Small-screen devices drive mobile broadband market to revenues of US$223 billion

Key points:

• Global revenues to more than double by 2015
  
• Mobile broadband connections to hit three billion
  
• Small-screen devices (smartphones and feature phones) to make up 82% of connections by 2015
  
• Big-screen devices (laptops, netbooks and tablets) lag behind with 554 million connections by 2015

However, the independent telecoms analyst finds that revenue growth is not keeping pace with connections, highlighting the need for service providers to develop improved monetisation strategies.

In a new forecast**, Ovum states that revenues from the global mobile broadband market will more than double from US$100.5 billion in 2010 to US$223 billion in 2015, growing at a compound annual growth rate (CAGR) of 17%.

Massive growth

Meanwhile, total worldwide mobile broadband connections will grow at a CAGR of 28%, reaching three billion in 2015 from 899 million in 2010. Of those three billion connections, 82% will use small-screen devices such as smartphones and feature phones.

Big-screen mobile broadband connections (laptops, netbooks and tablets) will grow at a CAGR of 28% from 2010 to 2015. However, this segment will only have 554 million connections by 2015.

In terms of revenues, small-screen devices will also lead the way, reaching US$120 billion in 2015. However, there will be a smaller gap between big-screen mobile broadband revenues, which will be US$102 billion. This reflects the premium that operators can charge for dedicated big-screen mobile broadband services as opposed to the bundles of minutes, messages and data seen in the small-screen segment.

'The picture in emerging markets is also a key factor'

Steven Hartley, Ovum principal analyst, commented: "The market for mobile broadband on small-screen devices is eating away at the opportunity for growth in the big-screen market. Consumers now expect to be able to access services such as Facebook on their mobile phone, which is why we will see handset connections far outstripping big-screen connections by 2015.

"The picture in emerging markets is also a key factor. Devices such as laptops are less affordable in these markets. However, low-end feature phones or smartphones are much more attainable, and many consumers will use these as their only form of Internet access, driving connections growth.

"Another key finding is that growth in the number of global connections will far outstrip revenues. From 2010 to 2015, connections will grow at a CAGR of 28%, while revenues will increase by 17%. Mobile broadband service providers will need to develop strategies that meet the demand for mobile Internet access while managing costs and securing customer loyalty."

*Exchange rate at time of publishing US$1=R6.71.

**Mobile Broadband Connections and Revenues Forecast: 2010-15

© Ovum, 2011