REGIONAL FORECAST REPORT NORTH AMERICA TELECOMS MARKET …€¦ · Core Forecasts, European Country...

North America telecoms market: trends and forecasts 2016–2021

© Analysys Mason Limited 2016

REGIONAL FORECAST REPOR T

NORTH AMERICA TELECOMS

MARKET: TRENDS AND FORECASTS

2016–2021

ROMAN ORVISKY



REPORT COVERAGE

Geographical Key performance indicators

Regions modelled:

North America

Countries modelled

individually

Canada

USA

Connections Revenue

Mobile

Handset, mobile

broadband,1 M2M2

Prepaid, contract

2G, 3G, 4G

Smartphone,

non-smartphone

Fixed

Voice, broadband,

IPTV, dial-up

Narrowband voice,

VoBB

DSL, FTTP/B, cable,

BFWA, other

Mobile

Service,3 retail

Prepaid, contract

Handset, mobile

broadband,1 M2M2

Handset voice,

messaging, data

Fixed

Service,3 retail

Voice, broadband,

IPTV, dial-up, BNS

DSL, FTTP/B, cable,

BFWA, other

ARPU

Voice traffic Mobile:

SIMs, handset

Prepaid, contract

Handset voice, data

Fixed and mobile

Outgoing minutes,

MoU

2

This report provides:

a 5-year forecast of more than 170 mobile and fixed KPIs for

North America as a whole and 2 key countries

an in-depth analysis of the trends, drivers and forecast

assumptions for each type of mobile and fixed service, and for

key countries

an overview of operator strategies and country-specific topics,

in order to highlight similarities and differences by means of a

cross-country comparison

a summary of results, key implications and recommendations

for mobile and fixed operators.

Our forecasts are informed by on-the-ground regional market

experts from our topic-led research programmes and our

consulting division, as well as external interviews.

In addition to our robust set of historical data, our forecasts draw

on a unique and in-house modelling tool, which applies a rigorous

methodology (reconciliation of different sources, standard

definitions, top-down and bottom-up modelling).

For the complete data set, see the accompanying Excel file at

www.analysysmason.com/NA-telecoms-forecast-Oct2016.

