Mobile services to account for over 76pc of total services revenue in China by 2014

DUBLIN, IRELAND: Research and Markets announced the addition of the "Communications Markets in China - 2009 Edition" report to its offering.

Fueled by mobile penetration into the rural market and by uptake of 3G services, China's telecommunications market will generate $187 billion by 2014, according to this latest report.

Communications Markets in China offers a precise profile of the country's converged telecommunications, media, and technology sectors based on proprietary data from our research in the Chinese market. It provides detailed competitive analysis of both the fixed and mobile sectors, tracks the market shares of technologies and services, and monitors the introduction and spread of new technologies such as WiMax, IPTV, and VoIP.

Published annually, this executive study provides a comprehensive view of the Chinese communications market by analyzing key trends, evaluating near-term opportunities and assessing upcoming risk factors.

China's telecommunications market generated US$110 billion in 2008, making it the second largest telecommunications services market in Asia/Pacific after Japan, notes Daniel Yu, analyst at Pyramid Research and author of the report.

"Given continued demand for connectivity and rising adoption of mobile and fixed broadband services, the Chinese market will increase at a compound annual growth rate of 8.8 percent between 2009 and 2014, reaching $187 billion by 2014, surpassing Japan as the largest telecommunications services market in Asia," Yu says.

"China, like many emerging markets, is becoming an increasingly mobile market, adding 71.2 million mobile subscriptions in 2008, roughly 12 percent of all additions worldwide and second only to India's 113.3 million net additions," says Yu.

Mobile service revenue growth will be supported by a penetration increase from 58 percent at year-end 2009 to 80 percent at year-end 2014. The author expects mobile services to account for more than 76 percent of total services revenue in China by 2014.

Despite the declining rate of growth in the economy, the author expects the mobile industry to experience healthy growth in 2009 as mobile operators roll out 3G networks and extend coverage to rural areas.

"China Mobile, for example, is dedicating 30 percent of its total Capex on 2G network expansion, and 70 percent of the allocated portion will be used in the rural market," Yu says.

Key findings of the report include:
* Chinese regulators restructured the industry in 2008, creating three full-service operators by consolidating fixed and mobile assets of China's five leading players.
* Although Pyramid Research does expect the reshuffle to help China Unicom and China Telecom to compete better against China Mobile, the giant's position will remain unshaken.
* 3G represents one of the most interesting opportunities in China in the near term. * In the next two years, Chinese operators will spend an estimated $41bn to develop the 3G market, presenting a golden opportunity for equipment and handset vendors.

Global mobile services revenue to grow at least 1.2pc annually through 2014

NEW YORK, USA: Unemployment has risen dramatically from just one year ago. The result is a recalibration of consumer purchasing and usage behaviors, which will affect all industries, including the normally recession-proof mobile services industry.

Yet despite current market uncertainties, a new ABI Research study shows that even under the worst recovery scenarios, mobile services revenues will continue to grow at nearly 1.2 percent through 2014, a 0.5 percent loss over pre-crisis conditions.

Dan Shey, Practice director, ABI Research, said: “A long economic recovery places pressures on mobile operators to compete on price, particularly with undifferentiated voice services. Mobile data services allow operators to counter that pressure. However each region is different. Operators should create strategies that lead customers to maintain ‘nice-to-have’ data services or encourage addition of more utilitarian ones.”

Economically, North America has been hit hardest. But mobile data services growth will exceed 8 percent through 2014 even in the worst recovery scenario and will shield mobile services revenues against growing voice pricing pressures.

While stimulus packages are helping power the Asia Pacific region through the financial crisis and limiting unemployment loss, regional operators derive a large portion of their data revenues from content downloads. These products would be the first casualties of an extended recession, particularly with APAC’s substantial prepay base. But operators can mitigate the impacts of the depressed conditions through appropriate messaging and offer management.

Shey added: “Mobile operators need to stress the utility of mobile services and pursue appropriate services personalization initiatives that allow customers to buy and use services in ways that best suit their needs. Business customers should also be a target segment as businesses consider mobile a way to lower costs and increase competitiveness.”

Combining survey data with regional economic and mobile demographic factors, ABI Research’s ”World Financial Crisis and the Mobile Services Market” provides a quantitative view of potential changes in the mobile services market based on three possible economic recovery scenarios. Forecast analysis is provided for changes in postpaid and prepaid subscriber adoption, voice usage and pricing, SMS usage and pricing, and mobile data revenues. Analysis is provided across seven different world regions.