Emerging markets to drive telco revenues

Pablo Iacopino/Analysys Mason
15 Apr 2013

Some bright spots for growth in telecoms revenue are emerging from the gloom of the global economic crisis, but there is no question that service providers will struggle to drive growth in traditional revenue streams in the next few years. Looking to new strategies and new business models is critical to survival and growth.

Telecoms is still a growth industry in most regions of the world, particularly for the mobile sector, and assessing market perspectives and quantifying growth opportunities will be critical to carving out a piece of the revenue growth over the next five years.

China, India and Brazil present greatest opportunities

According to Analysys Mason's forecast report, Global telecoms market: trends and forecasts 2013–2017, the global market for telecoms services generated retail revenue of $1.54 trillion (€1.1 trillion) in 2012, of which around two-thirds was from developed markets – North America (NA), Western Europe (WE), Central and Eastern Europe (CEE) and Developed Asia–Pacific (DVAP) – and around one-third from emerging markets – Emerging Asia–Pacific (EMAP), Latin America (LATAM), Middle East and North Africa (MENA), and Sub-Saharan Africa (SSA).

The USA was the largest market ($378 billion), followed by China ($151 billion), Japan ($133 billion), Brazil ($61 billion) and Germany ($53 billion).

We forecast that telecoms retail revenue worldwide will grow at a 1.7% CAGR during 2012 to 2017, with growth in mobile (3.2%) more than offsetting a decline in fixed (–0.6%).

Mobile handset data and fixed and mobile broadband will be the most important revenue growth areas, driven by higher data usage and increased penetration of smartphones and broadband services. However, we forecast that mobile voice revenue will grow in emerging markets because many countries still have unserved customers.

Revenue in emerging markets will grow at a CAGR of 5.3% during 2012 to 2017, which will more than offset the decline in WE (–1.3%), while revenue will be nearly stable in CEE (–0.2%), DVAP (–0.3%) and NA (+0.2%).

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