2011 USA - Mobile, Broadband, Digital Media and Forecasts

Broadband and 4G networks spearhead telecommunication market developments

Buddecomm’s latest USA Annual Publication, ‘2010/11 Telecoms, Mobile and Broadband in the USA’, details the fixed-line, mobile and broadband markets in the USA. The publication also examines Internet trends and the emergence of new telecommunication services such as VoIP and IPTV. The report also profiles developments in the broader digital economy, including smart energy grids and the nascent e-health, e-government and e-education sectors.

US mobile subscriber numbers increased to over 300 million by early 2011. Although penetration levels are reaching saturation, mobile data revenues increased by around 23% year-over-year to December 2010 and are expected to continue to grow at very high rates between 2010 and 2015. Increases in data ARPU in particular are largely offsetting the ongoing decline in ARPU for voice services.

In early 2011 the US was still trailing its OECD counterparts in terms of broadband penetration, speed and affordability. Nevertheless, the market is currently witnessing significant investment activity in FttH deployments, DOCSIS 3.0 upgrades, mobile broadband network rollout and municipal wireless broadband activity. Despite the growing developments in FttH, WiMAX and 3G networks, broadband service in most regions is still generally limited to one DSL and one cable operator. Strong subscriber and revenue growth rates during 2010 have confirmed VoIP’s position as a widely used telecommunications service in the US.

This report contains overviews, analyses and detailed statistics of the US fixed-line, mobile and broadband markets including their sub-markets such as DSL, cable, FttH, wireless broadband, utilities broadband, the Internet, VoIP and IPTV.

Key Highlights:

• The US mobile industry has shown considerable growth since 1999, reaching over 96% subscriber penetration by early 2011.
• By early 2011 the big-three mobile operators (AT&T Mobility, Verizon Wireless, Sprint Nextel) held around 79% of the market, and the big-four (including T-Mobile) around 90%. In March 2011, however, AT&T announced it had agreed to acquire T-Mobile USA from Deutsche Telecom, a deal which would consolidate AT&T as the dominant wireless provider in the US with the acquisition of a further 33 million subscribers.
• Meanwhile Verizon is expected to increase its market share during 2011/12 following the launch of its iPhone offering in February 2011. The launch came after more than four years during which AT&T enjoyed exclusivity with the hot-selling iPhone. Furthermore, the strong growth of Android will also aid subscriber growth of Verizon, the primary carrier of Android handsets in the US. The Android handsets have also underpinned Verizon’s data revenue growth of around 25% in 2010.
• Following the decisions by AT&T and Verizon to adopt LTE as their 4G platforms, the Sprint-Clearwire WiMAX network appeared to be rethinking its strategy. In August 2010 Clearwire announced plans to conduct trials of rival 4G LTE technology, in the hope of creating a ‘multi-mode WiMAX/LTE network’. Similarly, in June 2011 Sprint revealed plans to deploy LTE technology over a 15 year period. 
• By early 2011 cable subscriber numbers surpassed 42 million, with growth slowing from around 12% in 2008 to around 6% in 2010. Meanwhile, DSL subscriber numbers approximated 34 million with growth rates of around 3% being somewhat lower than the previous year of 6%. Hence in early 2011 the US continued to linger at around 14th on the OECD broadband penetration tables, down from 4th place in 2001. In addition, the US ranks around 29th in the OECD in terms of average broadband speeds.
• Nevertheless, by early 2011 many cable operators had achieved their DOCSIS 3.0 upgrade homes-passed goals, with some companies shifting their focus to their hybrid fibre coaxial (HFC) plants.  Similarly, by March 2011 the number of homes passed by FttH was approximately 20.9 million. Of homes passed, over 7 million were receiving television, high-speed Internet and/or telephony services over these networks.
• During 2010 and early 2011 it became increasingly clear that mobile VoIP will become a major segment of the VoIP market over the coming years. For instance, a report released in mid-2011 found that almost 25% of Internet-using American adults were making telephone calls over the Internet via such providers as Skype and Vonage. 

Note: all dollar amounts are US$ unless otherwise stated.