The 3rd generation of mobile communications will still be the revenue source for mobile operators for several years despite the increasing growth of 4G/LTE technology. Such factors as increasing speed of data transfer in 3G, increasing penetration rate of smartphones and devices supporting this technology, broadening the covering zone of 3G will be the main drivers for investment in 3G networks.
J’son & Partners Consulting presents main results of the research: “3G (HSPA & HSPA+) in Russia and in the World: Current market state, potential and development perspectives”.
Nowadays 3rd generation of mobile communication technology is built on three main IMT-2000 standards:
The main difference between these standards is the data transfer speed for downlink and uplink (depend on standard’s modification/release). Commercial release of HSPA technology is overtopping EV-DO release by speed characteristics. In particular DC HSPA+ modification allow to exceed the peak speed index of CDMA 2000 1 Х EV-DO Rev. B. According to CDG data, 12 commercial Rev.B networks have been deployed in 11 countries by June 2013:
In accordance with GSA data, on 7th October 2013, 532 commercial HSPA networks have been deployed in the world compared with 482 in 2012. First WCDMA networks have been launched in 2005, afterwards modifications of this technology were released – HSPA, HSPA+ and DC HSPA+. For several years the dynamics of growth rates of WCDMA/HSPA networks implementation in the world decreased from 81% in 2007 till 4% in 2011, while it grew to 18% in 2012 and 10% growth for the 9 months of 2013. In general, the number of 3G networks with WCDMA/HSPA standard doubled since 2008.
GSA released that on 7th October, 2013 the peak speed for almost forth of HSPA networks was around 45 Mbps (DC HSPA+ technology) and 21 Mbps for 36% of networks (HSPA+ technology).
Russian operators are actively investing in 3G networks. Megafon is planning to invest 5 bln.rub for modernization of more than 10 thousand 3G base stations in Moscow, Saint-Petersburg, Novosibirsk, Nizhny Novgorod, Samara, Krasnodar and Sochi.
At the end of 2012 MTS is close to Megafon by number of 3G base stations. According to operators’ data (20F forma) MTS has 28 419 UMTS base stations (including 1113 femtocells UMTS-2100) vs 28051 thousand of 3G base stations of Megafon. MTS’s press-service announced that the operator has 34 thousand of base stations supporting 3G and LTE at the end of 3Q 2013 (96% of 3G base stations supporting HSPA+ with 21 Mbps max.speed in more than 4400 cities; half of base stations working on Dual Carrier and supporting 42Mbps speed in more than 2250 cities). At the end of 3Q 2013 MTS’s revenues growth rate was 45% from data transfer and this figure is the highest among the “Big Three” operators.
VimpelCom is also planning to continue investing in 3G networks. In the beginning of November, 2013 operator had over 24 thousands of 3G base stations and is planning to increase this number to 27 thousands at the end of the year. Around 80% of the base stations will support HSPA+ technology with a 21 Mbps max. speed. VimpelCom is planning to spend around 22% revenues for this till the end of 2013.
At the end of 2013 operators are overcoming the differences in the infrastructural development of 3G networks and now will compete in the new spheres: marketing and sales, keeping the clients and increasing customers’ loyalty.
Rostelecom is entering 3G market. It was planned to launch 6-8 thousand of 3G base stations at the end of 2013, nevertheless, at the 30th September, 2013 Rostelecom and its subsidiaries launched 5250 3G base stations in 24 regions (in 22 regions networks are in a commercial use). The number of base stations is increasing almost every day, according to the data of External relations department of Rostelecom. All base stations supporting HSPA+ and providing the data transfer speed of 21 Mbps. All 3G networks are constructing by LTE Ready model. As a result it will be possible to deploy 4G/LTE in the future on the already installed equipment.
Rostelecom’ Moscow branch announced the tender on platforms for 3G networks construction in Moscow and Moscow region (1750 sites of radio access networks), with a start in 2Q 2014. It is expected that by including these platforms the operator will increase its base stations in Moscow from 2 till 3.75 thousand.
According to J’son & Partners Consulting, at the end of 2012 3G-coverage (share of population that lives on a certain territory that 3G networks are covering) was over 75% while this rate was 65% in 2010.
Ericsson forecasts the domination of WCDMA/HSPA technology on the global market in 2018. HSPA+Advanced and WCDMA+ technology will be launch in the market in 2015 and at the end of 2017 the number of connections to HSPA in the world will be 4.2 bln. and the number of LTE-connections will be 940 mln.
