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World Wide Subscribers

By end-2008, there were nearly 3.9 billion mobile subscribers worldwide and it is expected that in 2013 this number will reach close to 6 billion.

In the initial years, the growth of wireless services was primarily restricted to the developed markets of Europe and North America. As prices fell, the wireless market expanded its reach by attracting new subscribers in the developing regions of Latin America, Africa and Middle East, and Asia Pacific.

Key Latin American markets such as Argentina, Venezuela and Brazil have also picked up pace. Conversely, many advanced European markets have almost reached saturation and growth in these markets is gradually tapering off. At the end of 2008, worldwide mobile penetration stood at nearly 57 percent. Today, the Asia Pacific region is growing the fastest in terms of the number of mobile subscribers.

Mobile Factbook – June 2009

Worldwide Mobile Market

Subscriber Base

Overview

Ever since its inception, the surprising growth of the worldwide mobile market—both in terms of subscriber numbers and the scale at which new and interesting services are being introduced and taken up—has repeatedly surpassed expert estimates. By end-2008, there were nearly 3.9 billion mobile subscribers worldwide and it is expected that in 2013 this number will reach close to 6 billion.

Figure 1: Worldwide Subscriber Base (In Million, 2006 – 2013F)

5,800.15,492.7

5,148.14,766.5

4,344.83,892.6

3,334.3

2,725.2

0

1000

2000

3000

4000

5000

6000

2006 2007 2008 2009F 2010F 2011F 2012F 2013F

Sub

scri

ber

Ba

se

(In

Millio

n)

Year

Source: Portio Research Ltd.

F – Forecasted

The worldwide mobile market has grown rapidly in the last five years. Declining handset prices and voice tariffs, along with favourable policies adopted by telecom regulators worldwide, have acted as factors driving a significant increase in the subscriber base.

By end-2008, there were

nearly 3.9 billion mobile

subscribers worldwide and it is

expected that in 2013 this

number will reach close to 6

billion.

! In the initial years, the growth of wireless services was primarily restricted to the developed markets of Europe and North America.

! As prices fell, the wireless market expanded its reach by attracting new subscribers in the developing regions of Latin America, Africa and Middle East, and Asia Pacific.

! Today, the Asia Pacific region is growing the fastest in terms of the number of mobile subscribers. Key Latin American markets —such as Argentina, Venezuela and Brazil—have also picked up pace.

! Conversely, many advanced European markets have almost reached saturation and growth in these markets is gradually tapering off.

! At the end of 2008, worldwide mobile penetration stood at nearly 57 percent.

6 © 2009, Portio Research. All Rights Reserved

Worldwide Subscriber Base (In Million, 2006 – 2013F)

ASIA’s Contribution


Asia Pacific will continue to be the largest contributor to the worldwide mobile subscriber base till 2013. Currently, China and India are leading in terms of subscriber growth, and these two burgeoning markets have helped the Asia Pacific region to gain the title of ‘World Mobile Leader’. In 2008, subscribers of the Asia Pacific region formed nearly 44 percent of the worldwide subscriber base.

Currently, China and India are

leading in terms of subscriber

growth, and these two

burgeoning markets have

helped the Asia Pacific region

to gain the title of ‘World

Mobile Leader’.

Figure 3: Worldwide Subscriber Base – Regional Contribution (2008)1

12.2%

11.2%

25.0%

7.6%43.9%

Europe Asia Pacific North America Latin America Africa and Middle East


With operators mobilising to explore and capture potential markets in the developing nations, it is expected that Asia Pacific will house nearly 50 percent of the worldwide mobile subscriber base by end-2013.

Figure 4: Worldwide Subscriber Base – Regional Contribution (2013F)

13.7%

11.4%

18.7%

6.4%49.8%



F – Forecasted

1 NOTE: The figures may not add up to 100 percent because of rounding-off errors.




Currently, China and India are

leading in terms of subscriber

growth, and these two

burgeoning markets have

helped the Asia Pacific region

to gain the title of ‘World

Mobile Leader’.

Figure 3: Worldwide Subscriber Base – Regional Contribution (2008)1

12.2%

11.2%

25.0%

7.6%43.9%



With operators mobilising to explore and capture potential markets in the developing nations, it is expected that Asia Pacific will house nearly 50 percent of the worldwide mobile subscriber base by end-2013.

