Wireless data skyrockets, broadband hits snag.

As 3G services emerge, the wireless data market will skyrocket, according to a study by the Allied Business Intelligence, Inc. (ABI), Oyster Bay, N.Y. During 2000, 100 million users will gain actual direct Internet access to handsets, while hundreds of millions more will be exposed to truncated access services in the next year--the competitive wireless markets will force other operators to deploy truncated access methods. By 2005, the study estimates data users of around 240 million, up from 26 million in 2000.

Thirty-seven operators made WAP (wireless application protocol) announcements as of January. Most handset manufacturers say their WAP-based handsets will be introduced this year. Direct Internet access will be a popular business tool and a consumer application for the high-end adapter, with some exceptions. The only limitation may be the production of GPRS (general packet radio service) handsets, due to be on the market at the end of 2000.

North and South America will see data usage rise after 2002, when IXRTT (intereXchange radio transmission technologies) and EDGE strategies are due to be implemented by leading CDMA and TDMA carriers. The Western Hemisphere will account for nearly 40% of the data market by 2005. Western Europe will have one-tenth of the market in 2000--and close to one-third in 2004--due to the GSM (global system for mobile communications) offering in the area, the movement of GPRS as an evolutionary step before 3G, and the high usage of wireless phones. The Asia-Pacific region will account for more than one-third of data users in 2000, and one-fourth by 2004.

"With GPRS going up in much of Western Europe and truncated access services--such as those based on WAP--gaining considerable momentum worldwide, there is a data market finally at hand which will prove valuable to users and profitable to suppliers," says Larry Swasey, ABI vice president of communications research who authored the study. "As 3G radio channel element upgrades take place and data strategies are placed into mobile wireless networks, the handset will become a much more valuable tool to both the operator and the user."

Meanwhile, problematic rollouts delayed the arrival of broad-band technologies--which raises the value of the wireless broadband market, according to a separate ABI study. The hurdles faced by many service providers, consultants, and their customers include line congestion and slow deployment of DSL and cable modems, the study says.

As a result, service providers are turning to wireless technologies, such as LMDS, MMDS, and PCS systems operating in the various ISM bands (900 MHz, 2.4, 5.1 and 5.8 GHz), which are expected to gain more than nine million subscribers by 2005. MMDS, including the 3.4-3.7 GHz worldwide standard for fixed wireless access, will lead the market with a 70% share in 2005, largely in residential and SOHO sectors.

LMDS will continue to make inroads into the market for high-value customers, accounting for 60% of subscriber revenues in 2005. Traditional wire line and wireless carriers will join small ISPs in using a collection of bands (largely unlicensed) and technologies to address dark spots in their coverage areas.

The 5.8 GHz band is receiving the most attention as unlicensed broadband local loop. Systems operating in this band will account for close to half a million subscribers in 2005. Total shipments of customer premise equipment for high-speed wireless technologies are expected to reach 3.6 million units in 2005.

RELATED ARTICLE: Broadband Fixed Wireless Local Loop Technologies Subscribers, World Market, 2000-2005

YEAR   SUBSCRIBERS
       (Millions)

2000      0.2
2001      0.9
2002      2.0
2003      3.9
2004      6.2
2005      9.4

CAAG     113%

Source: Allied Business Intelligence, Inc.