2011 Global Mobile Communications - Insights into Worldwide Developments

Mobile sector increasingly reliant on smart phone growth

The success of smart phones has changed the face of the mobile sector and in 2011 it is no longer possible to discuss this industry without acknowledging their impact. The resilience of the mobile sector under such challenging market conditions can be partly attributed to the continuing growth of smart phone sales, which now account for around 20% of all handset sales on a global level. Smart phones have become particularly popular in the developed markets where they offer a more user-friendly and interactive alternative; while this trend will continue for the near future, Asia, particularly China, will lead the growth in the developing markets.

The remarkable mobile industry also continues to grow due to the current opportunities presented by the emerging markets. Operators’ which have focused their attentions on the wireless sector, particularly in the emerging markets; have shown substantial growth compared to others which have continued focusing on saturated or fixed line markets. China and India offer much potential for future growth due to their large populations and BuddeComm predicts all of the low penetration level countries around the globe will see ongoing massive investments in cheap 2G infrastructure and cheap 2G mobile handsets for the near future. Both large carriers and private investors are showing enormous interest in the opportunities presented by these developing markets.

In contrast, with mobile penetration in most developed countries now well above 100%, opportunities to generate further growth will be limited. We are already seeing the mobile voice market declining in revenue, and this is set to continue over the next few years. Mobile broadband is of course a new growth area and it looks like it will continue to be so for the next couple of years; compensating for the decline in voice revenues in the process. However, eventually this revenue growth will also have its limitations.

The real growth that BuddeComm foresees is in the hardware sector (smart phones, tablets, etc) and in the applications. The apps market has changed beyond recognition from the content portals previously dominated by the mobile operators – which did not progress during the last decade – to a totally new industry with literally tens of thousands of new players.

The fact that Vodafone is reviewing its operations is a clear indication that changes are required to adapt to this challenging industry. This large company is struggling with falling revenue, making it increasingly difficult to acquire and retain customers as well as fund its network upgrades and ensure that it successfully bids for spectrum and licences when they become available.

BuddeComm’s new report, Global Mobile Communications – Insights into Worldwide Developments, gives the latest insights into the global mobile communication sector. It explores key issues and opportunities and provides analyses, statistics, forecasts and trends.

The report includes broad statistical information and insights into subscribers, ARPU, CAPEX, mobile revenue, mobile termination rates and roaming. It includes a unique perspective into how the mobile sector is unfolding differently around the world by incorporating regional overviews written by BuddeComm’s senior analysts.

The report also includes a case study on Vodafone which examines its current position in this challenging environment. Please note: Mobile broadband is covered in detail in a separate BuddeComm annual publication.

Examples of key insights:

• In 2011 global telecoms CAPEX should increase due partly to investments in mobile infrastructure;
• While mobile ARPU levels differ widely between the regions of the world, on the whole all regions have experienced declines in ARPU over the past few years – and this is set to continue in the current economic environment;
• International roaming charges and mobile termination rates have finally begun to drop due to both competition and the introduction of regulations and price capping;
• While the Apple iPhone is one of the most high profile of the smart phones, in 2011 the Google Android Operating System leads the iPhone in terms of global market share;
• The success of smart phone, in particular the iPhone, is both a blessing and a curse for the mobile operators. On the one hand it has broken into the monopolistic business models used by most operators and has most certainly loosened part of their stranglehold; on the other, these phones have increased usage on their networks;
• In 2011 there are well over 5 billion mobile subscriptions worldwide and trillions of text messages are being sent every year. As mobile phone use continues to grow in popularity; interest continues in comparing the cost of mobile service packages around the world;
• Although mobile communications have been driving Europe’s general telecom sector in recent years, accounting for over half of the sector's revenues, it is facing a number of issues which will have considerable implications for revenue, business models and investment opportunities in coming years;
• Mobile penetration in Africa has passed 50%;
• Improving competition is evident in the Middle East as over half the national mobile markets are now served by three or more competing operators;
• Asia had over 2.6 billion mobile subscribers going into 2011 and was home to eight of the top 10 mobile operators in terms of subscriber numbers in the world;
• Mobile subscribers are continuing to rise with 3 operators in the NZ saturated market;
• In Australia, total mobile revenue is expected to grow around 10% in 2011.

Data in this report is the latest available at the time of preparation and may not be for the current year.