Figure 4: Worldwide Subscriber Base – Regional Contribution (2013F)

13.7%

11.4%

18.7%

6.4%49.8%



F – Forecasted

1 NOTE: The figures may not add up to 100 percent because of rounding-off errors.


Worldwide Subscriber Base – Regional Contribution (2008)

Worldwide Subscriber Base – Regional Contribution (2013F)

Regional Mobile Subscribers (In Million, 2006 – 2013F)


Table 1: Regional Mobile Subscribers (In Million, 2006 – 2013F)

Mobile Subscribers (In Million)

Region

2006

2007

2008

2009F

2010F

2011F

2012F

2013F

Europe

823.0

912.1

974.4

1,009.5

1,034.5

1,054.6

1,070.7

1,083.7

Asia Pacific

1,070.7

1,381.8

1,709.4

1,987.8

2,249.6

2,487.6

2,701.5

2,890.7

North America

251.9

276.5

296.9

315.6

332.6

347.9

361.6

373.8

Latin America

304.1

374.2

436.0

487.4

536.7

581.9

623.0

659.9

Africa and Middle East

275.5

389.5

475.8

544.5

613.0

676.0

735.8

792.0

Total 2,725.2

3,334.3

3,892.5

4,344.8

4,766.4

5,148

5,492.6

5,800.1


Figure 2 below is a graphical representation of Table 1 above.

Figure 2: Regional Subscriber Base (In Million, 2006 – 2013F)

0

500

1000

1500

2000

2500

3000

2006 2007 2008 2009F 2010F 2011F 2012F 2013F

Year

Mob

ile S

ub

scri

be

rs (

In M

illio

n)



F – Forecasted

© 2009, Portio Research. All Rights Reserved 7


With operators mobilizing to explore and capture potential markets in the developing nations, it is expected that Asia Pacific will house nearly 50 percent of the worldwide mobile subscriber base by end-2013.

Mobile Messaging


SMS and MMS

able 8: Regional SMS Traffic (In Billion, 2006 – 2013F)6 T

SMS Traffic (In Billion)

Region

2006

2007

2008

2009F

2010F

2011F

2012F

2013F

Europe 329.0 425.0 465.0 537.6 598.8 657.1 735.7 791.1

Asia Pacific 967.7 1,605.3 2,102.5 2,444.9 2,649.7 2,890.0 3,069.5 3200.1

North America 198.2 373.1 624.6 756.4 847.3 882.7 899.7 904.1

Latin America 116.9 152.4 191.0 250.2 286.4 317.9 337.3 350.1


50.6 70.1 104.2 132.2 160.6 185.9 209.7 226.3


Table 9: Regional MMS Traffic (In Billion, 2006 – 2013F)

MMS Traffic (In Billion)

Region

2006

2007

2008

2009F

2010F

2011F

2012F

2013F

Europe 8.8 12.6 15.7 20.6 26.2 31.5 35.7 40.1

Asia Pacific 13.0 28.9 41.8 53.0 64.5 75.2 83.3 90.3

North America 4.0 6.8 13.2 17.1 20.5 24.1 27.4 29.1

Latin America 1.6 1.8 2.3 3.1 4.2 5.5 6.4 6.8


0.7 1.4 1.9 2.7 3.4 4.4 4.9 5.4

6 F – Forecasted


Regional SMS Traffic (In Billion, 2006 – 2013F)

A few years ago it seemed as though everyone in the mobile industry was convinced SMS would be in decline by now, and still SMS doesn’t get much glory from network operators, yet SMS is the mainstay of non-voice revenues and will remain that way for many years to come. In full year 2008, SMS generated a staggering USD 89 billion in worldwide revenues, and that figure will grow to pass the USD 100 billion mark in 2010. While many believe that SMS prices may be in danger of commoditizing, they still have room to move and maintain profitability, as SMS is still so fast growing and highly profitable. We wholly believe that SMS is at the heart of the action in the mobile industry - SMS is a booming USD 100 billion market - and yet for most of the last few years MNOS have shown little interest in the service. As SMS use worldwide doubles over the next few years, operators need to work with vendors to deliver a broad array of innovative new SMS services. In the mature and highly developed markets of Europe and North America, SMS will likely evolve into SMS 2.0; SMS will probably find its way into enterprise applications; mobile e-mail may proliferate throughout the enterprise space and grow in the consumer space; mobile IM may grow vigorously and messaging revenue should continue to grow at a steady clip. All this looks likely in mature markets, but the real story is always going to be in Asia, where hundreds of millions of new users will come online every year and use just one non- voice service – SMS.

