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August 13, 2009

ABI Research Predicts Growth of Cellular Towers Construction in Asia-Pacific Region

A new study from ABI Research states that the number of cellular towers built in the Asia-Pacific region will witness a huge growth in the next five years. According to the research firm, this growth is mainly because of the surge in demand for mobile services in countries such as China and India.

In 2008, the mobile subscriber base in India grew by about 100 million. This was mainly due to the new operators who got licenses to launch operations, and the 3G auction is just around the corner. The subscriber growth in India is expected to continue with rural expansion, entry of newer operators, 3G and cheaper handsets.
China Mobile (News - Alert) reports that 50 percent of its new subscribers live in rural areas,” says senior analyst of ABI Research, Nadine Manjaro. “Extension of mobile services to rural regions requires many more cell towers and antennas than in urban areas, providing a growth engine for this segment. Increasingly, operators are eager to reduce cell tower costs by means of passive and active infrastructure sharing.”
According to ABI Research (News - Alert), North America and India prefer to outsource the construction of mobile towers to other companies. There operators have been selling cell sites or outsourcing their operation to specialized tower companies. Vodafone (News - Alert) and several other operators have also formed a joint venture with Arquiva to build some 5100 new towers in the region, states ABI.
ABI predicts that the cell tower build-out rate will start a slow decline sometime after 2014. In India operators that share towers can receive a reduction in the 5 percent of revenues from the Universal Service Obligation fund.
Recently, the company announced that 269 million handsets were shipped in Q2 2009. According to ABI, these shipments will build sequentially in a constructive manner, with Q4 2009 potentially marking the industry’s return to better sales. Two companies, Samsung (News - Alert) and LG, did particularly well with 19.4 percent and 11.1 percent share respectively. The research firm informs that LG enjoyed a 2.2 percent increase in percentage points

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Raju Shanbhag is a contributing editor for TMCnet. To read more of Raju’s articles, please visit his columnist page.

Edited by Jessica Kostek


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