Mobile Data and Emerging Markets are Key to Continued Growth in the Telecoms Market

(Top News, 12 Oct 2009)

In its report, Communications service providers market review, Analysys Mason forecasts that the worldwide telecoms market will grow at a 6 percent CAGR to reach $2.4 trillion in revenue in 2013. This growth will be driven by mobile data services. Communication service providers (CSPs) are launching 3G networks in many emerging markets, such as China and India, and LTE technology will become available in most mature markets during the next few years. Analysys Mason predicts that mobile data traffic will grow at a 131 percent CAGR through 2013.

Roz Roseboro, Senior Analyst at Analysys Mason and author of the report, says, “While mobile data presents the greatest revenue opportunity for operators, it could also be their biggest challenge. They must find ways to monetise that traffic so that all of the value doesn’t go to device manufacturers, such as Apple and Nokia, and content owners. Flat-rate, ‘all-you-can-eat’ plans break the link between traffic and revenue, so are not a sustainable solution.”

The report shows that CSPs have managed their costs successfully in a difficult environment. The global telecoms services market grew by 5 percent in 2008 to reach $1.8 trillion in revenue, despite the economic downturn. Even more encouraging was the year-on-year growth in EBITDA, which stood at a very impressive 10 percent.

Other key findings from the report include:
• Mobile services continue to be the leading source of revenue. Mobile voice services accounted for 36 percent of global service revenue in 2008, and mobile data services accounted for 10 percent, while traditional voice services represented only 21 percent. There are more than twice as many mobile subscribers in the world as there are traditional voice lines – 4 billion versus 2 billion. In emerging markets, mobile services tend to account for an even larger share of service revenue – up to 58 percent, in some cases.
• The mature markets of North America, Western Europe and developed Asia–Pacific accounted for 70 percent of global telecoms revenue in 2008, but the emerging markets registered greater growth rates. Sub-Saharan Africa, the Middle East and North Africa, Central and Latin America, emerging Asia–Pacific, and Central and Eastern Europe all achieved double¬-digit revenue growth in 2008.
• The top-ten CSPs accounted for 44 percent of global revenue in 2008. All of the top-ten operators, except China Mobile, are based in mature markets, but their sources of revenue vary. AT&T, NTT, China Mobile and KDDI generate most of their revenue in their home markets, while Western European leaders Deutsche Telekom, Telefónica, France Telecom, Vodafone and Telecom Italia have significant businesses outside their home markets. A list of the top-100 CSPs is available as a download on the right-hand side of this page.