile broadband tariffs by country (October 2012)113
Figure 5.9: Orange mobile broadband subscribers in key markets (2011) ..115
Figure 5.10: Orange mobile broadband tariffs by country (October 2012)...116
Figure 5.11: KPN mobile broadband tariffs by country (October 2012)...118
Figure 5.12: Telecom Italia mobile broadband tariff (October 2012) ..120
Figure 5.13: A1 Telekom Austria mobile broadband subscribers (2006-2011).121
Figure 5.14: Telekom Austria mobile broadband tariffs (October 2012) ..122
Figure 5.15: TeliaSonera mobile broadband tariffs by country (October 2012).124
Figure 5.16: Telefónica O2 mobile broadband tariffs by country (October 2012) ...126
Figure 5.17: Vodafone mobile broadband subscribers (FY2005-FY2011) ...128
Figure 5.18: Vodafone mobile broadband tariffs by country (October 2012) ....130
Figure 5.19: Verizon Wireless mobile broadband tariffs (October 2012) ......133
Figure 5.20: ATandT mobile broadband tariffs (October 2012) ....134
Figure 5.21: Sprint mobile broadband tariffs (October 2012) ...136
Figure 6.1: Mobile broadband market summary (EU/NA 2011-2017) 138
Figure 6.2: Mobile broadband device shipments and revenues (EU/NA 2011-2017) .140
Figure 6.3: Revenues and shipments of external devices by vendor and region (2011)..141
Figure 6.4: Embedded module shipments to PC and tablet OEMs by vendor (2011) 143
Figure 6.5: Mobile broadband shipments by product category and region (2011-2017) 146
Figure 6.6: Shipments of notebooks with embedded mobile broadband (EU/NA 2011-17) 148
Figure 6.7: Shipments of tablets with embedded cellular connectivity (EU/NA 2011-17)149
Figure 6.8: Mobile broadband subscribers and operator revenues (Europe 2011-2017)151
Figure 6.9: Mobile broadband market data (EU23+2 2011)152
Figure 6.10: Average monthly fee for mobile broadband services (Europe Nov 2012)....154
Figure 6.11: Mobile broadband subscribers and operator revenues (NA 2011-2017)159

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