16.1 mln 3G subscribers worldwide by year-end 2004

Fact recorded on: March 6, 2005. Categories: 3G.

The subscriber numbers for UMTS (3G) technology are growing in leaps and bounds worldwide. With growth rates of more than 1,200% year-to-year at the end of 2003 and around 500% year-to-year in 2004 some telecoms associations are already waxing ecstatic about 3G’s “rapid breakthrough” and sweeping success. Their announcements are reminiscent of the headlines back in the days of the dotcom bubble. At the time, modern information and communication technologies, especially mobile telephony, were being hailed as stimuli for the entire economy. But not long after the hype died down at the turn of the millennium, the mood changed radically. Because high expectations had been dashed, innovations of every type were then eyed with great reservations. This lack of differentiation was a handicap that still afflicts the widely discussed 3G technology in some countries today.

It seems like a good idea to scrutinise the positive notes on 3G now coming from the telecommunications industry on the basis of the statistics. It should be generally borne in mind that optimistic reports on the growth of subscriber numbers do not necessarily go hand in hand with the commercial success of a technology. Despite an increase in the penetration rate the average revenue per user can easily decline so much that earnings will fall. This phenomenon was observed when the second generation of mobile telephony was launched in the market.

IT Facts - data and research from the information technology world

Disregarding the commercial aspect, though, the statistics undisputedly show that 3G is gaining market share from 2G. However, the impressive growth rates cited above are based on the absolute number of subscribers, which – as is common when new products are launched – is initially low. This statistical effect sometimes leads people to misinterpet the importance of the market. Currently, 16 mln people use 3G-enabled phones worldwide – a mere 1% of all mobile subscribers.

Turning away from the global view, the 3G situation in Germany is very sobering to date. The acceptance of the innovative broadband mobile technology differs considerably from country to country. 3G is particularly popular in Japan, Italy and the UK thanks to the clear strategies pursued by the telecoms companies and content providers there. Fifty percent of all 3G subscribers live in Japan, nearly one in five lives in Italy, and almost one in six in the UK, but only one in 80 lives in Germany. However, even in the countries leading globally, 3G subscribers remain a small proportion of the total number of mobile users. The reading for Japan is not quite 9%, for Italy just over 5% and for the UK just under 5%; Germany trails far behind also in this ranking with a share of 0.5%.

IT Facts - data and research from the information technology world

The current statistics on 3G mobile telephony document that UMTS technology – already declared dead by some – is gaining ground around the globe. As is so often the case, the innovations have needed more time to take root than the market players originally forecast. From a global standpoint, the numbers give reason for hope; from a German standpoint, they are more a reason for worry. Germany risks failing to connect also in the area of innovative mobile telephony. Here especially, the telecommunications companies and content providers have an urgent economic task on their hands: they have to generate customer enthusiasm for a switch to 3G by offering value-added services. Germany cannot afford not to enter the broadband mobile data telephony age.

Latest 3G facts