Mobile Usage to Double by 2007

Despite tough global economic conditions and burdensome debt loads carried by operators in many markets, demand for mobile telecommunications services remains strong and the number of mobile subscribers worldwide will double by 2007, said Kurt Hellstrom, president of Telefonaktiebolaget LM Ericsson, during a keynote speech at the IEEE Global Telecommunications Conference in Taipei recently.

"We believe the [mobile] subscription growth is going to continue and will reach roughly 1.8 billion in 2007," Hellstrom said, noting that this is roughly double the current number of mobile subscribers. "We have only seen the beginning of the many opportunities that lie ahead."

Among those opportunities are new customers expressing growing demand for mobile data services, such as third-generation (3G) services. "We are just beginning to see the growth in mobile data. It starts with camera phones and sending pictures and one day this could be a natural way of communicating between each other," Hellstrom said. Ericsson is among several phone vendors that have developed cell phones with cameras built in, or that accept plug-in digital cameras.

"In technological terms, this requires high data rates and this is where technology comes in," he said, adding that the industry is beginning to see the adoption of high-bandwidth mobile technologies and the roll-out of 3G services in several countries, with operators in many others planning to soon launch similar services.

The shift to 3G services may prove challenging for operators, however, as high-speed data services, such as NTT DoCoMo's Foma 3G service, which was launched in October 2001, have gotten off to a rocky start.

Since its launch, Foma has been plagued by problems such as limited coverage and expensive handsets with short battery life. The service attracted 134,000 subscribers during its first 10 months in operation, far short of the company's initial expectations of 1.38 million subscribers by the end of 2002.

The shortfall in Foma's subscriber growth stands in stark contrast with subscriber growth for other mobile offerings in Japan. During the ten months that followed the launch of the Foma service, 5.6 million people signed up for second generation (2G), or 2.5G services, in Japan, including 3 million with NTT DoCoMo.

"From a technological standpoint, nobody ... has ever expected that this technology shift would take place overnight," Hellstrom said. "It is an evolution and it is now ongoing."

Despite slow initial uptake of 3G services in markets like Japan, Hellstrom sees strong growth for mobile data services based on 3G and other technologies in the Asia-Pacific region, particularly Japan, in the coming years. "We anticipate that this region will account for more than 50 percent of all [mobile data] traffic in 2007-2008," he said.