Smart operator business models that make mobile services affordable in low-income markets are contributing to explosive growth in mobile usage.
India, in particular, is expected to be the fastest-growing market in coming years, says Leslie Arathoon, vice president of research at Pyramid Research.
"Today, India has some of the lowest mobile rates in the world," Arathoon says. "And yet, some of the operators covering the markets there have some of the highest EBIDTA (earnings before interest, depreciation, taxes and amortization - a measure of operating cash flow) margins in the world.
"They are working with very inventive business models that let them offer services to people who make as little as USD 2 a day," she says.
At the same time, mobile users in mature markets keep adding on subscriptions at a surprising rate.
"We had thought it would plateau at around 110 or 120 percent," Arathoon says. "Now we're seeing it move upwards to 130 percent in some places as people double or triple the number of SIM cards they use. They may use one for business, one at home, and one when they travel abroad. It builds up."
Pyramid predicts that subscription penetration in western Europe will rise from 109 percent in 2006 to 133 percent in 2012. North America will grow from 76 percent to 99 percent during the same period, while Latin America will rise to 84 percent.
Africa and portions of the Middle East are the only regions where subscriptions are expected to remain below the 50-percent mark by 2012. Due to their size, however, these markets belong to the group that will account for a whopping 61 percent of total subscriptions that year, Pyramid predicts.
Ericsson stands out as one of the most proactive and innovative vendors in high-growth regions because it has been able to deliver efficient networks and services that help operators contain costs, Arathoon says.
Now, vendors and operators alike must figure out how to retain these new subscribers.
"I think it's fairly easy to sign up new subscribers," Arathoon says. "Building services, keeping subscribers and making them profitable - that's the challenge for these operators."