Increasing rate of mobile internet access is a key factor for development of 3G technologies (HSPA & DC HSPA+): traffic is increasing and subscribers are looking for a higher data transfer speed. The evolution of HSPA+ standard is being expected in the next 4 years (improvement and increasing data transfer speed).
HSPA+ & DC HSPA+ are technologically close to the 4th generation of networks. Currently existing networks could be modernized and deployed in HSPA+ & DC HSPA+. Launch of new smartphones and tablet PCs supporting HSPA & DC HSPA+ are the key drivers for positive development of such networks.
In May, 2013 134 commercial networks DC-HSPA+ have been deployed in 70 countries. In some regions, including Europe, 3G/HSPA networks are very popular; most of subscribers of mobile broadband access are using this technology and as a result create a competition between the operators. A lot of operators use GSM frequencies in the 3G networks. For example, the use of 900 MHz in 3G (UMTS-900) allows operators to cover the whole country with the services of mobile broadband access including the remote regions, and it also helps to increase the communication quality inside the building.
According to J’son & Partners Consulting, 3G technologies will dominate all around Russia until 2018 with a share of 78% by number of subscribers. In Russia around 80% of revenues from mobile internet access will belong to mobile data transfer in 2G/3G networks at the end of the reporting period.
Detailed results of the research arepresented in the full version of the Report: «3G (HSPA & HSPA+) in Russia and in the world. Current market
state, potential and development perspectives» (75p)
1. Current state of 3G development in Russia and in the world
1.1. Dynamics of commercial 3G networks launch in the world
1.2. Ecosystem of devices
1.3. Dynamics of commercial 3G networks launch in Russia
1.3.1. Dynamics of number of base stations
1.3.2. Dynamics of number of Internet users and revenues from data transfer
1.3.3. Dynamics of traffic (data transfer)
1.3.4. Share of mobile phones and smartphones supporting 3G
1.3.5. Evaluation of 3G-coverage
1.4. Forecasts of 3G development in Russia and in the wolrd
1.4.1. HSPA networks
1.4.2. CDMA networks
2. New 3G-technologies: HSPA+ & DC HSPA+
2.1. Dynamics of implementation in the world
2.2.1. Development of 3G networks in the band of 900 Mhz frequency
2.2.2. The development of DC HSPA+
2.2.3. The development of EV-DO
2.2.4. Investments in LTE development
2.3. Support on the level of subscribers devices
2.4. Development perspectives of new 3G-technologies
3. Comparison of subscribers’ base revenues in 2G/3G & 4G networks in Russia: forecast until
3.1. Conservative scenario
3.2. Basic scenario
3.3. Optimistic scenario
4. Share forecast of different mobile broadband access technologies in Russia for 2018
List of abbreviations
List of Figures
Fig. 1. Dynamics of number of networks WCDMA/HSPA in the world, 2005-2013
Fig. 2. Share of HSPA networks by speed limit for data transfer (output)
Fig. 3. Dynamics of CDMA subscribers’ base in the world, 2Q 2010 – 4Q 2013, mln.
Fig. 4. Dynamics of ED-VO subscribers’ base in the world, 2003 – 2011, mln.
Fig. 5. Coverage map of CDMA in the world, by releases
Fig. 6. Coverage map of EV-DO 450 MHz in the world, May 2013
Fig. 7. Number of 3G devices with different technologies, May 2013
Fig. 8. Dynamics of 3G IMT MC-450 base stations in Russia, 2006-2012
Fig. 9. Dynamics of 3G IMT 2000/UMTS base stations in Russia, 2006-2012
Fig. 10. Dynamics of 3G/UMTS base station in Russia, 2010-2012
Fig. 11. Number and share of base stations of different standards of wireless mobile communications in Russia, 2012
Fig. 12. Dynamics of mobile Internet (SIM-cards) users in Russia, 2008-2020
Fig. 13. Revenues from mobile Internet in Russia, 2010-2018
Fig. 14. Dynamics of traffic (data transfer) in Russia, 2010-2016
Fig. 15. Structure of smartphones market with 3G modules/without 3G modules in Russia, thousand pcs., 2010 – 2012
Fig. 16. Structure of smartphones market with 3G modules/without 3G modules in Russia, $, 2010 – 2012
Fig. 17. Structure of smartphones market with 3G in Russia, by manufacturers, pcs., 2012, %
Fig. 18. Structure of smartphones market with 3G in Russia, by manufacturers, $, 2012, %
Fig. 19. Quarterly dynamics of average smartphone’s price with 3G module in Russia (USD), 2012
Fig. 20. Structure of 3G-smartphones’ market by price in Russia in 2010 – 2012, % from sales (pcs.)
