"Connections are expected to reach 4.99 billion by 2012, with revenues growing to US$1,019 billion," according to Steven Hartley, senior analyst, Ovum.
According to Ovum, emerging markets are the engine of connection growth in the mobile market, and the next 4 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¡Çs mobile connections," said Hartley. The research firm forecasts that penetration will 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 4 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 revenue side, in absolute terms the sheer scale of the emerging markets will be their main revenue driver. However, an average revenue per user (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 revenue growth of 96% over the next 4 years is "not to be sniffed at" but it is driven by far lower spending customers.
The firm advised that 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".
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