05 September 2008

Over 500 Million New Mobile Subscribers From Asia Forecast

Over 500 million new mobile subscribers are expected from Asia’s emerging economies by 2012, according to a report.

Asia's emerging markets, comprising eight nations, are expected to see mobile subscriber net gains of 573 million by end-2012, breaching the one billion mark to close the year at an estimated 1.06 billion subscribers, according to a forecast by market research company Frost & Sullivan..

Emerging markets are defined as countries with low tele-density and Internet penetration, and a sizeable population that are largely underserved or completely without telecommunication services. Countries included in market research company Frost & Sullivan’s report number Bangladesh, Cambodia, India, Indonesia, Laos, Pakistan, Sri Lanka and Vietnam; all with mobile penetration rates of under 50 percent.

According to Frost & Sullivan industry analyst Jeff Teh, over half of the world's mobile networks are believed to exist in emerging markets. "Most mature markets in Europe, the Americas and even Asia are fast reaching saturation, adding fewer connections and offering fewer growth opportunities,” explained Teh.

"As mobile operators in Asia scramble to add another staggering one billion subscribers onto their networks, Asia's emerging nations offer the most palpable growth prospects, particularly in the rural sectors," added Teh.

The inherent characteristics across these emerging markets are that they are generally lower-income. The challenge for mobile operators and foreign investors as such is to introduce new business models and flat-rate pricing plans to appeal to these price-sensitive consumers. "Much of the uptake for mobile services will be limited to basic services such as voice calls and text messaging in the near term," Teh explained.

There will undoubtedly be some big challenges ahead, Teh warned. Aside from having to manage regulatory issues and service affordability, operators will face a further uphill climb re extending network connectivity well into the rural districts and at the same time managing operational and capital expenditure in a cost-effective way to maintain good profit margins.

To drive the adoption of mobile services among rural communities, some countries have rolled-out initiatives such as village phones, transmission tower-sharing among operators, as well as linking communities with mobile services to facilitate access and payments.

Teh believes that such innovation is necessary to achieve the connectivity vision, as wireless technologies will enable Internet access in these areas "one of the most compelling features of wireless networks in emerging markets is the ability to provide a faster and cheaper alternative to desktop computers for accessing the world wide web, especially considering the lack of fixed-line infrastructure and power sources,” he concluded.