Fig. 21. Structure of Tablet PCs market in Russia, supporting and non-supporting 3G , pcs. in 2011 – 2Q 2012
Fig. 22. Structure of Tablet PCs market in Russia, supporting and non-supporting 3G , $, in 2011 – 2Q 2012
Fig. 23. Average retail price of Tablet PCs with and without 3G in Russia
Fig. 24. Sales share of 3G-phones in the total structure of sales, pcs., 2012 – 1Q 2013
Fig. 25. Penetration of 3G networks in the world, the beginning of 2012
Fig. 26. Penetration of 2G, 3G & 4G in the world, 2000 - 2016
Fig. 27. Mobile broadband access technologies, development perspectives in the world, 2008 – 2015
Fig. 28. Number of mobile connections in the world, by technologies
Fig. 29. Number of subscribers, by technology and territory, as in 2012
Fig. 30. Number of subscribers, by technology and territory, as in 2018
Fig. 31. Number of users of mobile broadband access in the world, 2011 – 2016, bln.
Fig. 32. Dynamics of subscribers’ base HSPA & LTE, 2012 - 2017, mln.
Fig. 33. Number and share of connections to different mobile broadband access technologies, 2008 – 2014
Fig. 34. Number of EV-DO subscribers, 2010-2015, mln.
Fig. 35. The total subscribers’ base of “Skylink”, 2008-2011
Fig. 36. Number of users of data transfer and data ARPU of “Skylink”, 2010-2011
Fig. 37. SWOT-analysis by CDMA 1 x EV-DO 450 MHz technology
Fig. 38. Number of CDMA subscribers in Russia, 2011-2015
Fig. 39. Number and growth rate of HSPA+ networks in the world, 2009 - 2013, % and in pcs.
Fig. 40. Number and growth rate of commercial DC HSPA+ networks in the world, 2011- 2013
Fig. 41. Share of different subscribers devices in the total volume of devices supporting 3G, 2012, %
Fig. 42. Evolution of HSPA standard, 2013 - 2016
Fig. 43. Data transfer speed in different modifications of HSPA standard
Fig. 44. Number of mobile Internet users in Russia by technologies 2G/3G & 4G (basic scenario), 2012 – 2018
Fig. 45. Subscribers base in LTE networks, forecast until 2020
Fig. 46. Shares of 2G/3G & 4G LTE by revenue volume: forecast until 2018 (basic scenario)
Fig. 47. Forecast of number of subscribers (mln.) and shares (%) of different mobile broadband access technologies in Russia for 2018 (basic scenario)
List of Tables
Table 1. Short description of 3G standards operating in commercial networks
Table 2. Number of commercial CDMA2000 networks in the world and in Russia
Table 3. Number of CDMA2000 networks that are in process of construction in the world and in Russia
Table 4. Number of commercial CDMA450 networks in the world and in Russia
Table 5. Number of CDMA450 networks that are in process of construction in the world and in Russia
Table 6. Commercial networks CDMA 1 X EV-DO Rev.B in the world
Table 7. Main types of devices supporting HSPA, HSPA+ и DC HSPA+
Table 8. Distribution of the currently operating base stations IMT MC-450 & IMT 2000/UMTS in Federal Regions, Russia, 2012
Table 9. Number of currently operating RES base stations of the main operators of mobile wireless communication in Russia, 2012
Table 10. Number of base stations of 2G & 3G of “Big 3” operators and “Rostelecom” in 2010 – 2013, thousand stations
Table 11. Number of base stations 3G “Rostelecom”, by Russian regions
Table 12. Sales volumes of phones and 3G phones in 2012 and 1Q 2013, in pcs.
Table 13. 3G penetration in Russia
Table 14. 3G penetration rate in the world in 2012, %
Table 15. Three scenarios for LTE networks development in Russia until 2020
This Information Note is Prepared by J’son & Partners Consulting, We strive to provide factual and prognostic data that fully reflect the situation and are available to us before issuing the material. J’son & Partners Consulting reserves the right to revise the data after publication of new official information by the market players.
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