Tuesday, September 18, 2012

Asia-Pacific Service Provider Revenue Will be Driven by Wireless

Telecom service provider retail revenue in the Asia–Pacific region is predicted to grow at a compound annual growth rate of seven percent between 2011 and 2016, according to Analysys Mason. 

But compared to past growth patterns, that growth now is driven by mobile services.

Total telecom service revenue will grow by 29 percent from $229.7 billion in 2011 to $323.7 billion by 2016. But notice the revenue components.

The voice market in the region will continue to be heavily dominated by mobile during the forecast period, with 90 percent of the voice connections being mobile by 2016, up from 84 percent in 2011 and from 73 percent in 2008.

Overall, the number of voice connections in the region will increase by 45 percent, to 3.9 billion connections, with most of this growth coming from China and India.

But average revenue per user is clearly declining. Where ARPU was $10 per month in 2008, by 2011 it had dropped to to $7.40 in 2011, Analysys Mason says. In part, that decline is caused by wide adoption of mobile services by people who spend less than early adopters. In part, the decline is caused by users who carry and use more than a single subscriber information module. Mobile ARPU across emerging APAC markets will average $6.5 by 2016.

Perhaps the most significant implication of the Analysys Mason forecast is that revenue growth now will be driven in the Asia Pacific region by wireless and mobile services.

Over the next five years, the key drivers will be 3G and 4G services, which will account for 46 percent of mobile connections in the region by 2016 and the growing demand for Internet access, driving mobile broadband.

China and India together account for 68 percent of the region’s population, 64 percent of its active mobile SIMs and 75 percent of its total retail telecom revenue. Revenue is heavily skewed towards China, where overall telecom revenue will grow from $138 billion in 2011 to $194 billion in 2016.

Analysys Mason also predicts that active mobile penetration rates in the region will rise to 95
percent by 2016, a 32 percent increase over 2011 levels. The number of active SIMs will increase from 2.33 billion in 2011 to 3.7 billion by 2016 as well.

Mobile and fixed wireless will account for more than a third of broadband connections in the emerging APAC region in 2016, and for the vast majority of connections in rural areas where fixed-line infrastructure is unavailable.

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