Thumbnail: 

Mobile industry subscriber growth will slow by a third this year as the industry faces longer handset replacement cycles and much tougher emerging market competition, a research firm has warned.

The world's mobile subs rose 18.5% in 2008, compared with 22.5% in 2007, and will slow to increase just 12.7% in 2009, says Informa Telecom and Media.

It said handset replacement market will fall 7%, with the western European markets expect to contract by 13%.

"The handset market is facing a difficult period, with the average replacement cycle likely to increase by six to eight months in 2009, which would result in a 5% year-on-year decline in the number of total devices sold globally to 1.16 billion," said Nidhir Maudgalya senior forecasting analyst.

"And things could get worse, as depending on the extent of the deterioration of global macroeconomic conditions, the year-on-year fall in the number of total devices sold could rise to 10% with replacement cycles increasing to up to 12 months."
 
Informa said new subscriptions in the emerging markets of Africa and south Asia continue to drive growth, but warned that investors looking to escape saturated developed markets would find conditions tough.

"India and other emerging markets have their own difficulties as mobile operators continue to work out how they can deliver profitability in the face of increasingly brutal competition," said Nick Jotischky, principal analyst for emerging markets.