Asia totally dominates, this is inescapable. Over the next five years and beyond, Asia will account for half the world’s mobile subscribers, half the handset sales, almost half the messaging revenues, and well over half of all the messaging traffic. On a global scale, the future of mobile messaging is an Asian story – what happens in Asia will define the future of mobile messaging.

Significance of Data


Figure 11: Value-Investment Mapping of Data Services

SMS MMS Email/IM Games

Full-track music Mobile Interent UGC TV

Banking/payments Caller Tones


Bubble size correlates to importance of usability

Promising Challenging “Star” Performer High

Need for investment

Imp

ort

an

ce o

f P

erc

eiv

ed

Valu

e

High Low

While SMS is the unchallenged star performer (low on investment, high on perceived value and moderate in need for usability), services such as mobile banking/payments and mobile TV are challenging to develop because the need for investment in these services is usually quite high. Further recommended reading: Strategies for Driving Data ARPU Analyze best practice go-to-market strategies for non-voice mobile services including mobile email, IM, music downloads, mobile TV and much more. This long-awaited report is loaded with valuable information that will help you understand how to develop class-leading mobile data services. Purchase this report now and you also receive our previous report on this subject as a bonus, free! Ranking the World’s Best Mobile Operators: New ways to measure and understand MNO performance, beyond revenues, subscribers and ARPU This ground-breaking report delivers comparative analysis of the performance at 204 major MNOs worldwide using ten all-new measurements. Exposing the limitations of using traditional key performance indicators to compare MNOs operating in radically differing markets, this market study creates a previously unavailable level-playing field to fairly judge and compare MNO performance and to truly identify the world’s ‘best’ MNOs. INCLUDES a total of 33 MNO case studies outlining strategies used to succeed, and how to emulate them – covering MNOs in all world regions. Essential reading for ALL in the mobile space and beyond.


Value-Investment Mapping of Data Services

While SMS is the unchallenged star performer (low on investment, high on perceived value and moderate in need for usability), services such as mobile banking/payments and mobile TV are challenging to develop because the need for investment in these services is usually quite high.

Operators worldwide are offering some form of data service or other and are constantly trying to fortify their data services portfolio. That said, it may be dangerous to foray into offering new data services without considering their feasibility. Different data services demand different degrees of resources and involvement from the operator – as is depicted above.

With increasing pressure on voice services, operators are looking for ways to increase non-voice ARPU. Efforts have been made by MNOs in both developed and emerging markets to find products and services which can enable them to stem the decline in ARPU.

The operators in developed markets have leveraged high-speed networks to provide multimedia services; whereas in low-ARPU markets – understanding the constraints of the availability of high-end handsets – MNOs have focused on innovating with service offerings and are providing text-based data services and ring-back tones.

Mobile EntertainmentWorldwide Mobile Entertainment Revenue – Regional Contribution (2008)


The following figure shows the contribution of various regions to worldwide mobile entertainment revenue in 2008.

Figure 16: Worldwide Mobile Entertainment Revenue – Regional Contribution (2008)

16.9%

6.4%

34.2%

42.5%

Asia Pacific Europe North America Rest of the World

Source: Portio Research Ltd. In 2008, approximately 94

percent of the worldwide

mobile entertainment revenue

came from three regions:

Europe, North America and

Asia Pacific.

The expected regional break-out is unlikely to change significantly in 2013, with Asia Pacific and Europe continuing to be the leading revenue generators. However, the contribution of Asia Pacific and Europe to the total pie is expected to decline.

Figure 17: Worldwide Mobile Entertainment Revenue – Regional Contribution (2013F)

41.6%

10.1%

29.3%

19.0%



F – Forecasted

The use of mobile entertainment services has grown gradually in the advanced mobile markets of Europe, Asia Pacific and North America. Technological progress enabling high speed networks and the availability of advanced handsets has made it possible for operators to provide subscribers with superior entertainment services. However, in other markets like Latin America, Africa and the Middle East (namely the Rest of the World region) there remain issues which need to be addressed before these services can really take-off. The wireless markets in these regions are comparatively



The following figure shows the contribution of various regions to worldwide mobile entertainment revenue in 2008.

