GSM Records Worst Quarter for 15 Years, As 3G Takes the Baton
Q1 08 saw the lowest figure for GSM net additions in Europe in almost 15 years, with just 0.38m new connections. This is an extraordinary result given that in the previous four quarters the GSM base grew by an average of 10m.
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Net Additions, GSM vs W-CDMA
A quick glance at Europe’s largest markets shows that the losses were widespread: Italy, Spain, the UK and France all lost around 1m GSM customers during the quarter. Although Germany and Turkey both managed to boost their GSM numbers, several other smaller markets - including Poland, Czech Republic and Bulgaria - also saw losses.
The beneficiary of this dramatic slump in GSM growth was W-CDMA, which recorded its third highest ever figure for net additions with a quarterly gain of 9.10m. This follows its two highest ever figures in Q3 and Q4 07, when it added 9.24m and 10.99m respectively. Q1 08 was not the first time that raw W-CDMA growth has exceeded that of GSM, but the scale of the discrepancy was unprecedented. In fact, W-CDMA also recorded more net additions on an annual basis by a considerable margin, with 37.49m compared to GSM’s 31.49m. Of course, in real terms GSM is absolutely dominant with 642.85m connections compared to W-CDMA’s 89.97m, but GSM’s market share has fallen considerably in the past year, from 92.0% to 87.6%, as 3G offerings become ever more prevalent and popular.
There are also some European countries which use CDMA technology, mostly in Eastern Europe; the Czech Republic, Belarus, Latvia and Romania account for the lion’s share of the CDMA customer base. In total, there were 1.12m CDMA connections at the end of Q1 08, up 0.24m year on year. In proportionate terms, this represents an annual growth rate of 27.5%, which is considerably higher than the 5.2% GSM growth rate - although, of course, the difference in scale of the two means comparisons are not altogether meaningful.
What is significant is that GSM growth almost halved from 10.0% in the previous year. W-CDMA growth also fell as the absolute numbers grew, but despite a 16.2pp decline, it remained at an impressive 71.4%.
Posted to the site on 15th July 2008
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