Feature Article

June 04, 2014

Internet Access Drives Revenue Growth in Booming Markets

Even in Asia, the fastest-growing region for mobile services, growth of voice revenues is muted.

Excluding the mature market of Japan, voice revenue is growing at a 2.5 percent compound annual growth rate (CAGR), through 2017, IDC researchers predict.

Also, based on adoption of smartphones and additional investment in 3G and 4G networks, data revenues from Internet access services will grow at a CAGR of 19.3 percent from 2012 to 2017.

Significantly, demand for Internet access is driven largely by end user demand for all sorts of over the top applications, IDC reports.

“Growth pace for data connectivity in 2014 will continue to be strong and we expect the market to reach $141.2 billion by 2017,” says Ashadi Cahyadi, IDC senior research manager.

Long Term Evolution (4G) subscribers will be added at the fastest rate -- 44.3 percent compound annual growth.

Singapore will lead the growth in the region with 103 percent CAGR in 2017, IDC says.

The significant fact is that even in the fast-growing emerging markets of Asia, data revenues have become “imperative.”

The total mobile services market revenue in Asia and Oceania will reach $271.4 billion by 2014.

As you would expect, China and India will represent a huge share of total customers and revenue. But revenue growth will be highest in Indonesia, Thailand and the Philippines.

India is the fastest-growing smartphone market in the Asia Pacific region with a year-over-year smartphone shipment growth of over 186 percent in the first quarter of 2014, though from a small installed base.

Smartphone penetration in India was about 10 percent in 2013, but has grown to about 24 percent in the first quarter of 2014.

Availability of lower-cost smartphones is driving the trend. The sub-$200 smartphone category represented as much as 78 percent share of sales.

Phablets (5.5 inch-6.99 inch screen size smartphones) in the first quarter of 2014 represented about five percent of the overall market, growing by 125 percent in the first quarter of 2014.

The key observation is the importance Internet access revenues now represent, even in emerging markets.

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