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Prepaid fuels emerging Asia mobile growth

Mobile subscriber growth in Pakistan and Vietnam continues to be driven by prepaid plans, a trend set to continue, finds IDC report.
Written by Victoria Ho, Contributor

Prepaid mobile subscription plans are fueling the growth of the mobile services segment in emerging Asian markets, according to the latest report from IDC.

The total revenue for mobile services in Bangladesh, Pakistan, Sri Lanka and Vietnam reached US$3.1 billion in 2006, a 118.5 percent increase from the previous year.

IDC pegged the bulk of this revenue to the "robust appetite" for mobile services, particularly in Pakistan and Bangladesh, most of which can be attributed to the prepaid segment of the market. Some 95 percent of subscribers are on prepaid plans.

The prepaid segment is growing faster than that of contract subscriptions, said IDC. The segment registered a 124.8 percent growth last year, while contract plans grew at a more modest 42.6 percent.

In a statement Tuesday, Kam Kasturie, a senior analyst for IDC Malaysia's telecommunications research division, said: "Mass-market users prefer the prepaid service as a means of controlling their budget and not exceeding their expenditure on mobile services.

"Given the relatively lower spending capabilities in the emerging countries, prepaid and pay-per-use models, which require a smaller immediate payment from subscribers, is proving successful."

Bangladesh registered mobile penetration growth of 103.5 percent, from 7.2 percent in 2005 to 14.4 percent last year.

The number of mobile subscribers in Pakistan grew 145.9 percent last year, which IDC attributes to the country's telecoms deregulation policy in 2004.

In Vietnam, SMS (short message service) will continue to drive revenue in the country due to its popularity as a cheap form of communication. Revenues from non-voice services, including SMS, accounted for 55.7 percent of total service revenue in 2006.

The total mobile service revenue for the four countries is projected to grow at a compound annual rate of 25.9 percent between 2007 and 2012. The number of subscribers is expected to register a compound annual growth rate of 28 percent over the next five years, and prepaid subscription will still be preferred, noted the report.

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