SNL Kagan (http://www2.snl.com/media_comm/) has an article out today discussing the potential upgrade to 4G wireless networks. The article quotes a recent forecast (http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-520862.html) from Cisco Systems (NASDAQ:CSCO) with some astonishing statistics:
• Global mobile traffic will exceed two exabytes/month by 2013 (An exabyte is equal to: 1 billion gigabytes; 1,000 petabytes; 250 million DVDs);
• Global mobile traffic will increase 66-fold in five years;
• Nearly 64% of the world's mobile traffic will be video by 2013;
• Mobile video will grow at a CAGR of 150% between 2008 and 2013;
• Mobile broadband handsets with higher than 3G speeds and laptop air or data cards will constitute more than 80% of global mobile traffic by 2013;
• Latin America will have the strongest mobile growth at a 166% CAGR, followed by the Asia Pacific region at 146%; and
•Asia Pacific will account for one-third of all mobile data traffic by 2013.
Despite competion and slowing wireless subscriber growth I think AT&T (NYSE:T) and Verizon (NYSE:VZ) are winners as the upgrade path will consume capital gradually and data ARPU will offset voice pressures. If cable companies can charge for ad-ons like digital cable, HD, and DVRs, telcos should be able to charge for incremental data consumption.
Obviously, the trend toward data is great for smartphone providers. Apple (NASDAQ:AAPL) and Research in Motion (RIMM) remain in the driver's seat as a rising tide of penetration lifts all boats.
CSCO, T, and VZ are held in Northlake client accounts including my personal accounts.