re: Comparative Subscriber Growth by Technology - A 5 Month Look
As I've commented before, sub growth activity in a single month or a single quarter is not indicative of much - particularly because of smoothing of prepaids.
We will however have 6 month 2001 numbers to work with shortly although they won't be official till CDG drags their butt in around September - and I decided to see if I could spot any trends based on 5 months data.
One thing that I have noticed is that the CDMA growth rate has caught back up with GSM, and the gap between GSM & TDMA growth may have narrowed slightly.
It is certainly a little premature for anyone to say that GSM is Toast, however.
EMC always forecasts GSM growth very conservatively. They keep a weather eye peeled for "prepaid adjustments" which have already begun in Europe so that carriers can better show off APRU which has been declining, partially due to keeping prepaids on the books to long.
This year they forecast that GSM subscriber growth will increase by only 121 million from 455.1 million to 575.7 million.
In only 5 months, however, GSM is showing net adds of 83 million (69% of the annual forecast) with the peak selling months ahead, so it appears that GSM will again exceed 200 million net sub adds, blowing away the forecast (once again).
We won't see too much conversion from TDMA to GSM reflected in the sub numbers this year, but that will start next year as AWS, and Telcel (Mexico) start to convert. In 2003 we are really likely to start to see some impact from this as it is likely several others will be starting conversions.
Tero Kuittinen recently observed (6/7/01):
"Phone sales for first-time users aren't that disappointing, while upgrade sales are slumping badly."
thestreet.com
This is borne out by the sub growth numbers below, which have declined less than many projected.
As it relates to replacement (upgrade) sales 1xRTT could soon change this replacement rate situation on the CDMA side and The GSM vendors are hoping GPRS will change this on their side of the street.
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Worldwide Sub Growth Reaches 823 million
Through end of May there are 823 million subscribers as calculated by EMC Cellular who is generally considered to be the most credible source of subscriber statistics in the world.
Subscriber counts have increased by only 116 million in 5 months an indication that the economy, penetration, and "stale' handsets and services, are retarding "cellular" and PCS growth somewhat.
Analog AMPS continues to fade away but TDMA is holding its own (for now), but declining as a percentage of world subscribers as is PDC. In general reduction of analog subs has translated to increase in CDMA or TDMA subs, but that is changing because of GSM expansion in the Americas.
The numbers break out this way:
Unoficial" Subscriber Growth by Wireless Technology thru May 31, 2001
Technology Subs (Million) % All % Digital 5Mo Adds 5Mo. Growth
GSM 537.8 70.0% 70.4% 82.7M 18.2%
CDMA 95.0 11.5% 12.5% 14.6M 18.2%
TDMA* 77.1 10.0% 10.1% 12.8M 19.9%
PDC 53.7 7.0% 7.0% 1.9M 3.7%
Total Digital 763.5 - 100.0% 125.7M 19.7%
Total Analog 59.5 7.6% - -9.8M -14.0%
Total Subs 823.0 100.0% - 115.9 16.4%
* TDMA subs may be overestimated by EMC (see notes below) which means that CDMA percentage of all, and percentage of digital, may actually be just slightly higher and TDMA just slightly lower than reported here.
Source: EMC World Cellular Database which excludes ESMR & PHS subs
gsmworld.com
* TDMA still growing fastest (regardless) and GSM and CDMA neck to neck, perhaps continuing to reverse a trend but too close to call yet. Official quarter ending numbers by EMC (GSM), CDG (CDMA), and UWCC (TDMA) will be revealing, particularly when looked at from a 12 month and 6 month perspective. The really significant numbers will be year ending.
