Developing markets to drive huge mobile growth


Worldwide unique mobile subscriber penetration is only 45% today, yet will hit four billion within five years driven by unconnected markets, GSMA says

Developing markets are set to drive global unique mobile subscriber penetration to over four billion by 2017, according to an in-depth new study from the GSMA.

The study found that future mobile subscriber growth will be driven by demand among currently unconnected populations in developing countries, particularly those in rural areas, which the research estimates to be 1.8 billion people throughout the next five years.

By 2017, subscriber penetration in developed countries is set to have passed 80% and growth in these markets is expected to slow. In contrast, subscriber penetration across developing economies is forecast to increase from 39% in 2012 to 47% in 2017, and will be the largest factor spurring the global growth of mobile over the next five years.

By the fourth quarter of 2012, total mobile connections will stand at 6.8 billion including machine to machine (M2M) communications, or 5.9 billion excluding M2M and inactive SIM cards. With consumers using an average of 1.85 SIM cards each, the total number of mobile subscribers globally will stand at 3.2 billion by the fourth quarter this year, growing to four billion within the next five years.

Additionally, the study found that global penetration based on total connections is set to exceed 100% in 2013, from mobile subscriber penetration standing at only 45% by the end of 2012.

'This research, for the first time, highlights the difference between mobile connections and individual mobile subscribers, and points to a significant growth opportunity for the mobile industry as we continue to connect the world's population,' said Anne Bouverot, director general at the GSMA. 'By identifying inactive SIMs and multiple SIM ownership, we have developed the most accurate measurement of the global mobile subscriber base, which shows that only 45% of the world's population has subscribed to mobile services.'

Europe has the highest mobile penetration in the world said the GSMA, with countries such as Denmark, Finland, Germany and the UK already averaging close to 90% subscriber penetration. Africa currently has the lowest penetration, with only one out of three people in the region subscribing to mobile services in 2012, a figure that is expected to increase to 40% in 2017.

In Asia, subscriber penetration stands 40% now, and is expected to grow to 49% by 2017. In China, the world's largest mobile market, subscriber penetration will grow from 43% at the end of this year, to 52% over the next five years.

'In developing markets, where there is clearly an opportunity for growth for the mobile industry, SIM per user patterns are influenced by cost conscious, low usage consumers who tend to accumulate prepaid SIM cards depending on the latest and most affordable prepaid tariffs,' continued Bouverot. 'In developed markets, SIM per user patterns are influenced by the ownership of smartphones, tablets and other devices connected to mobile broadband networks and through the wider availability of shared data plans.'

According to the research, approximately a third of the world's population of seven billion are unlikely to be able to subscribe to mobile services for a variety of reasons, resulting in an 'addressable' mobile subscriber base of around five billion.

The GSMA's mobile operator analyst team, Wireless Intelligence, predicts that the mobile industry will reach the five billion users milestone over the next decade as network expansion continues to progress in developing markets and as people in rural areas, many of whom currently live on less than $2 a day, subscribe to mobile services.

In India, according to figures from the World Bank and Telecom Regulatory Authority of India (TRAI), approximately half a billion people in the country's rural areas are unconnected to mobile networks, with rural mobile penetration of 39%. Rural penetration tends to grow slowly and, even when coverage has been deployed on a nationwide basis, it takes time for users to adopt mobile services. For example, in several African markets, such as Malawi, even though mobile coverage is close to 95% of the population, connections penetration still stands at only 29% in the second quarter of 2012.


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