Migration to 3G services is a global trend as 2006 is the year in which 3G is gathering momentum. In terms of indicators, in Western Europe net additions to WCDMA accounted 95% of total regional net additions in the first quarter. This indicates that market migration to 3G in 2006 is going to be far higher than originally expected.
Figure 1 Migration to 3G in Western Europe, % sequential net additions: GSM vs WCDMA
Source: Wireless Intelligence
Asia is, more heterogenous and fragmented; 3G leaders such as Japan and Korea rub shoulders with markets where licences have yet to be awarded. Leading markets, such as Japan and Korea, have been showing declining 2G subscribers for some time now. KDDI's au Corp brand now has less than 800,000 customers on cdmaOne networks (compared to 22.8 million on CDMA 1X and EV-DO), while NTT DoCoMo is upgrading around 1 million 2G subscribers to 3G each month: it has 26.2 million WCDMA customers. NTT DoCoMo announced that it would accept vendor proposals on LTE-compliant equipment in July, foreshadowing its closure of the 2G PDC network.
In Australia, WCDMA subscribers passed the 1.6 million mark at the end of June 2006 (8% of connections) and 3G is an increasing part of the portfolio mix of all operators. Looking ahead, we expect Telstra's migration to UMTS 850 to boost the 3G base still further.
Outside Japan and Korea, Hong Kong currently has Asia-Pacific's highest proportion of 3G subscribers, at 14% of total subscribers. In fact, 2G subscribers have declined every quarter since Q1 2005 as users migrate to 3G. We expect close to 20% of connections will be using 3G by the end of 2006.
Despite the lack of a new WCDMA entrant, in Singapore the existing operators are battling it out for subscribers: 10% of the user base had migrated to 3G at the end of May 2006. Total 2G connections had declined 10% by May 2006. We are seeing considerable user interest and we expect connections to also be close to 20% of the user base by December.
In Taiwan (a market with some of the lowest data usage worldwide) around 8% of the subscriber base has moved to 3G; however, not all have 3G handsets. New entrants Vibo and Aurora (an MVNO) along with the GSM operators are stepping up the competitive pace.
