3G Mobile Market Update

Internet usage over mobile phones is an increasingly popular trend today. This trend is being facilitated by the proliferation of 3G- to 3.5-enabled mobile phones.

Analysts are now looking forward to the launch of the 3G version of Apple’s iPhone, which is scheduled for market availability this year. It is expected to enable users to gain even faster access to the Internet over their mobile phones. However, analysts are divided on where the device will be first launched—in Europe or the US. Analysts contend that since 3G already has a huge presence in Europe and Asia-Pacific, the launch of the 3G iPhone will see a faster uptake in the countries of these regions. While in the US, where 3G uptake is not that promising, Apple might market its 3G iPhone more as a smartphone.

Service providers, on their part, have undertaken a host of innovative measures in order to increase the 3G subscriber base. For example, Vivatel, a Melbourne-based company, has launched the world’s first video-call weather service that keeps 3G handset-users updated about weather conditions. Users can get the weather update directly from the Bureau of Meteorology by dialing 1902 250 841 from their 3G handset. Another example, again in Australia, was the launch of a 3G mobile phone with a built-in Skype facility (a VoIP [Voice over Internet Protocol] service provider). This service enables Skype users to make free calls and send free instant messages to other Skype users. These efforts are leading to an increase in the uptake of 3G mobile phones in Australia.

The Indian 3G mobile market holds a lot of potential. Analysts are of the view that since broadband penetration in India is abysmal, 3G may be seen as a viable option for Internet connectivity. Although it is true that most subscribers in India use their 3G-enabled mobile phones only for voice calls rather than for accessing data over the Web, the scenario is likely to change over the next few years. In fact, 3G may bring about revolutionary changes in rural India, although users will have to be provided the required training in order to use this sophisticated technology. However, the one thing that will bear consequence in the 3G landscape is the economic relationship between price and demand. If prices are too high, then the uptake will remain low. Therefore, 3G phones will have to be priced affordably for the price-sensitive Indian market.

3G is gradually giving way to 4G. However, experts point to the fact that since 3G uptake has not been equally promising in all geographies, 4G deployment will take time to gain a firm foothold globally. Analysts are also of the opinion that training needs to be provided to help traditional value-added resellers (VARs) familiarize themselves with cellular technology as providers move from 3G to 4G networks.

Going ahead, we believe that 3G handsets will witness considerable uptake. However, the possibility of an economic downturn in the US and other Western countries might affect the global economy, and is likely to make operators skeptical about investing heavily in 3G handsets in the short term.

3G, the third generation of mobile phone technologies, allows data transmission over a cellular network in order to provide speedier et connection on mobile phones. It consists of various wireless technologies such as code division multiple access 2000 (CDMA 2000), wideband code division multiple access (WCDMA), enhanced data rates for global system for mobile evolution (EDGE), and universal mobile telecommunications system (UMTS).

The 3G subscriber base is increasing steadily with Asia-Pacific leading the market owing to 3G’s prominence in Japan, South Korea, Hong Kong, Taiwan, and Australia. It is followed by Europe where 3G operators are upgrading to 3.5G and introducing flat rates to popularize mobile Internet. 3G is yet to make its presence felt in the US.

3G is gradually giving way to the fourth generation (4G) standard, which intends to provide speedier Internet access and enhanced data services on mobile handsets.

Our partners at Analysts Perspectives present an overview of analyst observations, predictions, and opinions about the growing adoption of 3G across various geographies.

Some key findings include the large developing markets of China and India are expected to contribute significantly to the robust growth of Asia-Pacific’s 3G subscriber base after 2008; the 3G subscriber base in Asia-Pacific is forecasted to grow at a CAGR of 50.1 percent to reach 178 million subscribers by the end of 2011; and by 2013, one in four consumers in Europe will own a 3.5G-enabled phone.