Oct 29, 2001 12:00 PM

MAPPING NEXT GENERATION WIRELESS

We all know two and a half and third generation wireless technologies are on the horizon, but when's are they coming to your neighborhood? According to Ovum, the combined technologies will start out with in a bang in Asia and Europe with the rest of the world trailing a year or two behind. While that's no great revelation, Ovum's research did reveal some interesting tidbits. Ovum says 2.5G and 3G will account for almost 1 billion subscribers in 2007, and while there will still be a disparity between the 3G haves and have-nots, 2.5G will have fairly evenly penetrated the world's populations. By then, of course, we may have to factor the mythological "4G" into the equation.--Kevin Fitchard

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Projected 3G and 2.5G Connections Worldwide
2.5G	Total connections (000)
2002	7859
2003	39,411
2004	158,435
2005	361,878
2006	583,480
2007	715,958
3G	Total connections (000)
2002	16
2003	1071
2004	5179
2005	25,538
2006	108,789
2007	259,704
Source: Ovum

Projected 2.5G Connections by Region 2.5G (GPRS and cdma2000 1xRTT) could see its heyday in 2004 and 2005. As 3G networks are deployed in the later half of the decade, the phenomenal growth rates of 2.5G will wane.
REGION	2002	2003	2004	2005	2006	2007
North America	10	1452	18,516	47,429	101,591	132,489
South and Central America	0	151	3410	17,842	41,760	77,192
Western Europe	153	13,390	49,322	117,047	159,983	185,613
Eastern Europe	3	325	3446	10,200	23,690	36,576
Middle East and Africa	5	589	5465	14,802	31,275	53,168
Central Asia	40	1437	11,801	53,785	100,388	122,272
Asia-Pacific	7648	22,067	66,476	100,773	124,792	108,647
Source: Ovum

Project 3G Connections by Region While North America is expected to be one of the first regions out of the starting blocks with 3G (cdma2000 1xEV and Wideband CDMA) in 2004 it fails to generate the momentum Europe and Asia do. Ovum predicts North America will end 2007 with a paltry 19.7 million 3G subscribers, as opposed to Asia-Pacific's 87 million and Western Europe's 115 million.
REGION	2002	2003	2004	2005	2006	2007
North America	0	0	179.8	1,964.3	6,161.5	19,794.5
South and Central America	0	0	0	283	1833	9194
Western Europe	0	3	679	12,453	65,203	115,161
Eastern Europe	0	0	0	117	1680	9157
Middle East and Africa	0	0	0	149	1221	4144
Central Asia	0	0	227	1892	4789	15,206
Asia-Pacific	16	1068	4093	8679	27,901	87,047
Source: Ovum

SHOWING THE MONEY

Despite all the talk about new services and new revenue streams, telecom has been barely keeping up with consumer spending patterns. For the last few decades, consumers have apparently drawn a line on their budgets dictating how much of their income will go to telecom services, and that line stops just above 2%. According to the FCC and the U.S. Bureau of Labor Statistics, total expenses for the average U.S. household increased 111% in 18 years, though telephone expenses have remained basically the same.

Annual Household Expenditures for Telephony Services
YEAR		ALL EXPENSES ($)		TELEPHONE EXPENSES		PERCENT OF EXPENSES
1981		17,558		360		2.1
1982		18,071		375		2.1
1983		19,692		415		2.1
1984		21,975		435		2.0
1985		23,490		455		1.9
1986		23,866		471		2.0
1987		24,414		499		2.0
1988		25,892		537		2.1
1989		27,810		567		2.0
1990		28,381		592		2.1
1991		29,614		618		2.1
1992		29,846		623		2.1
1993		30,692		658		2.1
1994		31,731		690		2.2
1995		32,264		708		2.2
1996		33,797		772		2.3
1997		34,819		809		2.3
1998		35,535		830		2.3
1999		36,995		849		2.3
Source: Bureau of Labor Statistics

Average Monthly Household Expenses by Carrier In the last five years, local exchange carriers have managed to keep their share of the consumer pocketbook, while long-distance carriers' numbers have fallen. Wireless, however, was there to pick up the slack.
YEAR	LEC ($)		IXC ($)		WIRELESS ($)		TOTAL ($)
1995	30		21		5		56
1996	30		21		7		58
1997	32		25		8		65
1998	33		23		10		66
1999	34		21		9		64
2000	35		18		11		63
Source: FCC