A look at the top 10 carriers based in emerging markets by revenues

December 6, 2007

19 Min Read
Top Ten: Emerging Markets Carriers

The growth of telecom services in emerging markets has attracted the interest of the biggest worldwide carriers, all of them grappling with mature markets at home, including the likes of Vodafone Group plc (NYSE: VOD), Orange (NYSE: FTE), and Portugal Telecom SGPS SA (NYSE: PT). But who is their competition? And which are the largest carriers operating solely in developing countries?

The table below shows the Top 10 emerging markets carriers by revenues (converted into U.S. dollars) for the six months to September 30. And from the links at the bottom of this page, you can read more about each carrier's size, scope, and competitive situation. But first, here's the Top 10 list:

Table 1: Top 10 emerging markets carriers by revenues

Ranking

Carrier

Country

Revenues for 6 months to Sep 07 (in US$ billions)

Revenues for 6 months to Sep 07 (in local currency)

1

China Mobile

China

24.32

180.76 billion Yuan Renminbi

2

America M�vil

Mexico and 16 other countries in the Americas

13.99

153.17 billion Mexican Pesoes

3

China Telecom

China

11.91

88.59 billion Yuan Renminbi

4

China Unicom

China

6.40

47.6 billion Yuan Renminbi

5

MTN

21 countries in Africa and the Middle East

5.06*

34.21 billion South African Rand

6

Saudi Telecom

Saudi Arabia

4.55

17.03 billion Saudi Riyals

7

MTS

Russia, Armenia, Belarus, Turkmenistan, Ukraine, and Uzbekistan

4.18

reports in US$

8

Telkom SA

14 countries in Africa

4.02

27.23 billion South African Rand

9

VimpelCom

Russia, Armenia, Georgia, Kazakhstan, Tajikistan, Ukraine, and Uzbekistan

3.21*

reports in US$

10

Bharti

India

3.11

122.42 billion Indian Rupees

*most recent figures available are for 6 months to June 07
VimpelCom reports third-quarter results on Nov. 29





Operating in the world's largest telecom market, China's state-run carriers dominate with three entries in the top 10 thanks to sheer number of subscribers. At the other end of the scale, Saudi Telecom Co. (STC) makes the list, thanks to the highest average revenue per user (ARPU) in the Middle East.

Table 2: Subscribers as of Sept. 30

Ranking by revenues

Carrier

Subscribers as of Sept. 30 (in millions)

Ranking by subscriber

1

China Mobile

349.66

1

2

America M�vil

147.2

3

3

China Telecom

223.44

2

4

China Unicom

115.92

4

5

MTN

54.16

6

6

Saudi Telecom

19.5

10

7

MTS

77.97

5

8

Telkom SA

36.18

9

9

Vimpelcom

47.6

8

10

Bharti

50.95

7





The top three -- China Mobile Ltd. (NYSE: CHL), América Móvil S.A. de C.V. , and China Telecom Corp. Ltd. (NYSE: CHA) -- are way ahead of the pack, with revenues well above $10 billion for the six-month period.

At number 10, India's Bharti Airtel Ltd. (Mumbai: BHARTIARTL) managed to edge out Kuwait-based Zain Group , with its second and third quarter numbers to make it onto the list -- the latter had reported higher revenues during the first quarter of this year.

But those are just a few of the big, emerging carriers. Click the links below for more on each telco making this white hot list:

  • China Mobile

  • América Móvil

  • China Telecom

  • China Unicom

  • MTN

  • Saudi Telecom

  • Mobile TeleSystems (MTS)

  • Telkom South Africa

  • VimpelCom

  • Bharti Airtel

— Nicole Willing, Reporter, Light Reading



To Page 2

The world's largest telecom operator by subscribers, China Mobile tops the list with revenues of more than 180.76 billion Yuan Renminbi ($24.32 billion) over the last two quarters -- close to double that of runner-up América Móvil. China Mobile had 349.66 million subscribers at the end of September, giving it the lion's share of China's wireless market at around 68 percent.

