2G rules the wireless market to at least 2005

June 5, 2003

In the Americas, wireless data has arrived with a whimper rather than a bang, reports In-Stat/MDR. In addition, data traffic over next generation networks will be dominated by the old 2G mainstay, SMS, through at least 2005. The high-tech market research firm reports that as 2.5G services enter their growth phase, SMS and related messaging products will continue to be the primary drivers of wireless data revenues.

The prospects for 3G services, which are being launched during a seemingly unending telecom slump, look grim. In-Stat/MDR expects that most markets will not benefit from a rise in data revenue until four to five quarters after the introduction of new data services, by which time the new services will have achieved approximately 10-15% penetration of the installed user base. Based on these adoption rates, In-Stat/MDR expects newly launched messaging services such as Multimedia Message Service (MMS) and Instant Messaging (IM) will not reach double-digit (10%) penetration before 2007.

In-Stat/MDR has also found that:

- E-mail remains the most exciting messaging application for wireless Internet users.

- Usage of SMS is increasing in the United States, primarily due to interoperability agreements that are being struck by the leading cellular carriers. SMS provides more limited capabilities than e-mail, therefore, In-Stat/MDR expects that wireless e-mail will still be preferred over SMS. Still, mobile operators must investigate SMS thoroughly, especially as a means of increasing traffic to the mobile Internet through the use of hyperlinks.

- Wireless instant messaging will gain in popularity in the future as well. Users will value the ability to know whether another person is present and available for correspondence.

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last updated: January 12, 2004

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2G rules the wireless market to at least 2005

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