North Asia leads in mobile users, revenues, innovation; 1bn subscribers in 2009!

SINGAPORE: North Asia is light years ahead of the other Asian sub-regions in terms of mobile service innovation and revenues, thanks to countries like Japan, which is expected to launch LTE in 2010 -- likely to be the first in the world -- and along with South Korea, are two nations with the highest ARPU levels in Asia-Pacific (Japan at $53.20 per month in 2008 and South Korea at $38.04).

Despite such heavyweights and market saturation in Japan, Hong Kong and South Korea, juggernaut China ensures that mobile subscriber growth will most certainly continue.

The North Asian region is expected to be home to just over one billion mobile users by the end of 2009, representing a year-on-year subscriber growth of 15.3 percent; China alone will house 80 percent of that billion.

New analysis from Frost & Sullivan, 2009 North Asia Wireless Outlook, finds that the mobile subscriber base in the region -- covering five North Asian nations including Japan -- grew 10.1 percent year-on-year to reach 878.1 million users in 2008, accounting for nearly half of the total mobile subscribers in Asia-Pacific (18 countries) last year.

Forecasted to grow at a CAGR of 7.7 percent (2008-2014), North Asia's mobile subscribers are expected to surpass 1.37 billion users by end-2014.

Mobile services in North Asia are expected to gross an estimated $183 billion in revenues this year, and are forecasted to reach billings of $229.8 billion by end-2014, at a CAGR of 5.2 percent (2008-2014).

"The bulk of this growth, both in terms of subscribers and revenues, will naturally be driven by China," says Frost & Sullivan senior industry analyst Jeff Teh. "With a mobile penetration rate of just 51.6 percent in 2008, China remains the largest and one of the fastest-growing mobile services market in the world."

Hong Kong's mobile penetration rate stood at 133.2 percent in 2008, Japan at 86.5 percent, South Korea at 94 percent, and Taiwan at 110.9 percent.

In Hong Kong, Japan, South Korea and Taiwan, Teh believes that growth, however marginal, will be driven less by subscriber addition and more by data usage prompted mainly by mobile broadband and 3G service uptake.

Even so, just barely, "We expect intense price competition in these markets with the vast majority of mobile data subscribers using flat-rate plans," he explains. "The primary challenge for operators here would be to differentiate their services to maintain average subscriber revenue and manage churn," Teh adds.

Given the high degree of competition, Teh expects operator revenues in these markets (ex-China) to grow at a low CAGR of under one percent from now till 2014.

Mobile operators in China however are expected to bill close to $85.7 billion by the end of 2009, and close the year 2014 at revenues of $132.6 billion -- for a CAGR of 13 percent (2008-2014) -- and 1.15 billion subscribers.

In 2008, China had 687.2 million subscribers, accounting for 78.2 percent of North Asia's mobile users; Japan -- 110.4 million (12.6 percent); South Korea -- 45.6 million (5.2 percent); Taiwan -- 25.6 million (2.9 percent); and Hong Kong -- 9.3 million (1.1 percent).