Despite a global recession and approaching saturation in some markets, new research from TeleGeography’s GlobalComms Insight predicts that both wireless and broadband subscribers will grow at over 10% per year over the next five years. This results in no fewer than 2.5 billion net new subscribers by the end of 2013. However, growth in the value of the telecoms services market will not keep pace with subscriber growth. The bulk of subscriber growth will come from countries where GDP per capita is under USD3,000 per year. Despite the best efforts of service providers to maintain or increase ARPU, global telecoms service revenues will grow less than 5% annually—less than half the rate experienced over the past five years.
Which service providers are best positioned to grow in this changing telecoms services market? TeleGeography’s GlobalComms Insight has studied eight of the world’s leading service providers and produced a range of metrics that describe them and their current business structure. One clear conclusion is that service providers with a more geographically diversified business have enjoyed much stronger business growth over the last three years and are more profitable. The growth prospects of service providers with strong competitive positions in a range of different countries far outstrip those with a single-country focus.
China Mobile is the one company that has managed to buck the general trend, thanks to the blistering mobile subscriber growth in its home market. However, even the world’s largest wireless service provider by subscribers is feeling the pressure, as evidenced by last week’s news that it will expand its global footprint by buying a stake in Far EastTone of Taiwan.
Telefonica is the prime example of a former incumbent telco that has transformed itself by implementing a clear strategy to target growth beyond its national boundaries. Other traditional telcos that do not do likewise face the prospect of slipping down the ranks of the world’s leading service providers.
TeleGeography’s GlobalComms Insight provides comprehensive market forecasts and forward-looking analysis to help clients track market trends and to identify new opportunities.
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