Further growth will come from prepaid segment: F&S

Frost & Sullivan, the USA-based research company, said in an analysis that South Asian countries such as India, Sri Lanka, Bangladesh and Pakistan are characterized by a low mobile penetration rate despite having several operators. India has the highest subscription growth rate, followed by Sri Lanka, Bangladesh and Pakistan. The study carried out by Frost & Sullivan says that the low penetration levels in these countries indicate that there is a huge untapped market, which will translate into high subscriber growth rate between 2009 and 2015. The rise in the subscriber base will come mostly from prepaid services resulting in a rise of prepaid subscriber percentages in these countries.
Frost & Sullivan’s report, Market Engineering Research for Mobile and Wireless Market 2008, compares the scenario in South Asian countries with that in the Middle East and North Africa (MENA) region, and says that most of the countries in the MENA region have crossed 100 per cent penetration level even under controlled competition or duopoly environment (with only two operators).
The report added that all these markets are in the growth phase leading to a fall in average revenue per user (ARPU). Therefore, telecom service providers are introducing attractive packages to push Mobile Data services for better ARPUs.
Lokeshwari Nautiyal, senior research analyst, Frost & Sullivan, said in an official statement, “Although customers are benefiting from the declining call rates and innovative tariff plans, low call rates are pressurising mobile operators due to the decline in revenue margins. This is likely to result in consolidation in some markets like India and Sri Lanka.”
Frost & Sullivan finds that total market revenue for these countries was over $55 billion in 2008 and estimates it to reach over $89 billion in 2015.
Santosh Kumar Sinha, industry analyst, said in the same statement, “High uptake of services such as MMS, mobile web browsing, call conferencing, call forwarding, call waiting, mobile banking, and access to other data services are enhancing the outlook for the mobile data services market. The rollout of 3G services in some countries is expected to further bolster market progression.”
The Frost & Sullivan analysis also highlights trends in mobile data usage. It says that Israel, with 15 per cent data revenue contribution, ranks first in terms of data usage among the covered list of countries in the MENA region. This is attributed to the difficulties of growth through new customer acquisition and high voice tariff competition. Therefore, operators are focusing on mobile data and extending their services to provide bundled services. Barring Israel, all other countries in this region prefer prepaid subscription. New mobile operators are introducing services at low prices, especially in the prepaid segment, driving the growth of prepaid subscribers in these markets.
Market Engineering Research for Mobile and Wireless Market 2008 is part of the Mobile & Wireless Growth Partnership Service program, which also includes research in the following fields: value added services, telecom passive infrastructure market, enterprise mobility market in India, and an assessment of the potential 3G market in India.