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Bringing Wireless Broadband to Vertical Markets. A High-Margin Revenue Stream for Operators and Compelling Services for Enterprises and Public Entities
Senza Fili Consulting, Sep 2008
Vertical applications are one of the best growth opportunities available to wireless operators in developed markets where retail subscribership is reaching saturation and ARPUs are stagnant. Vertical applications for the enterprise open an entirely new market that wireless operators have this far neglected. Even in emerging markets, enterprises are underserved and the prospective market promises to be profitable for operators.
For wireless operators, vertical applications can be quite attractive: revenues per connection may be lower (but not necessarily so for applications that require broadband), but so are churn and customer acquisition costs, while contracts often extend to 10 years and devices do not require subsidies.
Enterprises, too, stand to benefit from vertical applications, by reducing their capital (if they operate their own telecom infrastructure) and operating costs, and increasing the efficiency of their operations—in some cases, radically transforming them.
Vertical applications promise to radically change the wireless industry. The focus will no longer be exclusively on connecting people. Wireless operators will be able to connect the entire environment—people, vehicles, and machines. Several factors are encouraging this transformation:
- Vertical markets are largely underserved—but demand is growing fast, and it is an opportunity specifically well suited to WiMAX and LTE operators
- Vertical applications will be crucial to the success of WiMAX and LTE operators: they can accelerate the progress to profitability with a very limited marginal cost of support
- Vertical players are showing a keen interest in mobile broadband functionality to improve their operations and reduce costs
But it is not easy to address vertical markets:
- Operators need to understand the specific requirements of vertical players
- Vertical markets are fragmented and require support for a wide range of applications
- New business models and marketing approaches are needed to address vertical players' requirements and expectations
This report from Senza Fili Consulting looks at the opportunity that vertical applications offer to wireless broadband (3G, WiMAX, LTE) operators worldwide. It combines an extensive forecast with an in-depth analysis of the industry drivers.
REPORT HIGHLIGHTS
Extensive forecast of vertical market applications for 3G, WiMAX, and LTE (2008-2014)
- Regions Asia Pacific, North America, Western Europe, Eastern Europe, Latin America, Middle East/North Africa, Sub-Saharan Africa
- Countries Argentina, Australia, Brazil, Canada, China, France, Germany, India, Italy, Japan, Korea, Mexico, Spain, Russia, UK, USA
- Technologies 3G, WiMAX, LTE
- Devices M2M, In-Vehicle, Mobile
- Applications Telemetry, Vehicle Telematics, Financial Transactions, Building Monitoring, Surveillance, Content Delivery, Mobile Workforce
- Segments Utilities, Transportation, Healthcare, Enterprise, Education, Security and Safety, Government
Detailed data available for each country and region
In addition to the data available on a global or regional basis, the following forecast data is provided at the country and regional levels for the 2008-2014:
- Connections, market share, and service revenues by application (Telemetry, Vehicle Telematics, Financial Transactions, Building Monitoring, Surveillance, Content Delivery, Mobile Workforce)
- Connections, market share, and service revenues by device type (M2M, In-Vehicle, Mobile)
- New devices sold and sales revenues by device type
- Connections, market share, and service revenues by segment (Utilities, Transportation, Healthcare, Enterprise, Education, Security, Government)
- Connections, market share, and service revenues by technology (3G, WiMAX, LTE)
- Vertical connections and service revenues as a percentage of retail connections by technology
- Connections and service revenues split by technology and application in 2014
- Connections and service revenues split by technology and device type in 2014
Key results by 2014
- Vertical applications will generate US$43 billion in service revenues
- Vertical connections will be equivalent to 7% of retail wireless broadband connections
- The largest market for vertical applications will be Asia Pacific, with 29% of connections
- Vehicle telematics and connectivity to the mobile workforce will be the two main applications
- Vertical connections equal 24% of WiMAX retail connections, 16% of LTE retail connections, and 8% of 3G retail connections
Audience
3G, WiMAX, and LTE operators: Evaluate the opportunities offered by vertical applications; see which applications, enterprise segments, technologies, and devices will generate the most revenues and be in highest demand; compare your market to others worldwide; help you define your vertical market strategy.
Module and device vendors: Quantify the market for M2M, in-vehicle, and mobile devices by country and region; understand how different technologies, market segments, and device types will be driven by different applications; assess the market potential for devices you have introduced or plan to introduce in the market; get a better understanding of the value proposition of vertical applications for 3G, WiMAX, and LTE operators.
Chipset and infrastructure vendors: Understand the implications of the growth in vertical market connections for infrastructure and device requirements; assess the impact that vertical connections will have on the demand for 3G, WiMAX, and LTE equipment; explore the market dynamics; and discover your best positioning within the competitive environment.
Application developers, system integrators: Size the market and revenue opportunity for your business and in your geographical area and compare it to other markets; get insight into how 3G, WiMAX, and LTE operators are approaching the vertical enterprise market and how substantial the opportunity is for them; explore the role that you can play to push the adoption of vertical applications and the partnership opportunities with other ecosystem players.
Investors: Analyze the drivers behind the growth in vertical connections; assess the impact that vertical applications will have on 3G, WiMAX, and LTE operators, vendors, and the enterprise; examine the impact of geography, applications, devices, the enterprise segment, and technology on the overall market for vertical applications using wireless broadband networks.
Anyone working on retail and consumer wireless services: Explore an entirely new area in wireless telecommunications that will enable wireless operators to expand to a new, underserved market with huge potential over the next few years.
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