Asia/Pacific Mobile Services Market Boosted by Explosive Demand in India

IDC: India, the world's second largest populated market, is awakening to boost the continued growth of Asia/Pacific's mobile services market. As China enters a period of uncertainly from impending industry restructuring, the meteoric rise in India's mobile subscribers will buoy the region's growth at 11% CAGR over 2006-2010. Total mobile subscribers are forecast to reach 1.05 billion by 2010 for the aggregated 10 key markets of Australia, Hong Kong, India, Malaysia, Philippines, the PRC, Singapore, South Korea, Taiwan and Thailand,.

The mobile services market in APEJ enjoyed buoyant growth in 2005; with subscribers rising 19% to 628.5 million and revenue amounting to US$81.4 billion representing 18% jump over 2004.

Innovative prepaid offerings were a significant driver boosting mobile penetration in both emerging as well as mature markets. At the same time, the region's fastest growing market is India, where pent up demand for mobile services coupled with expansion in network coverage, led to a phenomenal 58% surge in subscribers. More good news awaits; as despite such performance, mobile penetration in India still lagged far behind the region's and stood at a low 7%, signifying further growth potential for the coming years.

2005 also saw industry consolidation which yielded stronger and larger players, encouraging uptake in new 3G markets, and operator plans to shift technology focus. These developments lay the groundwork for further upside, as service providers prime themselves to cope with an increasingly competitive landscape which result from more deregulation and reforms, and the introduction of new competing technologies and services.

Mobile penetration is forecast to reach 37% by 2010, a big leap from 23% in 2005. The growing popularity of prepaid services across the region represents the leading factor driving mobile adoption, which continue to lower the entry barriers for nascent demand and to extend the addressable market to new segments. The diversity of the APEJ markets in terms of market maturity, competition, network technology, growth potential, per capita income and service adoption, draw wide differences across each of these markets.

While emerging markets continue to focus on closing the digital divide with rising teledensity, developed markets will emphasize more on growing non-voice revenue. Over the forecast period, increasing launch of mobile data content and applications will enhance service differentiation for service providers, and 3G services will be progressively launched across all 10 markets. Supported by the launch of 3G networks in China by the time of the Beijing Summer Olympics, IDC forecasts 3G subscribers to account for 13.5% of the APEJ market by 2010.

While the benefits of prepaid is being extolled, demand for contract services will be buoyed by subscriber migration to new technologies. With leading service providers pushing consumers to take up 3G services, handset bundling will play an important role in driving handset replacement and upgrades to enable the usage of high-speed mobile content and applications. As competitive pressures pile up, the high cost of churn is also a big concern for service providers and the focus on loyalty and retention programs will be an impetus buoying the contract subscriber base.

Over the forecast period, competition is expected to intensify in the 3G arena particularly in mature markets where net subscriber addition is limited. In the effort to offset falling voice ARPU from price commoditization, operators led by those in South Korea, will strive to boost data usage with shifts to more advanced platforms such as HSDPA/HSUPA, to enable premium applications. On the back of increasing usage of data-centric value-added services around the region, IDC forecasts non-voice revenue to account for 23% of total mobile service revenue in 2010, a significant rise from a 16% contribution in 2005 for the APEJ region.

Source: IDC, 2006

Asia/Pacific (Excluding Japan) Mobile Services 2006-2010 Forecast Update: 2005 Year-End Review Publ 20060614