Latest EMC Worlwide Subscriber Growth Forecast (Very Positive)
From the best in the business (although also relatively conservative).
This forecast revision is exceptionally dramatic, and is obviously driven by trends EMC is seeing this year, despite an economic slowdown. reading between the lines, it recognizes the potential impact of data.
It will be rather interesting to see their revised forecasts for subscriber growth by technology for GSM, GPRS, cdmaOne/cdma2000, WCDMA. Hopefully we can get at them.
>> EMC forecasts subscribers to top 1 billion by end 2001
New Forecasts Released End June 2001
20-Jul-2001
EMC Cellular
EMC's latest quarterly publication of its five year forecasts to year end 2005 reveals a more positive note for the world's cellular industry than most vendors and members of the investment community have recently put forward.
By year end 2001, EMC forecasts world cellular subscriptions to top the one billion mark, up from 728 [?] million at year end 2000.
[Note: Since June 2000, (and as late as November 2000) EMC had been predicting that the one billion user mark would be passed during the second or third quarter of 2002]
Whilst acknowledging that cellular subscription growth in Western Europe has been slowing down as indicated by latest operator reports, the remainder of the world continues to grow with the largest growth being seen in Latin America and the Asia-Pacific regions. Western Europe is the only region to have experienced a decline in net adds over the previous year's results for the same period January to June. EMC's subscriber statistics estimate net adds of 125 million in the 1H 2001.
A key part of EMC's latest forecast is the assumption that some markets will grow beyond the traditional saturation point of 100% penetration.
In forecasting terms the saturation point is the assumed point to be reached in the future and not necessarily within the forecasted time frame when no more growth is predicted, also known as the top of the s-curve. Forecasting towards a saturation point of 100% when markets are already achieving 75% penetration rates will by definition show growth rates slowing down.
Key Assumptions underlying this calculation include:
* All members of population are assumed to have at least one cellular subscription from the age of five upwards. On the basis that a cellular subscription is voice-centric, the ability to talk is seen as key to a subscription. This assumption does not however exclude the understanding that a cellular subscription may be wholly data centric.
* Members of the population falling into the economically active population, defined as 15-64 years, are assumed to have the potential for more than one subscription - typically one for personal and one for business usage.
* The permutations for potential machine-based cellular subscriptions is only limited by the range of appliances and devices available in the home or public environment. EMC assumes that the potential exists for at least one household-orientated cellular-enabled device per household.
EMC assumes the reference to subscriber bases really refers to how many subscriptions are in existence, i.e. traffic and revenue generating accounts.
Multi-subscription scenarios are already in existence whereby subscribers have more than one subscription for purposes of tariff arbitrage or distinguishing between personal and business subscriptions.
Outside of multi-subscriptions, the recording of 'subscribers' (i.e. active subscriptions reported by operators) will begin to include considerable numbers of new devices containing cellular modules each generating traffic and in turn revenue for the operator.
Forecasted World Totals Updated June 2001
Region YE 2001 YE 2002 YE 2003 YE 2004 YE 2005
Africa 29.0m 48.2m 67.4m 84.5m 101.6m
Americas 98.7m 140.6m 181.3m 214.7m 240.5m
Asia-Pacific 330.9m 444.5m 564.2m 678.2m 780.9m
Europe: Eastern 44.5m 60.3m 75.8m 89.9m 102.3m
Europe: Western 367.2m 494.1m 607.5m 694.4m 754.5m
Middle East 14.9m 20.9m 29.0m 38.6m 48.5m
USA/Canada 139.9m 165.2m 191.6m 216.7m 239.7m
World 1,025.3m 1,373.8m 1,716.8m 2,016.9m 2,268.0m
Net Sub Adds 297.3m 348.5m 343.0M 300.1m 251.1m
YOY Growth* 40.8% 34.0% 25.0% 17.5% 12.5%
* EMC reported 728 million subscribers at year end 2000
Source: EMC World Cellular Database; June 2001 forecast based on actual figures to end March 2001 <<
To see just how aggressively EMC has revised their forecast of world sub growth the above forecast can be compared to their one year old forecast. This forecast can be viewed by looking at their Flash animated "Wireless World Map" of subscriber growth prepared a year ago:
e-searchwireless.com
Forecasted World Totals Posted in mid 2000
Region YE 2001 YE 2002 YE 2003 YE 2004
Africa 25.8m 37.5m 49.4m 61.9m
Americas 98.1m 137.7m 175.8m 207.1m
Asia-Pacific 291.8m 369.1m 446.2m 518.5m
Europe: Eastern 40.3m 53.1m 65.7m 76.7m
Europe: Western 319.7m 365.2m 395.6m 413.4m
Middle East 14.1m 20.1m 28.5m 38.1m
USA/Canada 140.5m 165.4m 191.4m 216.0m
World 930.3m 1,146.1m 1,352.6m 1,531.7m
Net Sub Adds 223.2m 215.8 206.5m 179.1m
Old Forecast v Updated New Forecast
Old Forecast 1,025.3m 1,373.8m 1,716.8m 2,016.9m 2,268.0m
New Forecast 930.3m 1,146.1m 1,352.6m 1,531.7m
Differential 95.0m 227.7m 364.2m 485.2m
Variance by Year - 132.7m 136.5m 121.0m
EMC Research Methodology
EMC has a dedicated network of experienced researchers all over the world in order to ensure the most accurate and relevant information and statistics in the EMC World Cellular Database. EMC uses mainly primary sources of information in their research methodology, such as correspondence and contacts within companies worldwide. The EMC's worldwide field research network use resources including:
- Face-to-face contact
- Telephone
- Internet
- Press release
- Company reports
- News feeds (Dow Jones, Reuters)
- Industry Press
- Correspondents
- Conferences/exhibitions
EMC Forecasting Methodology
EMC's proprietary forecast uses the Pearl (s-curve) curve as its underlying algorithm, and although statistically based, the forecast also accounts for EMC's own judgmental opinion of individual markets. Forecasts are reviewed on a quarterly basis allowing for the latest market intelligence to be included in each forecast up to the end of the previous quarter.
EMC's historical subscriber records are the subscriber forecasts' starting point from which current growth rates are mapped along the s-curve towards an assumed market saturation point. This market saturation point is a function of GDP/capita, the maturity of individual cellular markets and a competitive factor. This competitive factor accounts for the number of players in a market, regulatory issues such as new licences, interconnection and coverage constraints; competing network services such as pre-paid services, as well as the political and economic environments.
In the terminal sales forecasts, an average handset lifespan, calculated from historical terminal sales and renewal churn rates, is applied to a Poisson (normal) distribution curve which determines the rate at which handsets are renewed over time. This renewal factor is combined with the anticipated subscriber net gains as calculated from the cellular subscriber forecasts to produce the terminal sales forecasts. <<
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