Wireless worrying

There is reason for some pessimism about continued wireless expansion in markets such as the U.S., where wireless penetration already is very high and the economic downturn has everyone looking to cut expenses. It isn’t hard to find an analyst beating down the stock of AT&T and Verizon as a result.

Yet the growing move to wireless broadband isn’t expected to abate in 2009, as more consumers buy smartphones and look to use their wireless data capabilities. Certainly, the one million or more Americans whose jobs have disappeared in the last two months aren’t likely to be out shopping for the latest iPhone or iPhone wannabe, but there are millions more who retained their jobs and are excited about the prospects of mobile browsing.

Elsewhere, there is unabated growth. As Marisol Gomez, Americas regional analyst for Informa Telecoms & Media, noted in late December that there is steady growth in the consumer wireless segment in Latin America and the Caribbean, as millions of new subscribers gain what is in some cases their first wireless connections or even their first connections of any kind. Gomez reported 16% year-over-year growth in the region, led in volume by Brazil, with 19 million adds, and in pace by Peru, with an annual subscription growth of 33%.

At the same time, the approval of 3G licenses in China is setting off a feeding frenzy there, and the briefly delayed 3G licensing process in India is expected to have the same consequences.

Globally, there are now 4 billion mobile device connections, according to 3G Americas, the trade association for GSM. And Informa estimates that there are nearly 415 million 3G subscriptions to date, with 77% share of the 3G market on UMTS/HSPA networks, or 320 million connections, and the remaining 95 million on CDMA EV-DO. The number of commercial UMTS/HSPA networks has risen to 258 in more than 100 countries, including 41 networks in 20 countries in the Latin America and Caribbean region.
Rob Prudhomme, vice president of Practice Development for inCode, a business strategy consulting firm to telecom service providers and vendors, believes HSPA/HSPA+ will continue to dominate the 3G market, “It’s a significant improvement in performance over the EV-DO technology that Verizon and Sprint are using,” Prudhomme said. As a result, vendors and service providers now relying on EV-DO are likely to push harder for long-term evolution (LTE), the 4G technology, to hit the market sooner rather than later. Currently, more than 100 operators worldwide, including most industry leaders, have announced expectations to migrate networks to LTE from 2010 and beyond.

"Third generation technologies continue to evolve and the GSM operator today has a clear path towards LTE," said Chris Pearson, president of 3G Americas. "In addition to the evolution to LTE by GSM operators, LTE is proving to be the technology choice for CDMA operators as well."

All of it seems to add up to a growing wireless market, even before new applications such as video and location-based services are considered. Given all the current global economic gloom and doom, that may not be the message being heard, but it should be.