Telecom CDMA network delay slows data market growth
- 13 May, 2002 22:00
Delays by Lucent in rolling out Telecom’s CDMA network have been partly blamed for IDC slashing its growth forecast for the voice data market in New Zealand.
The analysts had previously predicted a 40% growth in the market in 2002, from around $100 million last year, but now expect the market to grow just 12% this year.
By 2005, data was to add $1.6 billion of new revenues to 2005, but this has been slashed $500 million to just $1.1 billion.
With the Kiwi voice market “flat” at just over $1 billion, thanks to falling prices making up for extra calls, the data share of the market was to grow from 8% to 38% of the revenue mix by 2005. But now, IDC believes, data will make up only 30% of the total mobile/wireless operator revenue by then.
However, over the next five years or so, depending on the Lucent rollout, the New Zealand data market should grow six-fold to around $600 million.
Telecom and Lucent rolled out a basic “second-generation” network (0274) early last year as a precursor to a more advanced “2.5G” version due late last year. But the superior network is not yet due for launch until later this year.
IDC research director Michael Cranna says a delay in the introduction of new handsets for CDMA is also to blame, but the market should eventually enjoy the “same growth curve, but one or two years behind”.
Cranna says falling voice prices means firms will have to look to data or value added services to make revenue. Two business models would serve this: either the large telcos guaranteeing fast access or smaller firms like wizzbang.co.nz offering application services. Within a few years, these could include enterprise applications like ERP, integration and CRM.
Such services will be boosted by faster data delivery speeds. IDC predicts speeds increasing from 1Mbit/s Bluetooth and 5-6Mbit/s Wi-Fi devices in 2001, through to 10Mbit/s HiperLAN 1 technology and 100Mbit/s Hyperlink systems in 2005.
IDC found the number of New Zealand firms planning to install fixed wireless applications will decrease from 12% of firms in 2001 to 5% in 2004. WAP will eventually take off in 2003 before falling back. Wireless LANs will be popular both this year and next year, with 18-20% of firms surveyed planning installations in each of the coming three years.
Cranna says with falling demand for fixed wireless Walker Wireless and Telecom “will need to act”.
“[The new 3G UMTS TD-CDMA] is a crucial technology to them. It’s a very fast technology [2–9Mbit/s].”
Cranna says it is an interesting technology, still under trial.