India and China keep Asia-Pacific mobile a growth area

Details: Michael Schwartz; Category: Trends & Forecasts; 14 March 2007; 11141 views

Asia-Pacific remains a high-growth mobile market (61.3% of last year's revenue) at a time when cellular is fast approaching worldwide saturation. India and China are key to this. Analysis to support this view comes from consultants Frost & Sullivan in its report Benchmarking of Service Providers in Asia-Pacific...

The booming economies of China and India are fuelling the growing demand for telecommunication services in the Asia-Pacific region. Benchmarking of Service Providers in Asia-Pacific, new analysis from Frost & Sullivan, reveals that Asia-Pacific telecoms - covering 12 major economies ex-Japan and including fixed, mobile, Internet and data communications - earned revenues of US$181.4 billion in 2006. By the end of 2012 revenues are estimated to reach US$298.2 billion.

Mobile services accounted for the bulk of telecom revenues in 2006 at 61.3%, while fixed, Internet and data communications services accounted for 25.4%, 8.9% and 4.4% respectively.Fixed telephony subscribers in Asia-Pacific totalled 402.2 million in 2006, and are forecast to grow at Compound Annual Growth Rate (CAGR) of 2.7% from 2006 to 2012, driven mainly by the subscriber growth in China and India but also in Indonesia and Thailand, which also have large populations and low household penetration rates.

Why mobile still witnesses growth

Research analyst Karpagam Palaniappan notes that Asia-Pacific is still one of the few surviving high-growth mobile markets at a time when the cellular industry is fast approaching saturation globally. In 2006, the cellular subscriber base was 819.5 million (ex-Japan) and is forecast to reach 1.68 billion by end-2012, at a CAGR of 10.8% from 2006-2012. The region?s robust growth is fuelled by China, India, Indonesia and the Philippines, which are now moving into the untapped rural areas to take advantage of low penetration rates and sustainable growth.

Analyst Palaniappan identifies several challenges to Asia-Pacific telecoms: deregulation, economic conditions, inadequate awareness of emerging technologies, low household penetration levels, and service quality issues. All these negatively impact both consumers and service providers.

More specifically, IP telephony is singled out: it has relatively low impact in Asia-Pacific due to regulatory uncertainty, lack of bandwidth, interconnection, and quality of service issues. Similarly, technologies such as 3G, WiMAX and FTTx (Fibre-To-The-Exchange), which are rapidly gaining popularity worldwide, are only just emerging in Asia.

The key factors shaping the growth of the telecom industry are likely to be intense competition and market consolidation, coupled with innovations and investments in emerging technologies, as well as improving the quality of customer service.

The Benchmarking of Service Providers in Asia Pacific is part of the Frost & Sullivan Communications Services subscription and includes research on 12 countries. A virtual brochure is available by emailing Letticia Leopold, Corporate Communications, at This email address is being protected from spambots. You need JavaScript enabled to view it., and by supplying full name, company name, title, telephone number, fax number, city, state, country and e-mail address.

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