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Weekly UpdatesHigh costs to buy spectrum, delays in handset introductions and slow consumer uptake are combining to dampen prospects for high-speed wireless third generation (3G) services, according to Cahners In-Stat Group, Scottsdale, Ariz.
Although the market may take off in several years, the short-term prospects for the technology that enables video calls, high-speed Internet access, multimedia services and other features are bleak, the high-tech market research firm said.
3G services will make up just 4.7 percent of worldwide wireless market this year. If the market develops as expected, however, that share will jump to nearly 50 percent in 2005. Carriers are scrambling to cover the enormous costs of purchasing the rights to airwaves that carry 3G signals in order to achieve that level of penetration for the new technology.
"The financial impact of mega-spending for spectrum followed by seemingly unreal financing arrangements has taken its toll," said Ray Jodoin, group manager and principal analyst for In-Stat's Wireless Service. "3G is not for those with weak hearts or shallow pockets."
In a related report, In-Stat found that wireless carriers spent more than $8.5 billion in 2000 on the 3G technology W-CDMA, second only to the amount spent on GSM, the 2G technology most common around the world. The total spent on worldwide wireless technology awards made public last year was over $28.5 billion.
In-Stat's research also found the following:
-- The Japanese market will be the first to widely deploy 3G services, but will not have nationwide coverage until late 2002 at the earliest.
-- Despite European commitments to early 3G deployment, it will be mid-2003 before even moderate subscriber uptake occurs.
-- 3G profitability will be largely determined by spectrum licensing costs.
The report, "3G at the Crossroads: Q1 '01 3G Update," (No. GW0103IN) includes forecasts of 3G subscribers and revenues. It also contains listings of 3G awards worldwide, an overview of 3G technology, a primer on 3G evolution, a 3G deployment timetable, and analysis of 3G economics and market prospects.
The report, "Directions '00: 2000 Wireless Awards," (No. GW0105IN) includes detailed listings of 2000 worldwide wireless technology awards by technology and geographic area.
It also contains analysis of wireless award patterns and trends. To purchase these reports, or for more information, visit http://www.instat.com/catalog/cat-cw.htm or contact Erin McKeighan at 480/609-4551; emckeighan@instat.com. The reports are priced at $3,995 and $3,495 USD respectively.
Cahners In-Stat Group covers the full spectrum of digital communications research from vendor to end-user, providing the analysis and perspective that allows technology vendors and service providers worldwide to make more informed business decisions.
In-Stat is a unit of Cahners Business Information (http://www.cahners.com), a provider of critical information and marketing solutions to business professionals and a member of the Reed Elsevier plc group.
For more information, call 480/483-4461 or visit http://www.instat.com.
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