Figure 16: Worldwide Mobile Entertainment Revenue – Regional Contribution (2008)

16.9%

6.4%

34.2%

42.5%


Source: Portio Research Ltd. In 2008, approximately 94

percent of the worldwide

mobile entertainment revenue

came from three regions:

Europe, North America and

Asia Pacific.

The expected regional break-out is unlikely to change significantly in 2013, with Asia Pacific and Europe continuing to be the leading revenue generators. However, the contribution of Asia Pacific and Europe to the total pie is expected to decline.

Figure 17: Worldwide Mobile Entertainment Revenue – Regional Contribution (2013F)

41.6%

10.1%

29.3%

19.0%



F – Forecasted

The use of mobile entertainment services has grown gradually in the advanced mobile markets of Europe, Asia Pacific and North America. Technological progress enabling high speed networks and the availability of advanced handsets has made it possible for operators to provide subscribers with superior entertainment services. However, in other markets like Latin America, Africa and the Middle East (namely the Rest of the World region) there remain issues which need to be addressed before these services can really take-off. The wireless markets in these regions are comparatively


Worldwide Mobile Entertainment Revenue – Regional Contribution (2013F)

In 2008, mobile entertainment services (including mobile music, mobile games and mobile video and TV services) generated revenues of nearly USD 24 billion worldwide.

Around 94 percent of the 2008 worldwide mobile entertainment revenue came from three regions: Europe, North America and Asia Pacific.

Asia Pacific dominates mobile entertainment revenues, aided by the huge subscriber base in countries such as China and India, and the highly advanced mobile markets of Japan and South Korea.

In the field of mobile entertainment, mobile music emerges as the star performer; nearly half of the mobile entertainment sector’s revenue in 2008 was generated from mobile music services.


underdeveloped and the level of technical knowledge of subscribers here is well below the worldwide average.

Figure 18: Mobile Entertainment Revenue – Worldwide (In USD Billion, 2008 & 2013F)

23.9

47.2

0

5

10

15

20

25

30

35

40

45

50

2008 2013FYear

Mo

bile

En

tert

ain

me

nt

Re

ve

nu

es

(In

US

D B

illio

n)


F – Forecasted

CAGR = 14.6 percent

able 10: Mobile Entertainment Revenue – Regional (In USD Billion, 2006 – 2013F) T

Mobile Entertainment Revenue (In USD Billion)9

!

Region

2006

2007

2008

2009F

2010F

2011F

2012F

2013F

Europe 4.2 6.1 8.2 10.2 11.2 12.1 13.0 13.8

Asia Pacific 5.1 7.5 10.2 12.3 14.4 16.3 18.0 19.6

North America

2.0 3.1 4.0 5.0 6.0 7.0 8.0 8.9

Rest of the World

0.6 1.0 1.5 2.0 2.4 3.1 3.9 4.8

Total 11.8 17.7 23.9 29.5 34.0 38.5 42.9 47.2


9 NOTE: The mobile entertainment services revenue includes the total revenue generated by Mobile Music, Mobile

Games and Mobile Video & TV services.


Mobile Entertainment Revenue – Regional (In USD Billion, 2006 – 2013F)

Digital Music in ASIA

By the numbers.......

Digital music (i.e. online and mobile) will outsell physical music in Asia. This year India and South Korea have already crossed over.

Globally, online and mobile music sales will represent more than 60% of all music retail sales by 2009.

Almost 50% of all music purchases in Asia in 2006 were digital, of which 85% were sales of mobile music e.g. Caller Ringback Tones, OTA tracks, ringtones

Asian music sales will continue to be dominated by mobile music which will comprise 75% of all music purchased by 2009.

Asia Pacific will generate more than 40% of all mobile music sales globally in 2009.

While mature markets like Australia and the United States will see growing online music revenues at 1:1 online:mobile or greater, emerging markets will be virtually 100% mobile oriented.

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Mbr Asia Mobile Market