In the next four years, developing regions, most predominantly in Africa, will contribute significantly towards global mobile telecommunications subscription growth. This is according to a report released by market research company Pyramid Research.
Between year-end 2006 and 2010, operators around the world will add 1.4 billion subscribers, raising mobile penetration from 44% to 63% (2.8 billion to 4.2 billion). Of these new subscribers, 87% will come from emerging economies, explains the report.
Emerging Asia will hold 52% of net additions, while Africa and the Middle East will hold 19%, explains Pyramid Research analyst and author of the report Leslie Arathoon.
Of the top 20 growing countries in terms of mobile subscriptions, 11 are in either Africa or emerging Asia, notes Arathoon.
Developed Asia and Western Europe, home to most of the subscriber growth over the past 10 years, will account for only 8% of new subscribers over the next four years.
"More developed operators now have to generate revenue through second subscriptions by individuals and other mobile type services."
Carrier profitability
The report shows 74% of mobile subscribers will live in emerging economies, yet they will contribute only 40% of global mobile service revenue generated during the next four years.
Pyramid Research maintains that, through innovation and a focus on productivity over communication, carriers serving these markets can enjoy sustained periods of profitability through detailed understanding of the market.
"Revenue growth will rely on a thorough understanding of the market needs," Arathoon adds.
There is already proof that big profits can be made in developing regions by looking at the revenue generated by MTN, Celtel and Vodacom, she points out.
Arathoon adds that vendor suppliers, like mobile carriers, will have to work in unison with developing markets to create stronger growth and continued subscriber uptake.
Vendors seeking profitability in these regions need to create affordable network and terminal solutions to cater for economically challenged market users. "Only through these means will profitability be experienced on a continued basis."
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