Concentrating on growth in rural areas, China Mobile has expanded its GSM network to cover 97 percent of China's estimated population of 1.3 billion. The lower revenues brought in by rural users, which now account for around 60 percent of new subscribers, have been offset by the increase of value-added data services in the more mature urban markets.

Back in January the carrier made its first overseas acquisition, buying Millicom International Cellular SA (Nasdaq: MICC) 's stake in Pakistan's Paktel. The company has been rebranded as CMPak and now has 1.23 million subscribers, according to the Pakistan Telecommunication Authority .

See the following links for recent China Mobile news:

  • AlcaLu Signs Chinese Deals

  • NSN Wins Green Deal in China

  • ZTE Wins GSM Deal

  • Moto Wins China Mobile Deals



To Page 3

Headquartered in Mexico City, Latin American carrier América Móvil is controlled by Mexican hotshot Carlos Slim Helú, one of the world’s richest men.

The company operates under five brand names in 16 countries throughout Latin America and the Caribbean, in addition to a prepaid wireless service in the U.S. Its revenues for the six months to September 30 clocked in at 153.17 billion Mexican Pesos ($13.99 billion), earning it second place.

The company ended the third quarter with 143.4 million mobile subscribers across Latin America and 3.8 million fixed lines in Central America and the Caribbean, for a total subscriber base of 147.2 million.

Table 3: Am�rica M�vil's subscriber base

Country

Brand

Mobile subscribers (millions)

Fixed-line subscribers (millions)

Mexico

Telcel

47.52

Brazil

Claro

27.98

Colombia

Comcel

21.26

Argentina, Paraguay, and Uruguay

CTI M�vil

13.52

U.S.

TracFone

8.8

Guatemala, Nicaragua, El Salvador, Honduras

Claro

7.35

2.11

Ecuador

Porta (Conecel)

6.6

Peru

Claro

4.82

Puerto Rico, Dominican Republic, Jamaica

Claro

3

1.69

Chile

Claro

2.56

Total

143.39

3.8





In Mexico, the carrier's Telcel operation is the market leader with close to an 80 percent share of the country's mobile subscribers.

The company primarily operates GSM-based networks but also uses CDMA in Guatemala, Puerto Rica, Dominican Republic, Chile, and Argentina.

Earlier this month América Móvil completed the acquisition of a 100 percent stake in Jamaican mobile operator Oceanic Digital, which operates a CDMA network under the brand MiPhone. (See América Móvil Buys Oceanic.)

To Page 4

China's largest fixed-line carrier has been combating falling voice revenues in the face of China Mobile's growth with an emphasis on broadband and value-added services such as IPTV and video conferencing. China Telecom Corp. Ltd. (NYSE: CHA)'s subscriber base began declining in August, but its size still puts it well ahead of operators outside China, making it to third on our list with six month revenues of 88.59 billion Yuan Renminbi ($11.91 billion).

China Telecom reported 223.44 million subscribers as of September 30, including 33.89 million broadband lines and 60.45 million wireless lines. The carrier has gotten around its lack of a wireless license by offering Personal Handyphone System (PHS) services to take advantage of mobile substitution.

A PHS network -- known as a Personal Access System (PAS) in China -- is a wireless local loop system that uses a mini-cell architecture to deploy voice and data services more cheaply than GSM. It provides the user with a fixed-mobile service -- acting as a cordless phone within the home and a mobile outside.

China Telecom's services also include domestic and international long distance, enterprise data communications, and integrated information applications.

The carrier primarily operates in China's Southern and Western provinces, while the country's other fixed-line provider, China Netcom Corp. Ltd. (NYSE: CN; Hong Kong: 0906), covers the Northern provinces.

See below for China Telecom news:

  • China Telecom Deploys Sable

  • Hunan Deploys NSN DSLAMs

  • China Telecom Likes VZB

  • Redback Wins in China

  • Shanghai Telecom Uses AlcaLu

  • NSN Wins China Contract

  • UTStarcom Boasts Chinese IPTV

  • AlcaLu Wins in China

  • China Telecom Picks UTStarcom

  • China Telecom Adds VP



To Page 5

China Unicom Ltd. (NYSE: CHU) is China's only full service provider, operating GSM and CDMA-based mobile services, domestic and international long distance, data, and Internet services. The carrier ended September with 115.92 million GSM-based subscribers and 40.110 million CDMA-based subscribers, reporting combined revenues of 47.6 billion Yuan Renminbi ($6.4 billion) for the second and third quarters of the year.

