|Latin America 2007
|Mobile broadband data applications
|Celedonio von Wuthenau
|Regional Director for Latin America of the CDMA Development Group
Celedonio von Wuthenau is the Regional Director for Latin America of the CDMA Development Group, CDG, an international consortium of companies which have joined together to lead the adoption and evolution of CDMA wireless systems around the world. Previously, he was Public Affairs Director of Lucent Technologies for South America, excluding Brazil and, before that, the International and Institutional Manager of the National Commission of Communications, CNC, Argentinaís telecom regulator authority. Mr von Wuthenau is a Bachelor in Public Administration and Political Sciences of the University of Cuyo (Mendoza, Argentina) and Ph.D in Political Sciences of the University of Mainz (Germany).
Mobile service operators increasingly find that voice is losing ground to data as a revenue building service. Most of the new mobile services call for robust wireless broadband service. Wireless broadband penetration in Latin America should reach 38 per cent by 2011. Video messaging, video streaming, music download and web browsing accounts for much of this growth. Third-generation mobile services also provide a cost effective way to bring high-speed Internet access to regions that lack adequate fixed infrastructure.
As new competitors enter the market and average revenue per user, ARPU, for voice continues to decline, mobile operators can no longer build a sustainable business purely on voice, and the revenues provided by data become more critical for them. Worldwide, data has become a profitable business and a strong focus for most mobile operators. Several factors drive the growth of data: the advance of Internet-based services, the desire of customers to have access to information while on the go, the availability of 3G CDMA, Code division multiple access, wireless broadband technologies with enhanced data capabilities and greater efficiencies, as well as the higher profit margins from data revenues. Mobile data users The number of mobile data users has increased five-fold in the past six years, from 96 million in 2000 to more than 641 million in 2006; the availability of new 3G CDMA broadband data services played a very important role. This trend is expected to continue. The market strategy consultancy iGR estimates that by 2011, 2.3 billion, or 65 per cent of the worldís total subscriber base of 3.5 billion people, will use data services other than SMS, Short Message Service. The penetration in Asia Pacific will increase 2.5 times, reaching 65 per cent and in North America and Europe will more than double to reach 78 and 70 per cent respectively. The Latin America and Caribbean penetration rates are expected to grow from 20 per cent in 2006 to 38 per cent in 2011. With accelerated deployments of EV-DO, Evolution-Data Optimized, and HSDPA, High-Speed Downlink Packet Access, broadband technologies, the number of mobile broadband users will grow exponentially. Analysts expect that by 2010 there will be 518 million mobile broadband users worldwide, and 94 per cent of them will be using iterations of existing technologies, such as EV-DO and HSPA, which will eclipse all alternative broadband technologies for the foreseeable future. Data revenues The growth in data revenues will be in step with the growth of data subscribers and usage. Informa predicts that mobile data revenues globally will grow 70 per cent from US$82.5 billion in 2006 to US$124.5 billion in 2010 and will contribute 18.4 per cent of total operatorsí revenues, up from 12 per cent today. iGR forecasts mobile data revenues will grow at a compounded rate of 27 per cent over the next five years, while voice revenue growth will be only four per cent. Mobile content revenues (fees associated with the subscriber purchasing content such as ring tones and games) will grow at over 30 per cent and generate US$119 billion in 2011, while data transport revenues (the charges associated with providing a mobile data connection) will account for 13 per cent of the overall data revenue or US$18 billion. Mobile data applications Mobile data applications and services have been available for over 15 years and have evolved over time as the demand for information, content and value-added services has grown, and data-enabling enhancements, such as higher data speeds, lower latencies and greater device processor speed and memory, have been introduced to mobile networks and devices. The availability of mobile data services has closely followed the evolution of network technologies and it has evolved in three distinct stages. Data services started with Short Message Service, SMS, enabled by 2G systems in the early 1990s. Then 3G-enabled multimedia services followed in the early 2000s, including basic Web access and simple multimedia messaging, MMS. The breakthrough came with the deployments of the first CDMA2000. 