Before the full impact of the recession was known, Ovum had predicted that global mobile services revenues would breach $1 trillion in 2010, but it’s now forecasting that barrier will be broken a year later, in 2011. And, along with worldwide mobile revenue growth, revenues in the Asia Pacific region for mobile services are predicted by Ovum to grow to $290 billion in 2011.
Ovum’s Nathan Burley says the greatest impact of recessionary forces is seen in the short term, and he has revised Asia Pacific revenue growth forecasts for 2009 down to 8% from 10% in previously published figures, and projected a CAGR from 2008 to 2013 remaining relatively stable at 6.6%.
“The recessionary impact on mobile in Asia, will be relatively muted, and led by China and India, mobile service revenue will continue to grow”, says Burley.
“By 2014 Ovum expects total Asia-Pacific mobile operator service revenues to reach $326 billion,” Burley says, adding that voice will continue to be the largest revenue generator worldwide, accounting for 69% of revenues on a global basis and 66% in Asia-Pacific.”
As a result, says Burley, voice will continue to be mobile’s ‘killer app’, and he says operators must not ignore this fact in the race for data revenues.
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According to Burley, by the end of 2014 there will be 6.42 billion connections, up 59% from 2008, and a CAGR of 8%. Asia-Pacific will grow at 10% CAGR, with penetration reaching 78%, highlighting potential for further growth.
Senior Analyst at Ovum, Steven Hartley, says that in the Asia Pacific region, China and India will dominate connections and will account for 30% of total worldwide connections by 2014.
“However, the countries’ penetration rates will be just 76% and 69% respectively by 2014. Massive population growth will continue to fuel mobile demand as new, unconnected users join the market.”
Hartley cautions that the enormous growth in connections has financial implications for Asia-Pacific mobile operators as they are expected to grow by 80% from 2008 to 2014, while revenues grow by 40%.
“Furthermore, Asia-Pacific mobile outgoing minutes of usage are set to rise 155% between 2008 and 2014, but voice revenues will rise just 26%.
“Both comparisons highlight the influx of ever-lower ARPU customers from emerging markets and price erosion in mature markets, even for data services.
“Therefore, efficient networks, enabling competitive pricing, will be critical in both highly saturated mature markets and low-ARPU emerging markets,” suggests Hartley.