By the end of 2005, there will be over 1.7 billion subscribers worldwide depending on mobile wireless telephones. Affordable, reliable, and ubiquitous wireless service has profoundly altered the way people access the global communications network. To date, mobile wireless growth has been driven largely by voice traffic. The wireless revolution, however, is now colliding head on with the other great telecommunications phenomenon of recent years—the Internet. The convergence of these two forces in the third generation (3G) of wireless technology represents an enormous new market opportunity.

On a worldwide basis, wireless services are growing much faster than wireline services. INSIGHT's research suggests that wireless revenues will grow from 46.3 percent of all telecommunications services revenues in 2005 to 55.6 percent in 2010—a virtual flip within the five-year period—approaching a trillion dollar market by the close of the forecast period.

Consumers will access 3G wireless data services through different types of handheld, pocket-sized terminals. Tomorrow's 3G mobile wireless devices will be more like personal computers (PCs) in terms of their complexity—with an operating system (OS), client applications, and multiple voice modules. These mobile devices will function as a phone, personal digital assistant (PDA), computer, television, pager, videoconferencing center, newspaper, diary, and even a credit card. Some even think that the new mobile handsets will become indispensable and carried everywhere. Users will be capable of worldwide roaming and receiving customized services based on geographical location. 3G wireless will deliver these capabilities at high speeds, ranging from 384Kbit/s to 2Mbit/s.

The potential revenue associated with wireless data services spurred network operators during the late 1990s to make enormous expenditures on new spectrum licenses for 3G, and to make further huge investments in building the networks themselves. Nonetheless, the promise of 3G is still that—a promise. Discussions of next generation wireless services inevitably come back to the unresolved issue: Who will pay and when?

Consolidation in the wireless industry has led to the presence of a few strong, international competitors in major markets, which in turn has fueled downward trends in airtime prices. While the industry has avoided the competitive free-for-all envisioned by some regulators, significant numbers of subscribers still change from one carrier to another in search of a better deal. Subscribers show little interest in paying for the full cost of the wireless devices they love. It seems unlikely, in turn, that many customers will pay lavish usage-based charges for data access. Based on the dot-com experience, advertising no longer seems to be a cure-all. So how will operators increase revenues?

One opportunity for revenue comes from service or content provider partnerships. Many potential service providers do not have a network, but still provide content services. Operators can establish revenue-sharing arrangements with these content providers in exchange for access to a wireless network provider's customer base.

Another answer may lie with the extraordinary......

Market Segmentation

Impact of New Wireless Data Service Usage on Average Revenue per User
Voice Service
2.5G Data Service
3G Data Service

Wireless OSS Component Mix, 2005 and 2010
Maintenance
Software
Professional Services
Hardware, OS and Middleware

Revenue for 2G, 2.5G, and 3G Market Segments by Region
North America
Europe, Middle East, Africa
Asia/Pacific
Latin America/Caribbean

Global Wireless Carrier, Worldwide Wireless OSS, and Worldwide Broadband Wireless Revenue by Region
North America
Europe, Middle East, Africa
Asia/Pacific
Latin America/Caribbean

Global Wireless Carrier, Worldwide Wireless OSS, and Worldwide Broadband Wireless Revenue by Service Type
2.5G Data Services
3G Data Services
Basic Voice/SMS

Worldwide OSS Revenue
Broadband
Narrowband
North America
Europe, Middle East, Africa
Asia/Pacific
Latin America/Caribbean

Worldwide Wireless Revenue for Voice Support and 2.5G Data Support by OSS Type
Billing Mediation
Bill Rendering
Customer Care
RF Planning
Provisioning/Inventory
Trouble/Service Assurance
Network Management
Fault Management
Workforce Management
Wireless Number Portability
Business Management
Other Planning and Engineering

Wireless OSS Revenue by Services Supported
2.5G Data Services
3G Data Services
Basic Voice/SMS
North America
Europe, Middle East, Africa
Asia/Pacific
Latin America/Caribbean

Wireless OSS and Broadband Wireless OSS Revenue by OSS Type
Billing Mediation
Bill Rendering
Customer Care
RF Planning
Provisioning/Inventory
Trouble/Service Assurance
Network Management
Fault Management
Workforce Management
Wireless Number Portability
Business Management
Other Planning and Engineering
North America
Europe, Middle East, Africa
Asia/Pacific
Latin America/Caribbean