In 2008, 45 new commercial WCDMA networks, 42 new HSDPA networks, and 34 new HSUPA networks were launched. Up to 90% of the existing WCDMA networks have been upgraded to HSDPA. It is predicated that by 2013, the number of the world's fixed broadband subscribers will reach 600 million, while the number of mobile broadband subscribers will triple to 2 billion. With worldwide commercial use of 3G technologies, especially HSPA, the world is poised to exploit the full value of mobile broadband (MBB). Not unlike the gold rushes of the past, the rapid growth of mobile broadband subscribers and development of supporting technologies has precipitated an extraordinary surge in industry growth. The wealth potential is clear but having the means to locate, identify, extract, and refine this rich source of income is something else.
With numerous profitable opportunities, telecom operators have to drill down to focus on local environments, including the regional government telecom industry policy; the development stage of the local mobile broadband market; existing and likely market competitors; operational risks; and all current assets from network to customer, partner, brand, and human resources. It is commonly accepted that the greater the investment, the greater the return. However, the downside is that operational risk generally matches investment. In Huawei's experience, successful operators continually evaluate both the gains and the risks related to its role in any market. Pioneers in the mobile broadband market, such as NTT DoCoMo, Vodafone, and Hutchison Telecommunications, have subsequently set many valuable examples for us in terms of meeting marketing demands within the constraints of macro environments and their own, pre-existing resources.
Huawei's operator-based experiences indicate that, to realize new opportunities and challenges in the industry, telecom operators must learn to cooperate with appropriate combinations of other participants in the same value chain. According to KPMG, while 2G network operators and portal service providers typically earned 95% of all profits in the telecom industry, projections suggest that operators will be able to gain only 50% of profits from the mobile broadband market. The relationship among participants in the industry value chain is becoming increasingly complex, but correlative dependence on each other rises at the same time. Cooperation among different participants related to profit sharing, management, and technology needs to become mature. A new business model is vital for accelerated industry development.
