Rapid growth ahead for WCDMA/HSDPA mobile market in Europe

The European mobile broadband market is growing exponentially with demand fuelled by declining prices and improving performance. It is said that Vendors’ 2007 financial data indicated an increase in shipments in the range of 40–50 percent and a general price reduction of 20 percent. Until 2011, the mobile broadband market is expected to increase at a compound annual growth rate of 22.9 percent to reach € 3.0 billion. Device revenues are forecasted to increase at a faster rate than network revenues. While the expected high demand from the PC-industry will lead to higher shipment volumes, the vast majority of new subscribers will only be occasional users generating lower network ARPU.

WCDMA/HSDPA and legacy standards are expected to remain the dominant network access technology throughout the entire period with a market share well above 90 percent. We should notice that at the end of 2006, there were about 3.3 million active WCDMA/HSDPA mobile connections in Europe, compared to less than a quarter of a million for all other technologies combined. Although CDMA 450 has achieved some penetration in the Czech Republic, Romania and Scandinavia and will remain an alternative in areas without WCDMA/HSDPA coverage, deployments of WCDMA/HSDPA in lower frequency bands is likely to reduce the traction of EVDO on the European market in the longer term. WCDMA/HSDPA evolves rapidly as a technology, having advanced from peak data rates of 1.8 Mbps for commercial networks in early 2006 to 7.2 Mbps downlink and 2.0 Mbps uplink in the first half of 2007.

Here, I would like to mention that CDMA 450 is a commercially and technically viable technology in operation today providing cellular voice data and WLL services. CDMA450 is a TIA-EIA-IS-CDMA2000 (CDMA-MC) system deployed in 450 MHz which includes a family of standards developed by 3GPP2, published by TIA and approved by ITU for IMT-2000: CDMA2000 1X, CDMA2000 1xEV-DO and CDMA2000 1xEV-DV. Currently, CDMA2000 1X and CDMA2000 1xEV-DO are commercially available for the 450 MHz band and CDMA2000 1xEV-DV is being developed. In my opinion, CDMA 450 is a real competitor for WCDMA/HSDPA. However, the European investment community is ignoring the benefits of CDMA technologies in the 450 and 800MHz frequency bands.

Some people asked question that what are the real market prospects for alternative mobile broadband technologies like CDMA 450 and WiMAX? Frankly speaking, I do not believe that WiMAX will have any major impact on the European market in the coming five years. Any successful alternative network service provider must overcome a number of formidable barriers. These must include securing sufficient radio frequency spectrum, financing and constructing completely new infrastructure and finally gain a competitive edge against three to four established WCDMA/HSDPA network operators, who by that time will offer network speeds of at least 14.4 Mbps at price points comparable to DSL. The prospects for FLASH-OFDM and other 802.20 standard technologies also appear relatively less attractive.

All in all, I think the WCDMA/HSDPA technology would win the majority of mobile market in Europe in the future. Anyway, the popularity of mobile broadband is starting to have an impact on the overall strategies of network operators in many parts of Europe. Of course, we should be clear about which markets have the highest penetration rates and which are lagging behind? There are significant differences in pricing between operators, as well as markets. In addition, study shows that Greece, France and the UK have the highest overall price levels, while the lowest are found in Austria, Sweden, Hungary and Poland.