Mobile Broadband Revenues will Double by 2015

Some "problems" likely are opportunities. Ovum, for example, forecasts that mobile broadband revenues will more than double from $100.5 billion in 2010 to $223 billion in 2015, growing at a compound annual growth rate of 17 per cent. So how is that a "problem"?

Mobile broadband connections will grow at a CAGR of 28 per cent, reaching three billion in 2015, up from 899 million in 2010. The "problem" is that revenue is growing more slowly than "connections."

Of those three billion connections, 82 per cent will use small-screen devices such as smartphones and feature phones, Ovum predicts.

Big-screen mobile broadband connections used to connect laptops, netbooks and tablets will grow at a CAGR of 28 per cent from 2010 to 2015, leading to 554 million connections by 2015.

In terms of revenues, small-screen devices will represent $120 billion worth of revenue in 2015.

So is the growth gap really a problem? It is debatable. One issue is simply that average revenue for a smartphone plan is less than for a large-screen device plan, generally speaking. To the extent that more of the growth is coming from small screen devices. So obviously ARPU is going to be smaller than it would be if most of the growth was driven by higher-ARPU large-screen subscriptions.

Is it a problem that connections are growing at a 28-percent clip, while revenue is growing at 17 percent? Not necessarily. Growth at 17 percent likely outstrips growth for other existing products, hands down, at least in developed markets.

And later adopters typically do not spend as much as early adopters, for any product. Early mobile broadband adoption was boosted by business users, who normally will invest more heavily in productivity tools than consumer users. As the need for mobile broadband increasingly is driven by consumers, ARPU will be lower.

Datamonitor | Media Center | Small-screen devices drive mobile broadband market to revenues of $223 billion