Consumer, business markets to spend $4.46 billion more on wireless over next four years: IDC forecast

Canada's wireless market is no where near saturated, it seems. Research firm IDC has released bullish predictions for the next four years, with consumer wireless services forecast to generate $3.26 billion in new revenue, followed by $1.2 billion in growth for the Canadian business sector.With forecast annual growth of 9.6%, the wireless services market has emerged as the driving force in Canada's telecom and IT sectors, according IDC's 2008-2012 Canadian ICT Market Forecast.In a sweeping webcast delivered to analysts and IDC customers on June 18, managing director and senior VP of Worldwide Consulting, Vito Mabrucco, stated that the drive for increased productivity among business was combining with consumers' adoption of the "digital lifestyle" to transform wireless into the "future of the telecom franchise."Between 2008 and 2012, for example, IDC predicts the wireless services business market in Canada will grow from $6.61 billion in annual revenue to $7.82 billion. While the consumer wireline sector will actually shrink during this period, growth in consumer wireless services will rise from $8.63 billion to $11.89 billion.With only 62% of the Canadian population currently owning a wireless phone, "there is significantly more head room available" in wireless hardware, service and application sales, IDC predicts.In the next five years, Mabrucco believes businesses will become increasingly savvy in their use of wireless applications and start to demand more in terms of competitive prices, service levels and security. As this demand for lower prices, greater capabilities and higher quality of service grows, wireless vendors and service providers will need to become more "strategic and sophisticated" in the way they deliver wireless options to business users."The key message here is that as roughly 50% of Canadian employees are mobile to some degree. Wireless will go from a ‘nice to have' to a ‘need to have' for most mobile business users," said Mabrucco.He added that the long-term potential of the wireless industry was recently underlined by the federal government's sale of new wireless spectrum, "which has fetched twice the amount for licences as expected." As Rogers and Telus battle for second place in the wireless market and the new iPhone is released in July, Mabrucco said industry watchers should look for, "a big shakeup in wireless prices and more intense competition in the critical wireless segment."3G will be a major driverOne of the most important evolutions in the history of Canada's telecom sector occurred last year when Canadian wireless industry subscribers exceeded wireline subscribers, said Steve Yang, IDC communications research analyst. According to IDC there are now over 20 million wireless subscribers throughout the country.The industry's recent move to a 3G backbone and this network's ability to "bring a totally different experience to the user" will become one of the primary factors in the rise of both consumer and business subscribers, he noted. In the next several years Yang expects to see a significant increase in new 3G-enabled applications such mobile payment systems, mobile radio/television and videoconferencing.Yang added that 3G's capability to enable wireline and wireless networks to interact with each other and provide business users in particular with a seamless user experience would become another key element driving growth in the market. He pointed to Rogers and Fido's new dual-mode WIFI phones as being first out of the gate in this evolving sub-sector.Although Yang doesn't see any Canadian wireless players moving up with the long-term potential of RIM, companies to look out for include Ottawa-based WIFI/WIMAX network solutions provider Belair Networks and access/traffic management software provider, Bridgewater Systems. Another is Toronto-based mobile content facilitator, Tira Wireless.Top 5 to watchIDC's Steve Yang lists the five devices/applications that will drive growth throughout the wireless sector in the next several years:1. Blackberry Email 2. WIFI/WIMAX 3 Unified Communication Services (re. voice, video, data, and mobile applications on fixed and mobile networks)4. CRM access 5. RFID Location Based Tracking Systems

Consumer, business markets to spend $4.46 billion more on wireless over next four years: IDC forecast

News | June 30, 2008

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