About this report

1 Includes USB modem, and mid- and large-screen, but not handset-based data.

2 M2M connections and revenue figures include mobile services only.

3 Service revenue is the sum of retail and wholesale revenue.


© Analysys Mason Limited 2016 3

7. Executive summary

8. Telecoms retail revenue in North America will grow marginally between

2015 and 2021

9. Spending on both fixed and mobile data will drive revenue growth

10. Regional trends follow the USA, but revenue in Canada will grow more

strongly

11. Key trends, drivers and assumptions for the mobile and fixed markets

12. Key implications and recommendations for telecoms operators

13. Regional forecasts and cross-country comparison

14. Geographical coverage: The USA contributes over 90% of the region’s

revenue

15. Market context: Higher dependency on the resource extraction sector and

unfavourable exchange rate movements affect Canada’s economy

16. Revenue and ARPU: Increasing data spending will drive revenue growth

17. Mobile penetration: A growing population, lower prices and increasing sales

of connected devices will drive up mobile penetration in the USA

18. Mobile connections: Even low-end connections will be 4G by 2021

19. Smartphones and LTE: Smartphones will be near-universal by 2021

20. Mobile broadband: Almost all mobile broadband connections in the region

will be LTE-based by 2018

21. Mobile ARPU: Service revenue in Canada is growing, but competition and

the elimination of device subsidies is driving it down in the USA

22. Data and revenue by generation: Nearly all mobile revenue will come from

4G by 2019

23. Fixed services: Cable will continue to dominate the broadband market, but

FTTP will grow strongly

24. Fixed broadband: Revenue growth will have to come from price increases

as the potential for further user base growth diminishes

25. Key drivers at a glance for each North America market

26. Key drivers at a glance table: methodology [1]

27. Key drivers at a glance table: methodology [2]

28. Individual country forecasts

29. Canada: Retail revenue will peak in 2018, due to declining voice revenues

and a saturated fixed broadband user base

30. Canada – mobile: Growing take-up of more expensive services and lack of

price competition will drive revenue growth

31. Canada – fixed: Gigabit access rollout and limited regional competition will

support broadband revenue growth

32. USA: Fixed broadband will be the main source of revenue growth

33. USA – mobile: Competition and the decoupling of service and device

contracts is driving down service revenue

34. USA – fixed: Consolidation will have a limited effect on consumers, due to

regionalised operator footprints

35. About the author and Analysys Mason

Contents



36. About the author

37. Analysys Mason’s consulting and research are uniquely positioned

38. Research from Analysys Mason

39. Consulting from Analysys Mason

Contents



Figure 1: Telecoms retail revenue by service type and total service revenue

(retail and wholesale), North America, 2011–2021

Figure 2: Telecoms retail revenue growth by service type, North America, 2015–

2021

Figure 3: CAGRs for fixed and mobile retail revenue (2015–2021), by country,

North America

Figure 4: Summary of key trends, drivers and assumptions for North America

Figure 5: Mobile connections by technology generation and NGA share of fixed

broadband connections by country, North America, 2021

Figure 6: Metrics for the two countries modelled individually in North America,

2015

Figure 7: Telecoms retail revenue by service type, fixed voice and fixed

broadband ASPU, and mobile ARPU, North America, 2011–2021

Figure 8: Telecoms retail revenue by service type, total service revenue and

growth rates, North America, 2015–2021

Figure 9: Connections by type, and growth rates, North America, 2015–2021

Figure 10: Active mobile SIM penetration by country (excluding M2M), North

America, 2011–2021

Figure 11: Mobile connections by technology generation (excluding M2M), and

3G and 4G/5G’s share of connections, North America, 2011–2021

Figure 12: Smartphones as a percentage of handsets and LTE’s share of total

connections (excluding M2M), North America, 2015 and 2021

5

Figure 13: Mobile broadband connections by screen size and technology, North

America, 2011–2021

Figure 14: Mobile ARPU by country, North America, 2011–2021

Figure 15: Mobile service revenue and ARPU by technology, North America,

2011–2021

Figure 16: Data traffic and revenue per megabyte, North America, 2011–2021

Figure 17: Fixed broadband connections by type, and fixed voice, IPTV and

mobile broadband connections, North America, 2011–2021

Figure 18: Fixed broadband penetration of households by country, North

America, 2011–2021

Figure 19: Major forecast drivers: current situation (2015) and future trajectory

(2016–2021), by country, North America

Figure 20: Methodology for attributing scores to each element in the key drivers

table (current and future) and impact of high scores


(retail and wholesale), Canada, 2011–2021


growth rates, Canada, 2015–2021

Figure 23: Connections by type, and growth rates, Canada, 2015–2021

Figure 24: Mobile, smartphone and 4G penetration rates, Canada, 2011–2021

Figure 25: Mobile ARPU by type, and mobile ARPU, Canada, 2011–2021

List of figures



Figure 26: Summary of key mobile market drivers and assumptions, Canada

Figure 27: Fixed penetration rates by service type, Canada, 2011–2021

Figure 28: Fixed ASPU by service type, Canada, 2011–2021

Figure 29: Summary of key fixed market drivers and assumptions, Canada


(retail and wholesale), USA, 2011–2021


growth rates, USA, 2015–2021

6

Figure 32: Connections by type, and growth rates, USA, 2015–2021

Figure 33: Mobile, smartphone and 4G penetration rates, USA, 2011–2021

Figure 34: Mobile ARPU by type, and mobile ARPU, USA, 2011–2021

Figure 35: Summary of key mobile market drivers and assumptions, USA

Figure 36: Fixed penetration rates by service type, USA, 2011–2021

Figure 37: Fixed ASPU by service type, USA, 2011–2021

Figure 38: Summary of key fixed market drivers and assumptions, USA

List of figures



Figure 16: Data traffic and revenue per megabyte, North America, 2011–20211

22

1 Mobile data retail revenue is defined as revenue from mobile broadband (datacards, dongles and

connected tablets), M2M, handset messaging and handset data and content.

4G accounted for two thirds of revenue in 2015 and its share will

grow to 94% by 2019, reaching 96% in 2021.

