India and China will continue to drive mobile subscriber addition

India will continue to add large numbers of subscribers in the coming years despite the tariff war, which has lead to erosion of money in telecom Industry. Ovum's latest mobile forecasts predict that global connections will reach 6.49 bn in 2014, with revenues of $1,036 bn. The growth would be driven by emerging markets, primarily India and China. Asia Pacific, driven by India and China, would account for 63% of global net additions between 2009 and 2014.
However, the proportional contribution to global revenues from emerging markets will be lower than for connections, as ARPU continues to decline due to increased competition and saturation. Such 'emerging maturity' will be a key feature of many previously high growth markets to 2014.

Conversely, developed market connections have borne the brunt of the recession. Therefore, Ovum has dampened our expectations in most developed markets. There is still growth, a CAGR of 2% from 2009 to 2014 in Western Europe. But operator strategies in mature markets must reflect the shift in emphasis to maintaining profit levels rather than the topline growth.

Pressure on developed market players is reinforced in revenue forecasts. Currency fluctuations make comparisons with earlier numbers difficult, but revenue estimates for 2009 ($873.96 bn) is 1.6% lower than before. By 2014 Ovum expects the 2014 figure to be $1,036 bn, 7% lower than previously forecast.

Ovum expects a CAGR of 3% over the forecast period, with over $1,000 bn in revenues in 2013. Much of this revenue growth comes from the extraordinary connections growth in emerging markets. North America and Western Europe's contribution to global revenues will fall from 44% in 2009 to 40% in 2014.

Mobile data services are set to grow in prominence, particularly in developed markets. In 2009, estimated mobile data revenues were $203.19 bn, growing at a CAGR of 11% to $340.31 bn in 2014. This will mean that, on an average, 33% of the operators' revenue will be derived from data in 2014, compared to 23% in 2009. 

Messaging will still contribute 45% of data revenues in 2014, despite the rapid price erosion currently being seen. Voice will also continue to be the 'killer apps', contributing 67% of operators' revenues globally in 2014, and no less than 60% in each region. However, voice margins will be difficult to maintain in the face of the intense price pressure.

LTE has rapidly become the defacto standard for the long term data transport optimization solution. Therefore, we expect to have 116.8 mn LTE connections worldwide by 2014. However, it is important to note that there is still life in HSPA, which by 2014 will constitute 75% of the high speed mobile data connections (those using WCDMA, HSPA, CDMA EVDO, LTE or mobile WiMax).

akhileshs@cybermedia.co.in