Mobile broadband revenue to pass $220bn by 2015

Small-screen devices like smartphones continue to drive growing demand for mobile broadband, despite the growing hype around tablets, according to Ovum research.

The analyst firm predicted that laptops, netbooks and tablets will account for 554 million connections by 2015. However, smaller-screen devices will hit three billion within the same period and account for 82 per cent of connections.

As a result, Ovum said that the global mobile broadband market will log revenues of $223bn (£136.9bn) in the next four years.

However, while the revenue growth predictions are positive, Ovum warned that the growth is not keeping pace with connections, and that the revenue shortfall highlights the need for providers to develop improved monetisation strategies.

Revenues from the global mobile broadband market will rise from $100.5bn (£61.7bn) with a compound annual growth rate (CAGR) of 17 per cent, but the total number of mobile broadband connections will have a CAGR of 28 per cent, rising from 899 million in 2010 to three billion in 2015. 

Big-screen mobile broadband connections will grow at a CAGR of 28 per cent over the next four years and reach $102bn (£62.6bn) in revenue by 2015, but revenue from smaller-screen broadband use will have the slower CAGR of $120bn (£73.7bn) by 2015.

Ovum said that the figures reflect the premium that operators can charge for dedicated big-screen mobile broadband services as opposed to the bundles of minutes, messages and data in the small-screen segment.  

“The market for mobile broadband on small-screen devices is eating away at the opportunity for growth in the big-screen market,” said Steven Hartley, Ovum principal analyst. 

He added that the situation in emerging markets will be a key factor, where devices such as laptops are less affordable. Low-end feature phones or smartphones are much more attainable, and many consumers will use these as their only form of internet access, driving connection growth. 

“Mobile broadband service providers will need to develop strategies that meet the demand for mobile internet access while managing costs and securing customer loyalty,” Hartley said.