- 25 January 2006 -

Record 423m new cellular subscribers in 2005...

The cellular industry is on course for 2.5 billion subscribers by the end of 2006, and 3.5 billion by the end of 2010, according to the report "Worldwide Cellular User Forecasts, 2005-2010" from Strategy Analytics’ Wireless Network Strategies service. Also, the industry will generate $800 billion in service revenues by the end of the decade, it predicts.

“There were two key trends in the global wireless market in 2005,” says Phil Kendall, Director, Global Wireless Practice. “First, emerging markets contributed phenomenal levels of subscriber growth. In particular, Russia, India and Indonesia saw major growth in new users in 2005, up 40-50% over 2004 levels. African nations, including Nigeria and Algeria, are waiting in the wings to become leading growth markets in 2006. The second key trend is the coming of age of the high-speed 3G market.”

“W-CDMA user numbers jumped from 16 million to 49 million during 2005, with CDMA2000 1x EV-DO users up from 12 million to 26 million,” adds David Kerr, VP Global Wireless Practice. “Europe finally joined Japan in delivering meaningful W-CDMA numbers, while the USA also made leaps in EV-DO. We expect both of these technologies will double their subscriber counts in 2005.”

...but West European revenues falling

Cellular operators in Western Europe should be prepared for another challenging year in 2006, according to the report, "Western European Cellular User Forecasts, 2005-2010” from Strategy Analytics’ Wireless Network Strategies service. Competitive pressure saw average revenues weaken in 2005 with churn creeping up. Strategy Analytics predicts no relief at all in 2006, though 3G growth is highlighted as one bright spot.

After growth in 2003 and 2004, average revenues per active subscriber fell 1% in 2005 and are forecast to fall 2% in 2006. 2005 was the first year of single-digit service revenue growth in the history of the West European cellular market and these will grow by less than 4% in 2006.

“Regulatory and competitive environments are really squeezing the potential for West Europe’s wireless industry,” says Phil Kendall, Director Global Wireless Practice. “This is being felt most in the Nordic region – average revenues fell 11% in Finland in 2005, 6% in Norway and 5% in Sweden. Following market consolidation in Denmark, revenues grew there by 3%. It is no coincidence that Nordic operators are keen investors in the wireless markets of Eastern Europe and beyond.”

David Kerr, Vice President, Global Wireless Practice, adds, “If there is a silver lining, it is in the 3G market. W-CDMA subscriber numbers quadrupled in 2005 in Western Europe to reach 25 million and they will more than double in 2006. Vodafone made strong inroads into Hutchison’s 3G lead and has done much to raise the profile of 3G in the consumer space. We expect to see over 100 million W-CDMA users in Western Europe by the end of 2007.”

Web: http://www.strategyanalytics.com