China set to surpass Japan in telecoms services

Peter Dinham
Friday, 24 July 2009 07:10

IT Industry - Market

India and China are running neck and neck at breakneck speed, signing up an astounding 184.5 million new mobile subscriptions between them in just 12 months last year as they vie for the title of the world’s largest telecoms services market.

In India alone in 2008, 113.3 million new mobile subscribers were signed up, while China added 71.2 million subscribers. 

Meantime, the race between China and Japan, which currently holds sway with the largest number of mobile subscribers, continues unabated.

In the Asian region - if figures and predictions just released by telecom research firm, Pyramid Research, are any guide - China looks set to leap ahead of Japan as the largest market in the region on the back of continued demand for connectivity and rising adoption of mobile and fixed broadband services.

Fuelled by mobile penetration into the rural market and by uptake of 3G services, Pyramid predicts China's telecommunications market will generate US$187 billion by 2014, up from US$110 billion last year.

Pyramid analyst, Daniel Yu, says that with continued demand for connectivity and rising adoption of mobile and fixed broadband services, the Chinese market will “increase at a compound annual growth rate of 8.8 percent between this year and 2014, when it will reach $187 billion and surpass Japan as the largest telecommunications services market in Asia."

"China, like many emerging markets, is becoming an increasingly mobile market, adding 71.2 million mobile subscriptions in 2008, roughly 12 percent of all additions worldwide and second only to India's 113.3 million net additions," says Yu, adding that he expects mobile services to account for more than 76 percent of total services revenue in China by 2014.

Despite the declining rate of growth in the economy, Pyramid expects the mobile industry to experience healthy growth in 2009 as mobile operators roll out 3G networks and extend coverage to rural areas, with Yu citing China Mobile as an example, dedicating 30 percent of its total Capex on 2G network expansion, with 70 percent of the allocated portion being used in the rural market.