Communications and Technology Industry Research

Asia’s emerging markets are expected to see mobile subscriber net gains of 573 million by the end of 2012, breaching the one billion mark to close the year, with an estimated 1.06 billion subscribers.

 

Last year, the emerging markets – comprised of eight nations – were home to some 487 million mobile users, accounting for 37.1 percent of Asia-Pacific’s total mobile subscriber base.

 

New analysis from Frost & Sullivan (News - Alert), “Asia Pacific’s Final Wireless Growth Frontier,” finds that the mobile services sector in the emerging Asia-Pac countries earned revenues of $33.27 billion last year and it’s forecasted to reach $61.35 billion by the end of 2013, at a 10.7 percent annual growth rate.

 

Jeff Teh, an analyst with Frost & Sullivan, says more than half of the world’s mobile networks are believed to exist in emerging markets.

 

“Most mature markets in Europe, the Americas and even Asia are fast reaching saturation, adding fewer connections and offering fewer growth opportunities,” Teh says. “As mobile operators in Asia scramble to add another staggering one billion subscribers onto their networks, Asia’s emerging nations offer the most palpable growth prospects, particularly in the rural sectors.”

 

Growing an annual rate of 15.1 percent (2007-2013), the mobile subscriber base is expected to hit 1.13 billion by end-2013 to account for 46 percent of Asia-Pac’s total subscribers. Emerging markets are defined as countries with low tele-density and Internet penetration, and a sizeable population that is largely underserved or completely without telecommunication services. Countries included in this study are Bangladesh, Cambodia, India, Indonesia, Laos, Pakistan, Sri Lanka and Vietnam; all with mobile penetration rates of under 50 percent.

 

“The inherent characteristics across these emerging markets are that they are generally lower-income hence low ARPU segments, with blended ARPU as low as US$3.90 per month in some countries, and subscribers are largely inclined towards prepaid services,” Teh said. “In fact, between 86 and 97 percent of mobile users in these markets are prepaid subscribers.”

 

The challenge for mobile operators and foreign investors is to introduce new business models and flat-rate pricing plans to appeal to these price-sensitive consumers.

 

“Much of the uptake for mobile services will be limited to basic services such as voice calls and text messaging in the near term,” Teh says. “Apart from having to manage the typical regulatory issues and service affordability, operators face a further uphill task of extending network connectivity well into the rural districts while managing operational and capital expenditure in a cost-effective way to maintain healthy profit margins.”

 

To drive the adoption of mobile services among rural communities, some countries have rolled-out initiatives such as village phones, transmission tower-sharing among operators, as well as linking communities with mobile services to facilitate access and payments. Teh believes that such innovation is necessary to achieve the connectivity vision, as wireless technologies will enable Internet access in these areas.

 

“One of the most compelling features of wireless networks in emerging markets is the ability to provide a faster and cheaper alternative to desktop computers for accessing the World Wide Web, especially considering the lack of fixed-line infrastructure and power sources,” Teh said. “Some tariff plans such as getting paid to receive calls are risky, although revolutionary, and will only be possible when mobile advertising takes off in a big way.”

 

For more information about Frost & Sullivan, visit http://www.frost.com