Subscriber Base Still Growing
In 2012, the world mobile subscriber base grew at a rate of 7.5% to reach 6.4 billion users. For 2013, growth should be 6.6% to reach a worldwide base of 6.8 billion mobile phone users.
Mobile Subscriber Base Development 2001-2013*
Mobile penetration worldwide is still growing in volume although 96% of the world population now has access to mobile communications. As the mobile market reaches saturation in mature economies (128 phones per 100 inhabitants), the main driver is developing countries and especially Asia and Africa, where mobile penetration is still below the world average. In 2012, China and India were the two largest markets in terms of mobile phone subscriptions with respectively 1,220 and 740 million mobile lines.
Mobile communications offer tremendous advantages over fixed communications, particularly in terms of deployment cost in developing regions that do not benefit from existing communication infrastructure. That is one of the reasons why most of the net subscriber additions come from developing countries and why they are progressively bridging the gap with developed economies in terms of mobile penetration.
The growth of 3G and 4G services, which reached almost 1,900 million subscribers in 2012 (compared to 940 million in 2010) is another major trend in the mobile phone market. With an average 27% of the world population in 2012 subscribing to these services, we forecast this figure will increase dramatically until 2017. Indeed, developing countries will be the driver of production thanks to high demand for connectivity combined to increasing purchasing power that will in turn foster mobile phone production in unit and value.
Smartphones, which provide internet connectivity features, large-screen with multi-touch interface, downloadable software from application stores, etc. will be the product driving the mobile telecom production in unit and value until 2017.
These high-end products were until recently reserved to mature economies because of their high prices, the necessity to have a 3G service and to pay for its access. But the 2012 – 2017 period will see more equal access to advanced services and the democratization of smartphones in all regions of the world resulting in a booming demand from developing countries. This trend is becoming possible because:
- More and more developing countries have operational 3G or 4G networks: The first Chinese 3G network was operational in late 2009 whereas the Indian operators began in late 2010. However the number of 3G/4G subscribers in China was still very low and by mid-2011, China Telecom had several million 3G users compared to 100 million in mid-2013. In 2013 With less than 10% of the Indian population subscribing to a 3G offer, potential smartphone penetration outlook is huge in this country. In addition, developed countries are expanding their offer to 4G leading in turn to a demand for compatible smartphones.
World Mobile Phone Production, in Value (in Million Euros)
A Cannibalizing Effect
The rise of the iPhone as an intuitive «all-in-one-device» has lead to the cannibalization of numerous consumer electronic markets. Indeed, the iPhone’s success is responsible for the decreasing sales of MP3 player, digital still cameras, portable game consoles and even printers due to the high image resolution.
Telecommunication Infrastructures and Networks
A telecommunications network is basically composed of three major layers, each corresponding to specific categories of equipment: the transport and broadcast layer, the core network layer, and the access network layer.
Top 10 Telecom Infrastructure Equipment Suppliers
||Fujitsu Network Products Japan
||Juniper Networks USA
||Nokia Siemens Networks Finland
In the Carrier Networks segment, market leaders are Ericsson (#1) followed by the Chinese Huawei (#2) with an impressive growth in 2012. Nokia Siemens Networks and Alcatel-Lucent are at the same level (#3), before the Chinese ZTE (#5) and the Japanese NEC (#6).
In the Enterprise and Private Networks segment, major suppliers are predominantly US-based with the undisputed market leader Cisco followed by Motorola Solutions (#2) and Juniper Networks (#3). Not so strong on this segment, Huawei (#4) is growing rapidly. Alcatel-Lucent (#5) has decided recently to exit the segment.
Market and Production Trends
The strong market drivers described above are partially offset by reduced capital expenditure capabilities of telcos, and the global weak economic climate. The global telecom infrastructure market is expected to grow on average by 3% per year between 2012 and 2017.
With Carrier global revenues set to grow only by 2% in average over the period under review, the Carrier Networks sub-segment is forecast to grow at only 2.5% between 2012 and 2017. Growth in new subscriptions is slowing in most countries around the world: mobile new subscriptions increased by 13.4% per year between 2009 and 2011, but by only 7.1% only between 2011 and 2013. And the Average Revenue Per User is still declining. In addition, new threats have emerged from new players in the landscape, like Over-The-Top (OTT) companies that do not provide revenues to telcos but get their revenues directly from the users.
Entreprise and private networks will benefit from a more positive market environment, growing on average 4.2% per year over the period 2012 to 2017. This sub-segment has experienced a serious slump in 2009 declining by 12% over 2008, before growing again by more than 20% in 2010. The development of cloud computing and associated services like SaaS (Software as a Service) will stimulate enterprise network sales.