Alastair Brydon of Unwired Insight discusses the implications of his analysis of mobile broadband penetration growth across Europe.
As I review our model of the evolving mobile service mix, to help gauge mobile network investment requirements, it is striking that a relatively small number of factors are dominant in driving traffic growth. One of these is smartphone penetration. Not surprisingly, smartphones are widely discussed in the industry, because of continued excitement surrounding Apple’s iPhone, Nokia’s attempts to regain smartphone leadership and the increasing success of Android. However, less widely reported is the continued strong growth in mobile broadband services, using dongles and datacards. Active users of these services can download several GBs per month, which will have a major influence on network traffic levels as the number of users increases.
Across Europe as a whole, the penetration of mobile dongles and data cards continues to increase significantly. By the end of 2009, their penetration stood at 5.2% according to the EU, which is nearly double the corresponding figure of 2.8% at the end of 2008. However, behind these figures lies evidence of a two-speed Europe.
Several countries have experienced extremely rapid growth, and these give us signs of things to come. In Finland, Portugal and Austria, penetration of mobile dongles and data cards exceeded 15% at the end of 2009. Finland reached 17.0%, which was up by nearly 8 percentage points in a year (from 9.1%). No wonder that Finland is ahead of the game with LTE deployment, with TeliaSonera launching its LTE network in May 2010.
Mobile broadband services are having a noticeable impact on fixed broadband services too. Unlike the rest of Europe, which experienced a 1.9 percentage point increase in fixed broadband penetration overall, Finland actually experienced a decline of 1.3 percentage points, from 30.7% at the end of 2008 to 29.4% at the end of 2009.
In contrast with the leading markets, France, Spain and Germany all have lower than average penetration of mobile dongles and datacards.
Alongside marked differences in smartphone penetration between countries, and mobile network operators adopting diverse strategies towards mobile broadband services, this results in a complex picture for mobile network traffic evolution. Some operators will find it difficult to cope with traffic growth, while others will be perfectly comfortable, leading to very different capital investment levels.