ACG Research

ACG Research
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Friday, December 21, 2012

Mobile Has Gone Mainstream

ACG’s analyst discusses the 2H 2012 Mobile IP Infrastructure and EPC Forecast and highlights trends and drivers in the mobile space and what providers can expect in the coming years.

Global mobile data traffic doubled in 2012 and will double again in 2013. According to a GSMA/Deloitte study, as mobile traffic doubles GDP per capita increases by 0.5%. The mobile industry, globally, is now outperforming total GDP growth because of growth in Android, iOS ecosystems, and penetration of mobile subscriptions in developing countries.

In 2012, the mobile industry has been a tale of two networks. 3G investments are slowing, as operators focus on optimization and plan new investments in LTE, Mobile IP Backhaul, and Small Cells. In contrast, LTE investment has seen it largest growth in 2012 with some vendors experiencing more than double growth in 2H 2012. ACG forecasts Mobile Packet Core (MPC) to grow at 0.6% CAGR by 2017; Evolved Packet Core (EPC) will grow at 53.7% CAGR by 2017. GSMA identified 134 commercial LTE networks operating globally, today. ACG expects this number to grow by 125% in 2013.

ACG Worldwide Mobile IP Infrastructure Forecast
Mobile IP Infrastructure
MPC Worldwide Forecast
EPC Worldwide Forecast

North America investment has been fueling the LTE industry, representing nearly half of all global subscribers and Verizon representing one-third of the total. Verizon, Apple, and Samsung and other vendors are dominating the LTE ecosystem, primarily focusing LTE offerings in the US, Canada, Japan, and South Korea. These countries have the majority of users. ACG forecasts major European LTE investments to be delayed by two years as EU member countries slowly allocate 4G spectrum and mobile SPs balance profits and CapEx.

Looking at the future
Significant spending shifts will continue in the mobile industry in the next five years. Mobile SPs are curtailing 3G and 4G RAN spending and reviewing future CapEx outlays with low-cost small cells. Restructured mobile data services and new pricing for 3G and 4G will cause demographic shifts globally; 3G networks in some regions will become value-based offerings for wholesale, machine-to-machine, and low- to mid-market demographic segments.

IP wars will continue in 3G, 4G, mobile devices, and patents as a means to prevent sales and market share gains by Apple, Google, HTC, Microsoft, and Samsung. RIM will divest some of its device business by 2014. ACG predicts BlackBerry 10 will fail in global market adoption at levels forecasted by the vendor. The 3G refurbished device market will continue to grow, especially in the EMEA region. Verizon, Apple, and Samsung will continue to dominate LTE device offerings and mobile ecosystem for next two to three years.

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