4G subscriptions became the main source of mobile revenue in

2014. The migration from 3G to 4G has been slower in Canada,

where 4G only accounted for 51% of revenue in 2015 (compared to

68% in the USA). The USA will also be one of the worldwide leaders in

5G deployment, as Verizon in particular has taken a significant role in

establishing standards for the new technology generation. The

operator intends to launch a fixed-wireless 5G service in late 2017 or

early 2018, although a mobile specification of 5G is still further away.

We expect a small-scale mobile launch by 2020, provided that a

fixed-wireless service arrives by 2018.

Mobile data consumption will grow significantly due to zero-rated

video streaming and shared data plans.

T-Mobile took advantage of lax net neutrality regulations and

launched Binge On in November 2015. This service allows users to

stream video from a wide range of sources (including ESPN, HBO,

NBC and Netflix) without using up their data allowances. Other

operators in the region have also launched mobile-focused video

services, such as Rogers’ Shomi and Verizon’s Go90, although the

former was discontinued in late 2016. We expect the growing

popularity of shared data plans to have a positive effect on data

traffic, as these lower the incremental connection cost per device.

Figure 15: Mobile service revenue and ARPU by technology, North America, 2011–2021

Data and revenue by generation: Nearly all mobile revenue will come from

4G by 2019

2G 3G 4GRevenue:

ARPU:5G



CONTENTS

35

EXECUTIVE SUMMARY

REGIONAL FORECASTS AND CROSS-COUNTRY COMPARISON

INDIVIDUAL COUNTRY FORECASTS

ABOUT THE AUTHOR AND ANALYSYS MASON



About the author

Roman Orvisky (Analyst) is a member of the regional markets research team in London, contributing to the Telecoms Market Matrix, European

Core Forecasts, European Country Reports and Global Telecoms Forecasts programmes. Prior to joining Analysys Mason in November 2014, he

worked in the Transaction Services department of the Royal Bank of Scotland in a customer experience internship role. During his studies,

Roman focused on consumer behaviour in an online context, and has experience in churn modelling in the telecoms sector, social network

analysis and browsing data analysis. Roman holds a Bachelor’s degree in business from Durham University, and an MSc in marketing research

from the Tilburg University School of Economics and Management.



Regional

markets

Digital

economy

Consumer

and SME

services

Telecoms

software and

networks

Regulation

and policy

Strategy

and planning

Transaction

support

CONSULTING

We deliver tangible benefits to clients across the telecoms

industry:

communications and digital service providers, vendors,

financial and strategic investors, private equity and

infrastructure funds, governments, regulators,

broadcasters, and service and content providers.

Our sector specialists understand the distinct local challenges

facing clients, in addition to the wider effects of global forces.

We are future-focused and help clients understand the

challenges and opportunities that new technology brings.

RESEARCH

Our dedicated team of analysts track and forecast the

different services accessed by consumers and enterprises.

We offer detailed insight into the software, infrastructure and

technology delivering those services.

Clients benefit from regular and timely intelligence, and direct

access to analysts.

Analysys Mason’s consulting services and research portfolio

37

Analysys Mason’s consulting and research are uniquely positioned



Research from Analysys Mason

We provide dedicated coverage of developments in the telecoms, media and technology (TMT) sectors, through a

range of research programmes that focus on different services and regions of the world.

38

We provide dedicated coverage of developments in the telecoms, media and technology (TMT) sectors, through a

range of research programmes that focus on different services and regions of the world.

To find out more, please visit www.analysysmason.com/research

Researchportfolio

PROGRAMMES

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Service Assurance

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SME Strategies

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andnetworks

Network technologies

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Consulting from Analysys Mason

For 30 years, our consultants have been bringing the benefits of applied intelligence to enable clients around the

world to make the most of their opportunities.

To find out more, please visit www.analysysmason.com/consulting

39

Consultingportfolio

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EXPERTISE

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PUBLISHED BY ANALYSYS MASON LIMITED IN OCTOBER 2016

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REGIONAL FORECAST REPORT NORTH AMERICA TELECOMS MARKET …€¦ · Core Forecasts, European Country...

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