Despite the lingering economic woes, the global telecom industry
has maintained an upbeat momentum this year thanks to service
providers who are consistently delivering healthy growth. This
trend is expected to continue going forward. A substantial portion
of this industry is dominated by Asia-Pacific, trailing U.S. and
According to the latest report from Analysys Mason, telecom service
revenue in Asia-Pacific region would climb to $323.7 billion in
2016 from $229.7 billion in 2011. This growth entirely depends on
the wireless and mobile broadband services, the two powerful growth
drivers of the industry. Rolling out of 3G and 4G services, growing
demand for Internet access and improving broadband coverage and
connectivity would continue to boost revenue in the region.
As customers are rapidly moving from fixed-line to wireless, it is
expected that mobile voice connections will reach 90% by 2016, up
from 84% in 2011 and 73% in 2008. As a result, the number of total
voice connections in the Asia-Pacific region would increase by 45%
to 3.9 billion. Majority of the growth will come from the leading
telecom operator in China, such as
China Telecom Corp.
), and in India, such as
) India and
Tata Communications Limited
The overall active mobile penetration rates would reach to 95% by
2016, up 32% from 2011 levels. The number of active SIMs will
increase to 3.7 billion in the same period from 2.33 billion in
2011. However, the monthly average revenue per user (ARPU) would
continue to decline over the next five years albeit at a slower
pace to $6.50, compared to $7.40 in 2011 and $10.00 in 2008.
Together, China and India accounts for nearly 68% of the
Asia-Pacific region's population and 75% of the total telecom
revenue. Notably, China will lead other countries by generating the
greatest chunk of the revenue growth. About 60% of the revenue
($138 billion) in the region is tilted toward China. Other markets
like Bangladesh, Indonesia, Malaysia, Pakistan and Thailand will
contribute the rest 25% of the total revenue.
Coming to 4G LTE, which is considered the standard technology for
the operators across the world, it will have a minimal impact on
the growing Asia-Pacific economies owing to capacity constraints,
lack of affordable devices and the timing of LTE spectrum auctions.
The LTE penetration would be slightly higher in Malaysia and China
at 8% and 7% respectively. India, Indonesia, and Thailand would see
lower LTE growth of 3% by 2016, while Bangladesh and Pakistan will
experience even lower growth.
China Telecom, China Unicom and China Mobile currently hold Zacks
#1 (Strong Buy), #3 (Hold) and # 4 (Sell) Ranks, respectively.
Vodafone retains Zacks #3 (Hold) Rank.
CHINA TELCM-ADR (CHA): Free Stock Analysis
CHINA MOBLE-ADR (CHL): Free Stock Analysis
CHINA UNICOM (CHU): Free Stock Analysis Report
TATA COMMUNICAT (TCL): Free Stock Analysis
VODAFONE GP PLC (VOD): Free Stock Analysis
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