Tuesday, May 27, 2008

Global mobile revenues

Global mobile market revenues to top US$1 trillion in 2012, says Ovum

Analyst and consulting firm Ovum has recently published its latest forecasts for the mobile market, which highlight the changing nature of the world's wireless markets. "Connections are expected to reach 4.99 billion by 2012, with revenues growing to US$1.019 trillion," said Steven Hartley, Ovum Senior Analyst.

Today, emerging markets are the engine of connection growth in the mobile market and the next four years will see that trend continue. "In particular, China and India will be the two single largest markets on the planet by 2012, accounting for 31% of the world's mobile connections," said Hartley. Ovum forecasts penetration to reach 64% in China and 55% in India by 2012, meaning there will still be growth left in the market.

Asia Pacific's growth will also continue to be strong over the coming four years, although the region covers both emerging markets with massive potential (Indonesia with penetration forecast at 67% by 2012) and mature markets with slowing growth (Australia with 122% penetration forecast for 2012).

Looking into the revenues side, in absolute terms the sheer scale of the emerging markets will be the main revenues driver, stated Ovum. However, an ARPU comparison is illustrative of the key challenge facing mobile operators in these markets. "Despite contributing 37% of connections in 2012, the China-India region is forecast to represent just 18% of revenues," added Hartley. Admittedly revenues growth of 96% over the next four years is not to be sniffed at, but it is driven by far lower spending customers.

Therefore, operators in these markets will need to be extremely efficient to ensure absolute margins justify the enormous costs of building and maintaining mobile networks in these markets. Hartley added, "Interestingly, however, operators originating from these maturing regions are likely to play an increasing role on the global stage, as their sheer scale enables them to buy their way into new markets. We expect emerging players such as China Mobile and Bharti to gain an ever-larger foothold in the global landscape."

Global market wireless connections, 2007-2012 (thousands)

Region 2007 2012

China/India 910,569 1,827,105
Asia Pacific 457,146 654,991

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