Mobile to weather world financial storm

Thanks to "spectacular' growth in China and India, the mobile industry will continue its upward trajectory in spite of global financial crisis, says analyst.
Written by Victoria Ho, Contributor

The mobile phone industry is expected to boom despite the current global financial crisis, thanks to new growth in emerging markets, according to Portio Research.

In a report Monday, the analyst company predicted the world's population of mobile phone users will increase from the current 50 percent to 80 percent in 2013. This translates to a "staggering 5.8 billion people", said Portio.

"The mobile industry continues to confound expectations with spectacular accelerating growth," stated the report, attributing the growth mainly to China and India's markets.

China topped Portio's list of top growth markets, followed by India. With the two countries expected to jointly contribute some 1 billion additional mobile subscribers between 2007 and 2013, Brazil is a "distant third" with 132 million additional subscribers expected, the research firm said.

Portio's report echoed similar findings from another recent report from the International Telecommunication Union (ITU).

The industry body predicted global mobile subscribers will reach 4 billion by the end of this year, fueled by the BRIC (Brazil, Russia, India, China) countries. But, the ITU noted that this figure does not factor in double counting where one user has multiple subscriptions, and pegged the overall global mobile penetration rate at 61 percent by end-2008.

Revenue margins will dip
However, the Portio report projected that the average revenue per user (ARPU) will continue to decline from US$23.2 in 2005 to US$15.8 by the end of 2013. The falling margins are due to additional subscribers from low per capita income markets.

The report also singled out Nokia as leader in terms of market share, having shipped 437 million handsets last year. The Finnish handset maker's success has been linked to its performance in developing markets, in relation to competitors' sales figures in these regions, according to Portio.

Nokia appears to be continuing its focus on the lucrative emerging markets. It recently launched a global Symbian app competition calling for developers to "think about the needs of [emerging] markets", with hopes of making handsets that are more attractive to users in these markets.

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