Rumors have persisted for years that China Unicom could be split up and its assets divided between China Telecom and China Netcom, as part of a government restructuring that would allow the fixed-line operators to enter the mobile market when 3G licenses are (finally) awarded.

In August, South Korean operator SK Telecom (Nasdaq: SKM) converted $1 billion in bonds held in China Unicom into shares for a 6.61 percent stake, a move seen as strengthening its alliance with the carrier. The two formed a partnership in 2006 to develop Unicom's CDMA network, and SK Telecom has been keen to expand further into China. (See Investments Line Up for Chinese 3G.)

To Page 6

South Africa-based Mobile Telephone Networks (MTN) operates GSM networks in 21 countries across Africa and the Middle East. The carrier's most recent six-month revenue count available is for the two quarters to June 2007 as the carrier does not report separate quarterly financials.

During the first half of the year, MTN brought in revenues of 34.21 billion South African Rand ($5.06 billion) from 48.35 million subscribers. By the end of the third quarter, its subscriber base had grown to 54.16 million, a 12 percent increase.

Table 4: MTN subscriber numbers

June 2007 (in thousands)

September 2007 (in thousands)

Nigeria

14,036

14,985

South Africa

13,601

14,076

Ghana

3,392

3,872

Cote d'Ivoire

2,161

2,302

Iran

1,983

3,720

Cameroon

1,954

2,238

Uganda

1,869

2,094

Syria

1,592

2,896

Sudan

1,523

1,884

Yemen

1,301

1,426

Botswana

663

750

Benin

569

562

Afghanistan

527

877

Rwanda

486

576

Republic of Guinea

393

523

Swaziland

320

356

Congo (Brazzaville)

281

279

Liberia

253

272

Zambia

202

194

Guniea-Bissau

141

176

Cyprus

99

106

Total

48,346

54,162





MTN doubled it size in June 2006 when it acquired Dubai-based Investcom's operations in 11 countries for $5.5 billion. (See MTN Buy Energizes EMEA M&A.)

Africa is the fastest growing region in the world for mobile services, and MTN is one of several carriers that has pledged to invest heavily in the continent. (See Carriers Plan Africa Capex.)

Operators in Africa face the challenge of building out the capacity of their networks to meet rapidly growing demand for telecom services in countries with little communications infrastructure. MTN has aggressive rollout plans in countries like Nigeria, its largest market, where mobile networks are under pressure from subscriber growth. (See African Expansion Boosts MTN.) In May, MTN Nigeria issued a statement promising customers that its network quality would improve.

The carrier has invested $3.1 billion so far in its Nigerian network and last month announced it had arranged a $2 billion loan to expand its GSM coverage and build a nationwide fiber-optic network.

Click the links below for news of MTN's recent equipment contracts:

  • Aircom Optimizes MTN

  • MTN Picks Cambridge Broadband

  • Redline Wins in Cameroon

  • Astellia Wins MTN Deal

  • MTN SA Issues Fiber RFP

  • Ericsson Boasts GSM Milestone



To Page 7

Saudi Arabia's incumbent operator maintains a monopoly in the fixed-line market, while its Al Jawal mobile subsidiary competes with mobility. Saudi Telecom is the largest operator in the Middle East by market value and claims the sixth spot with revenues of 17.03 billion Saudi Riyals ($4.55 billion).

STC has not reported recent subscriber numbers, but it had 15.5 million mobile customers at the end of June, along with around 4 million fixed-line subscribers. Saudi Arabia is seen as the most attractive market in the Middle East, with a high average revenue per user (ARPU) and lower penetration than its neighbors. It's the ARPU that puts STC into the top 10, with subscriber numbers lower than any of the other carriers on the list.

Ovum predicts Saudi Arabia's mobile growth will be one of the highest in the world over the next couple of years, with a 21 percent compound annual growth rate (CAGR) between 2005 and 2010.

