2012 Global Mobile Communications - A Keystone for Industry Growth

Mobile industry continues upward growth despite market conditions

Considering the enormous pressure the economic downturn has placed upon industry growth in general around the world – the mobile sector could well be the envy of other sectors when taking stock of the overall picture. Subscriber growth is still on the rise with the developing markets offering further opportunities for growth; there is a growing demand for higher bandwidth multimedia services offered by smart phones and around the world there are continuing technology developments via the deployment 3G and 4G services.

Wireless services can be considered a keystone for telecoms industry growth and industry players around the world are competing heavily for a lead position in these developments. Some of the leading carriers in terms of revenue include AT&T, NTT, Verizon, Deutsche Telekom, Telefonica, China Mobile, Vodafone, France Telecom, America Movil and KDDI. America Movil recently reported strong revenue growth due partly to its operations in Mexico and Brazil.

Unlike the fixed market, the mobile market is, in general, competitive – with some good products and prices arriving in the market. This, in turn, has driven demand for mobile broadband. However it is important to realise that this growth has as much to do with affordability as it has to do with the technical innovations in and around smartphones.

Despite the positive future ahead for the mobile sector – it must also be acknowledged that many carriers are currently facing financial woes, with stagnating revenues, declining ARPUs and increasing competition from other types of players like Apple. The traditional mobile communications business models are rapidly becoming out-of-date and unless the mobile operators change their models, others, such as the new competitors or the regulators, will start doing it for them. Most mobile operators were taken by surprise by the effect of the smartphone. They have lost leadership in the mobile market and will now at least have to share their powerful position with others, such as Apple and Google (Android).

Another looming issue around the world is the allocating of mobile spectrum. The fact that businesses are knocking on the doors of their governments asking for spectrum is a clear indication that this “telco real estate” market is hotting up. The reason for this is not too hard to guess – the enormous growth in the demand for mobile broadband. There is a large amount of pent-up demand because initially the mobile operators didn’t want to open up this market while they were in the middle of adding new customers to their mobile voice services. Governments are also beginning to see spectrum auctions as a way to generate funds in fragile economic times.

BuddeComm’s new report, Global Mobile Communications – A Keystone for Industry Growth, provides important insights into the worldwide mobile communications industry and includes trends, analyses, statistics and case studies. The report provides a valuable overview of the global mobile communications industry including key statistics such as global and regional subscriptions; mobile services revenue; ARPU; CAPEX and churn. This report includes a global overview of handset, smartphone and touchscreen tablet trends and statistics. It provides insights into why it is time the telcos focused back on the customer and how spectrum allocation is a key issue for the future. Information at a regional level is provided for North America, Europe, Middle East, Africa and Asia Pacific, written by BuddeComm’s Senior Analysts. A detailed case study on the emerging market of Brazil is also included. Please note: Mobile broadband is covered in detail in a separate annual publication. 

Examples of key insights:

• Smart phone sales now account for over a quarter of all handset sales. This has risen sharply in just two years and is forecast to grow further.
• Voice services are still an important component of revenue generation, accounting for around 75% of revenues in developing markets and 70% in developed markets.
• The next phase of mobile technology and services rests upon the development of wireless broadband and in particular the 4G technology, Long-term evolution (LTE). In the interim however, mobile users continue to utilise the 2G, 3G and 3.5G (HSPA) services on offer, with around 1.8 billion 3G subscribers expected worldwide by the end 2012.
• In Africa, the greatest demand for mobile devices is in the major cities; however cellular solutions are also being employed to increase accessibility in rural and other disadvantaged areas.
• Although mobile communications have been driving Europe’s general telecom sector in recent years, accounting for over half of the sector's overall revenue, it is facing a number of issues which will have considerable implications for revenue, business models and investment opportunities.
• In Asia, overall regional penetration had reached an estimated 83% going into 2012, suggesting there was still more room for subscriber growth across the region.
• Around half the mobile subscribers in the world are to be found in Asia.
• 2degrees, the newest mobile network operator in the New Zealand market, has grown on average by 1,000 subscribers a day since launching in 2009.
• In early 2012, Telstra was still the largest provider of mobile services in Australia, commanding a total market share of roughly 44%.
• The wireless market in Canada and the USA has experienced rapid growth since the 1980s, driven by advances in cellular technology, the deregulation of the telecom industry and significant switching among consumers from wireline to wireless services.
• In the Middle East, competition continues to drive subscriber growth due to high prepaid levels, emerging MVNOs, demographic trends and mobile broadband.

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