Emerging markets are far from saturation, giving carriers ample room for growth
Los Angeles, CA (PRWEB) September 18, 2013
Over the past five years, wireless communications have become essential to the day-to-day lives of the majority of the world's consumers. As a result, demand for the industry has surged with revenue following suit. Over the five years to 2013, revenue is expected to grow at an annualized rate of 4.6% to a staggering $1.5 trillion. In general, firms in the Global Wireless Telecommunications Carriers industry have adopted two primary strategies to grow revenue: growing subscriber numbers and increasing average revenue per user (ARPU). These strategies are largely dependent on the domestic economies in which firms operate.
According to IBISWorld Industry Analyst Caitlin Newsom, “The overwhelming majority of new wireless subscriptions over the past five years have emanated from emerging markets in Asia, particularly those of India and China.” There are now over one billion mobile subscribers in China, while India is anticipated to surpass the one billion mark in 2013. This rapid increase in subscribers from these markets is expected to help boost global industry revenue 4.8% in 2013.
“In contrast, markets in the developed world have reached saturation," says Newsom. As such, wireless carriers are unable to achieve the subscriber growth rates of their counterparts in emerging economies. Instead, carriers have focused more heavily on expanding ARPU by providing more expensive mobile data services; demand for these services has exploded over the past five years with the widespread proliferation of smartphones and tablets. Notably, however, carriers that operate primarily in Europe have experienced a slowdown in revenue growth due to the ongoing economic downturn in that region.
Still, the industry as a whole is not expected to slow down much over the next five years; revenue is forecast to grow. This growth will likely be driven by the ongoing rollout of fourth generation (4G) networks, which provide the fastest data-transfer speeds available. Meanwhile, spectrum shortages in developed economies will continue to encourage consolidation, all while emerging markets near saturation over the next five years, meaning carriers will steer their efforts toward expanding ARPU. While the purchasing power of consumers in these emerging regions will not likely grow to rival that of consumers in developed regions, even a small increase in ARPU in these enormous markets would have a significant effect on the industry.
In contrast to domestic markets, which typically exhibit a high level of concentration, the Global Wireless Telecommunications Carriers industry has a low level of concentration. This can be attributed to large players dominating a country or a geographic region, but not having a major global presence. Over the next five years, companies with extensive operations in the emerging markets of South America, India and China are expected to significantly increase their market shares.
For more information, visit IBISWorld’s Global Wireless Telecommunications Carriers industry report page.
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IBISWorld industry Report Key Topics
Firms in this industry operate and maintain switching and transmission facilities to provide direct communications via wireless radio transmission. Wireless services include cellular voice telephony services, messaging services, broadband data services and mobile backhaul services (i.e. transferring data from small subnetworks to a network core). Carriers may also retail mobile handsets and related equipment to consumers. The industry does not include mobile virtual network operators.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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