1xEV-DO broadband systems arrived in 2002, followed by the introduction of HSDPA three years later. Today, 3G CDMA systems, such as EV-DO Rev. A, that are able to deliver average data throughputs of around 1 Mbps in each direction to each user, are making the difference. These mobile wireless broadband networks have enabled a new range of services, including video messaging, video streaming, music download and a richer web browsing experience. Mobile wireless broadband technologies have taken wireless data to the next level, enabling robust data services and improving their ease-of-use and overall customer experience. Mobile operators are now able to target the highly profitable enterprise market with high-speed data connectivity and have introduced new services, such as sending and receiving email with large attachments, video conferencing and sales force automation tools. The consumer has also benefited from the availability of HSDPA and EV-DO handsets supporting mobile TV, music download, 3D gaming, other entertainment services and location-based services. In many countries, wireless broadband technologies are being deployed as a more economical DSL substitute; TelefÛnica 02 in the Czech Republic, TelefÛnica in Guatemala, and ZAPP Mobile in Romania are using EV-DO to provide high-speed broadband connectivity. The wireless industry is now entering the next major transition, to all-IP next-generation systems, which deliver low latencies, ultra high-speed data, advanced quality of service, QoS, and support quadruple-play (mobile voice, broadband Internet access, value-added data applications and broadcast). They will enable operators to compete with fixed Internet-based businesses, offer a wide range of services, including VoIP, voice over IP, advertising, social networking, and mobile TV, and differentiate by integrating presence, location and mobility into these services. As the world of fixed and mobile telecommunications rapidly migrates towards converged services through the delivery of services over IP-based networks, mobile operators are redefining their business models and looking for ways to improve and differentiate their services. Broadly categorised, the applications delivered by these advanced technologies are: ï voice – VoIP, push-to-talk/media and messaging (video messaging with voice attachment); ï advanced location-based services – will enable users to view live video feeds to show traffic situations and alternate routes, and enable the camera on another handset to ëseeí where the device is and send advertising and marketing messages to the handset according to a personís location; ï video – conferencing, monitoring, SWIS – see what I see; ï entertainment – true mobile TV, gaming, remote control of personal video recorder; ï mobile commerce – mobile advertising/purchasing, proximity payments, mobile banking; and, ï user generated content, USG – creating videos and uploading them to the Internet for others to view has become a phenomenon that has extended to the world of mobility. Improved mobile handset camera resolution, storage capacity and greater bandwidths will expand the UGC business. The scope of all the new services will be limited only by the developersí imaginations and not by network performance. Latin America and the Caribbean Latin America and the Caribbean are not an exception. 3G started in the region in the year 2002, thanks to the introduction of CDMA2000. Since then, it has grown rapidly, reaching 63 million subscribers in the region at the end of 1Q 2007, including 2.6 million EV-DO users. In four years, CDMA2000 has captured 20 per cent of the market share, being the leading 3G technology and the second largest technology in the region when 2G CDMA subscribers are included. Recently, other 3G technologies like WCDMA/HSDPA are deploying in the region, strengthening the overall 3G migration at the expense of older 2G technologies like GSM. The adoption of 3G in the region is not only enabling high-speed broadband data and enhanced quality voice services in the most important and densely populated cities of Latin America, but also in the underserved and sparsely populated rural areas of the region. From this perspective, 3G is a key tool for every government to consider when moving forward with its policy regarding the universalisation of services. 3G CDMA is currently delivering affordable voice and data services to the entire population of several countries, expanding their social and economic development, making strong improvements in education, medicine, security, etc. 3G broadband technologies are changing the way people live, study, work, amuse and entertain themselves. It is also creating new opportunities for those who didnít have access to telecommunication services in the past or only had very poor access. CDMA2000 in the 450 MHz, 800 MHz and 1900 MHz bands is leading the market in this regard. Other broadband technologies are starting to do the same. There is no doubt that mobile broadband data services and applications are now a very important part of most carriersí mobile businesses, not just in terms of revenue but also as a key market differentiator. A viable mobile data business is no longer an option for most mobile operators. Carriers must offer a full range of mobile data solutions and a superior end-user experience to be competitive and to meet stringent consumer needs. Building a successful mobile data business today requires the right combination of technologies capable of supporting multiple applications economically, and marketing strategies to package them for the users. The technology has to be able to support high-speed data, low latencies, QoS, superior economics and a smooth evolution path towards an all-IP delivery of multimedia services across multiple telecommunication networks. The key elements of successful marketing strategies include using time-to-market advantages, exceeding user expectations, providing a broad range of attractive devices at affordable prices and flexibility to address the needs of diverse market segments.