Developing states set to lead phone link-ups
Emerging markets, including Africa, the Middle East, eastern Europe and Latin America, account for more than half of the world’s total cellphone and fixed-line telephone connections of 3.3 billion. Last year the emerging market connected 2 billion people in both fixed-line and cellphones compared with 1.3 billion in developed regions.
The total global telecommunications connection is expected to grow to about 4 billion in the next five years.
Gartner said that while sceptics pointed to a multitude of problems, the rate of economic and population growth meant developing regions offered major potential for communications expansion.
"Emerging markets may be underpenetrated by communications services, but the hunger for improved connections is strong," said Gartner research director Jouni Forsman.
Last year, the emerging market reported revenue of $359 billion (R2.6 trillion) from its 2 billion connections. In developed markets 1.4 billion connections generated revenue of $889 billion. Average revenue per user (ARPU) in emerging markets is about a quarter of that in the developed world.
"Compared to disposable income, phone users in developing regions are spending five times more on communications on a [per user basis] than their counterparts in developed countries," Forsman said.
In South Africa, Cell C, MTN and Vodacom are reporting lower ARPU as they sign up lower-income customers.
Gartner expected South Africa, which had an estimated 25 million cellphone users last year, to sign up 31 million subscribers by 2010. But the country has already beaten Gartner’s forecast as there are an estimated 33 million cellphone users. Fixed-line users in South Africa stood at more than 4 million last year and are expected to grow by 938 000 to 5.9 million.
But the fixed-line business is under pressure as more people sign up to cellphone users and there will be an increase in competition for Telkom when the second national operator, Neotel, offers services next year.
South Africa will account for 0.5 percent of the total world telecoms connections of 1.6 billion by 2010. Nigeria is expected to account for 2 percent of these additions.
Gartner said that over the next four years it would be cellphone connections that would drive the industry. Gartner predicted that global cellphone connections would increase by 1.5 billion by 2010. Emerging markets would account for 87 percent of the increase. Worldwide, 50 percent of new connections in the next five years will come from Brazil, Russia, India, China and Indonesia.
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