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Research
WiMAX adoption to rise, DSL to gain ground
Excerpts from the Prévision-SITM Annual Telecom Forecast
‘07 released recently
The telecommunications industry has grown rapidly over the
last few years due to factors such as government regulations, improved
incomes and changes in customer behaviour. The Prévision-SITM
Annual Telecom Forecast ‘07 report released recently speculates
that urban and rural tele-densities will rise while NLD / ILD (National
Long Distance / International Long Distance) tariffs will slide.
On the FDI (Foreign Direct Investment) front the report hopes that
India will remain a lucrative destination for investors. Significant
investments in telecommunications manufacturing will be made this
year. The VSAT / DTH market will get a boost.
Key trends in 2007
India is set to topple China in 2007 as far as net additions of subscribers
goes. In North America, the market will see an inclination of operators to move
towards 4G technology. IPTV is set for a rollout next year. The Asia-Pacific
region will continue to add the maximum number of subscribers.
WiMAX will be adopted as a backhaul technology. WiMAX is expected to come in
a big way and make way for pilot testing. WiMAX rollouts are expected in the
second quarter of the next year, subject to spectrum clearances. In WCDMA (Wideband
Code Division Multiple Access), heavy investments are likely to continue.
DSL (Digital Subscriber Line) will gain ground in India, and ADSL2+ will be
the preferred technology. Investments in MPLS will continue. Metro Ethernet
will gain marginally over the next year.
- Mobile subscriber base set to reach 2.9 billion
mark by the end of 2007. We expect six markets, especially China, India,
Russia, the USA, and Brazil, to account for more than 50 percent of
the total net additions in 2007.
- The difficulty of the mobile operator business
model formed on high subscriber acquisition costs (principally handset
subsidies), high churn levels and falls in the price per minute of mobile
voice telephony.
- The rapid evolution of the Mobile Virtual Network
Operator (MVNO) concept and operators’ realisation that a wholesale
strategy can, in some cases, will be more profitable than a retail business.
- The impact of IP, in particular, Web-based alternate
service providers is rapidly driving down the price of voice telephony.
One thing is clear—mobile voice prices are on the slide.
- The Walled Garden Approach of mobile operators
in Europe will see a significant change forced by premium content operators.
- The telecom industry is moving away from a royalty-based
model to an open source-based model.
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Investments to rise
The growing telecom sector in India will attract another US$ 855 million as
foreign investment over the next two years. It is less likely that 3G will be
introduced as a service even though some infrastructure deployments might happen
in some pockets of the country. The revenues from the VAS (Value-Added Services)
sector is forecasted to be 22 percent of the total revenues generated from the
mobile operators and will reach around $255.5 million in 2007.
The structured cabling industry will garner increased revenues with companies
going in for heavy deployments as a result of reduced capex. IP telephony will
move from being a niche application to mainstream application with a shift from
TDM (Time Division Multiplexing) to IP.
The Broadband market in India will see high growth rate in the next one year.
The major impetus for the Broadband adoption process will come from the incumbent.
WiMAX
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India is set to topple China in
2007 as far as net additions of subscribers goes.
In North America, the market will see an inclination of operators to move
towards 4G technology. IPTV is set for a rollout next year. The Asia-Pacific
region will continue to add the maximum number of subscribers
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WiMAX shall be the preferred “new” technology to be implemented by
operators in the next one year.
We expect WiMAX rollouts to happen in the second quarter of the next year,
subject to spectrum clearances. Large operators and new players will enter this
segment, using this technology as an alternate to terrestrial networks for triple
play services.
Indian telecom operators do understand the ability of WiMAX as a suitable BWA
(Broadband Wireless Access) technology option and will be looking for both as
802.16d & 802.16e deployment. The opening of 2.3 and 2.5 MHz band will further
boost the Mobile WiMAX.
Operators will look at entry strategies like equipment and PC bundling on a
leased / funded platform to make the technology affordable for the mass market
right in the beginning.
We predict a slow uptake in the next one year because of deployment issues,
and the unorganised content industry, that would enable triple play content
services through.
WCDMA
We predict WCDMA will be the preferred 3G technology for Indian operators. The
lack of spectrum with comparatively higher investment in licence fees might
create a barrier for growth. Although incumbents and large private operators
will invest heavily in WCDMA, in the next one year, commercial rollouts will
happen only in the next two to three years.
EvDO
Tata Teleservices Limited (TTSL) will look into CDMA technology migration to
EvDO Rev-0 (Evolution Data Optimised) as possible upgradation to 3G. The availability
of the 800 MHz spectrum for CDMA 3G will further help them in migration. The
option of adapting CDMA EvDO Rev-A may not take place soon until the technology
adoption by the top operators and availability of Rev-A handsets.
However we will still see a shift in CDMA operators moving to other BWA technologies.
WCDMA will be the technology of choice for large operators. With Reliance Communications
moving towards a pan-India GSM network, we see that only TTSL may not bring
a good ecosystem to support CDMA 3G.
DSL and copper last mile
DSL will gain ground in India, and we predict ADSL2+ to be
the preferred technology. The incumbents (particularly BSNL & MTNL) in India
have not taken an aggressive stance in the introductory stage. They will be
making a broad-based market to uptake the triple play applications on their
network. MTNL has already pioneered in this area indicating commitment to invest
in network upgrade to deliver the services.
| Prévision - SITM Annual Telecom Forecast
is in its fourth year. It was initiated in 2003, with the purpose of providing
the industry a neutral and insightful single point-of-view regarding the
emerging trends in the telecom sector for the forthcoming year, after accumulating
inputs from detailed research into contemporary telecom technologies, telecom
business and other determinants of change. |
EDGE / GPRS
GPRS (General Packet Radio Service) and EDGE (Enhanced Data GSM Environment)
will continue to gain marketshare in the next one year. This is because of the
wide and increasing availability of multimedia- and data-enabled handsets. Operators
will further introduce lucrative options for consumers to increase the usage
of the data-enabled services. We see further penetration of this technology
in the B and C circles in the next year. The World Cup Cricket will have its
impact on GPRS usage, and if the operators strategy to get the premium content
works right, we will see a good uptake of sports content on GPRS / EDGE in the
country in the next one year, though the price points will be significantly
below that of the world average.
Telecom in the Asia-Pacific
The most populous region of the world which at present contributes around 40
percent of the total mobile subscribers is expected to cross personal 1 billion
mark in the early 2007.
China is going to award three 3G licences by mid-2007. The subscriber base in
China is expected to cross 475 million subscribers by the end of 2007 but the
rate of increase in subscribers will constantly decrease.
India will probably sort out the spectrum allocation issues in 2007 and we will
see some activity in the deployment of 3G by the end of 2007. India will continue
to be the centre of fastest growing areas.
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