APAC operators need more efficient networks

The economic recession will take a toil on Asia-Pacific mobile revenues over the next five years, leaving operators little choice but to step up network efficiency, according to a new report from Ovum.

The region's revenue growth for 2009 currently stands at 8 percent, down from Ovum's previous estimate of 10 percent, the research firm said Thursday in a statement. Global operator service revenues will reach US$1 trillion only in 2011, instead of the original forecast of 2010, it said.

Ovum analyst Nathan Burley said in a statement: "The recessionary impact on mobile in Asia will be relatively muted, and led by China and India, mobile service revenues will continue to grow."

Asia-Pacific mobile operator service revenues will reach US$290 billion in 2011, Burley noted, clocking US$326 billion by 2014.

Mobile connections in the region are also expected to grow 80 percent by 2014, over 2008, said Ovum. However, revenue growth for the same period is pegged at a lower 40 percent.

Similarly, while Ovum predicts Asia-Pacific mobile outgoing usage by minutes, will rise 155 percent between 2008 and 2014, voice revenues will grow at only 26 percent.

"Both comparisons highlight the influx of ever-lower ARPU (average price per user) customers from emerging markets, and price erosion in mature markets--even for data services," said Ovum's senior analyst Steven Hartley. This, he added, called for efficient networks that enable operators to set competitive pricing, in both highly saturated mature markets and emerging markets with low ARPU.

According to Ovum, Asia-Pacific mobile subscriptions will grow at a compound annual growth rate (CAGR) of 10 percent between 2008 and 2014.

Five years from now, mobile penetration in the region will reach 78 percent. However, the penetration rate of countries such as China and India will be lower at 76 percent and 69 percent, respectively.

Mobile penetration will exceed 100 percent in developed markets and some emerging markets, but "further growth will still be possible from multiple SIM ownership and through uptake of data-centric devices", Ovum added.

Worldwide, there will be 6.42 billion connections by end 2014, an increase of 59 percent over 2008. China and India will account for 30 percent of these subscriptions.

Voice still killer app
Voice, noted Ovum, will continue to generate the most revenue globally--accounting for 69 percent of worldwide revenues, and 66 percent in the Asia-Pacific region.

Given the expected growth, operators cannot afford to ignore the role of voice as a revenue generator, even as they compete for data revenues, said the research house.