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Sub Growth January Through May Examined Closer (5 months)
The TDMA reporting dilemma:
GSM net adds = 82.7 million = +18.2% (since Q1 end)
CDMA net adds = 14.6 million = +18.2% (since Q1 end)* see Notes
TDMA net adds = 12.8 million = +19.9% (since Q1 end)** see Notes
TDMA net adds = 16.1 million = +26.4% (since Q1 end)*** see Notes
Notes on 5 Month 2001 Sub Growth
Sub counts reported by EMC for year ending 2000 for both CDMA and TDMA are higher than the "official" counts by CDG & UWCC for that period. EMC estimated 81.9 M (instead of 80,44 M) for CDMA, and 64.3 M (instead of 61 M) for TDMA. Through Q1 EMC shows estimated 89.9 million CDMA subs (CDG shows 90 million). Through Q1 EMC shows estimated 89.9 million TDMA subs (UWCC shows 72.4 million).
* Uses CDG "official" for CDMA 2000 ending base not EMC's (more favorable to CDMA growth). It appears EMC has smoothed the numbers for CDMA because Q1 ending numbers for CDMA for Q1 ending reported by CDG & EMC are now virtually identical.
** Uses EMC "official" for TDMA 2001 ending base (not UWCC's) and EMC's for May ending (less favorable to TDMA growth rate). I am more comfortable with TDMA net sub adds and resulting growth rate for the 5 month period calculated this way.
*** Uses UWCC "official" for TDMA 2001 ending base not EMC's but EMC's for May ending (more favorable to TDMA growth) and candidly I am not comfortable with. EMC's numbers for TDMA, as they haven't smoothed year ending and Q1 ending discrepancy.
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Sub Growth in April & May (2 months)
GSM net adds = 34.3 million = +6.8% (since Q1 end)
CDMA net adds = 5.1 million = +5.7% (since Q1 end)
TDMA net adds = 4.7 million = +6.5% (since Q1 end)
* GSM growing fastest with TDMA second
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Key Ratios
Ratio of GSM subs to CDMA subs 2000 end = 5.1:1
Current Ratio of GSM subs to CDMA subs = 5.7:1
Subscriber Net Adds GSM to CDMA since 2000 year end = 5.7:1
Subscriber Net Adds GSM to CDMA for April and May = 6:7:1
* GSM is clearly widening this gap and increasing market share
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GSM (and TDMA) in Latin America
Latin American GSM subscribers have increased 700,000 in 5 months from 1.7 million to 2.4 million.
That may not sound like much but it is a 42% increase in 5 months (118% in 12 months) and whereas 18 months ago there were <5 GSM networks in Latin America there are now 19 (established or being established).
The major GSM buildout will be by TIM in Brazil in new 1800 MHz spectrum. It hasn't really commenced. Another one to watch is in Mexico Telcel/Radio Movil DIPSA de C.V. (TDMA conversion) which has not really commenced either.
* GSM is starting to step out as "fastest growing" technology in Latin America.
In the article I previously cited, Tero Kuittinen noted:
"The biggest recent global upset has been the relative performances of CDMA and TDMA operators in South America. During the first quarter of 2001, CDMA operators added only 950,000 subs in this region, while TDMA operators added 3.9 million. This is a remarkable reversal of fortune, as nearly all American industry observers have forecast that CDMA growth in South America should easily eclipse TDMA. The South American weakness has already dragged the overall CDMA subscriber growth below the growth rates of GSM and TDMA. ... South America is a case study on how messy and unpredictable real-life competition can be between rival standards."
Further Tero comments on this subject here:
thestreet.com
The Americas, China, and India are now all crucial battlefields for CDMA.
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The 1 Billion Worldwide Subscriber Milestone
We are closing in on the 1 Billion Sub mark worldwide.
Last year Cahners In-Stat projected that the 1 Billion mark would be busted by June 2001. Jorma Ollila also intimated the mark would be reached at that time.
EMC was more conservative and forecast 1 Billion by mid 2002, and Ericsson used that number.
CDG was using Volpe, Brown, Wheelan, who forecast that the Billion mark would not be exceeded till 2003, and significantly overforcasted CDMA growth last year while significantly underforcasting GSM.
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- Eric - |
