Telecom Market

The global telecom market, according to the International Telecommunications Union (ITU), was worth USD1.4 trillion in 2003, up seven percent on 2002 figures. Telecoms services constituted 78 percent of revenue while telecoms equipment accounted for the balance of 22 percent. 2004 saw a steady 7.1 percent increase in the worth of the communications industry to an estimated USD1.5 trillion.

Technological innovation is the key to success in the telecom industry. The convergence of voice and data over fixed-line as well as wireless is changing the industry’s dynamics. The high rate of technological innovation in cellular and broadband is leading to the eclipse of fixed-line services.

GSM continues to be the kingpin of mobile technologies, giving it a 76 percent share of the subscriber base, followed by CDMA with 12 percent, TDMA with 7 percent and PDC with 4 percent.  In March 2004, 544 GSM networks in 183 countries were operational.

Asia-Pacific is steadily closing the gap on Europe, the largest GSM market, while India, Russia and Latin America all reported growth in excess of 100 percent in 2003. The Asia-Pacific market grew at a compounded annual growth rate (CAGR) of 60 percent in the period 1998–2003, while the European market grew at a slower rate of 36 percent across the same period.

Convergence is driving opportunities in the telecom market today. The Internet, over fixed-line and wireless, is gradually becoming the primary, low-cost way of moving not just data, but also voice and other services. This convergence is blurring the line between telecoms operators and systems integrators as, increasingly, they pursue opportunities outside their domain.

The telecom market is growing at varying rates across the globe.  Its growth rate is high in emerging markets such as India and China while developed countries seem to have reached saturation point as far as mobile markets are concerned. The penetration level in developed regions exceeds 50 percent. In the UK and Japan, mobile communication subscribers outnumber fixed telephone subscribers. Figure 6 shows the major penetration levels by country in both fixed line and mobile markets. By the end of 2004 penetration in the UK had reached a staggering 95 percent with 56 million subscribers.

At the same time a remarkable phenomenon is unfolding in countries with low per capita income such as Cambodia, Rwanda, Sri Lanka, Bangladesh and most parts of Africa. The mobile subscriber base in these countries is high when compared to the fixed subscriber base. This is due to the poor service level and long waiting periods of fixed-line connections. Most developing and underdeveloped countries have deregulated their telecoms sector leading to the entry of private operators.

Most developing countries have vibrant mobile markets where inferior service levels and long waiting periods for fixed-line connections sway consumers towards mobile services that use networks that can be installed more rapidly than fixed-line networks. In addition, the ready availability of prepaid cards is adding to growth. The decreasing cost of adding a wireless line and the falling price of mobile services are also major factors behind the growth of the mobile communications systems in developing nations.

Read the full Article with a single purchase – CLICK HERE