Losing its mobile monopoly has put the squeeze on STC's profits, and the carrier will face new competition when Kuwait's Zain starts a third mobile operator next year and three new fixed-line operations get up and running. (See MTC Bids $6.1B for Saudi Mobile License and Groups Bid for Saudi License.)

STC has responded by turning to foreign expansion and has said it aims to get 10 percent of its revenues from outside Saudi Arabia by 2010. In June, STC made its first investment abroad in a $3.05 billion deal with Binariang GSM Sdn. Bhd., which controls Malaysian national operator Maxis Communications Bhd. . The investment gives the carrier a 25 percent stake in fixed and mobile operator Maxis, a 51 percent stake in Indonesian operator PT Natrindo Telepon Seluler (NTS), and an indirect holding in Maxis subsidiary Aircel Ltd. in India. (See Saudi Telecom Invests $3B in Maxis.)

On November 27, Saudi Telecom won the auction for Kuwait's third national mobile license with a bid of $900 million, and it is considering further acquisitions. (See Nine Bid for Kuwait License.)

To Page 8

Moscow-based Mobile TeleSystems OJSC (MTS) (NYSE: MBT) is the largest mobile operator in Central and Eastern Europe. The carrier provides GSM-based services in 87 of the 89 regions in Russia, as well as Armenia, Belarus, Turkmenistan, Ukraine, and Uzbekistan.

MTS's revenues for the six months to September 30 were $4.18 billion, on the back of a subscriber base that reached a total of 77.97 million. Russia was the world's fourth largest emerging mobile market in 2006, and MTS's domestic subscribers reached 54.42 million in September.

Table 5: MTS subscribers

Country

Subscribers (in millions)

Russia

54.42

Ukraine

19.91

Uzbekistan

2.29

Turkmenistan

0.29

Armenia

1.07

MTS Belarus*

3.66

Total

77.97

*MTS owns a 49 percent stake in Mobile TeleSystems LLC, a mobile operator in Belarus, which is not consolidated.





MTS was originally founded by Moscow City Telephone Network (MGTS) , Deutsche Telekom AG (NYSE: DT), Siemens AG (NYSE: SI; Frankfurt: SIE), and several Russian shareholders. It now trades on the NYSE, with Russian consumer services conglomerate Sistema JSFC (London: SSA) controlling a 52.8 percent stake.

Armenia is MTS's newest market -- in September the carrier acquired an 80 percent stake in International Cell Holding, which owns a 100 percent indirect stake in mobile operator K-Telecom. K-Telecom, Armenia's largest mobile carrier, operates under the brand VivaCell. (See VivaCell Picks Redknee and MTS Enters Armenia.)

To Page 9

South African incumbent Telkom SA Ltd. (NYSE/Johannesburg: TKG) is 39 percent state-owned. It provides fixed-line voice and data services, mobile services through Vodacom Pty. Ltd. (its 50:50 joint venture with Vodafone), directory services, wireless data, and Internet services.

In February, Telkom acquired Africa Online, an ISP with operations in Cote d'Ivoire, Ghana, Kenya, Namibia, Swaziland, Tanzania, Uganda, Zimbabwe, and Zambia. And in April it picked up a 75 percent stake in Nigerian fixed and mobile carrier Multi-Links.

Telkom, which begins its financial year in April, reported half-year revenues of 27.23 billion South African Rand ($4.02 billion). The carrier ended the first half with 4.62 million fixed-line subscribers in South Africa and 31.56 million mobile subscribers in five countries through Vodacom. Vodacom's revenues reached 22.82 billion South African Rand ($3.37 billion), of which 50 percent are included in Telkom's results and 50 percent are attributable to Vodafone.

Table 6: Telkom SA subscribers

Country

Subscribers (in thousands)

Fixed lines

South Africa

4,621

Vodacom

31,564

South Africa

23,297

Tanzania

3,700

Democratic Republic of Congo

3,200

Mozambique

1,100

Lesotho

332

Multi-Links

Nigeria

262

Africa Online

Cote d'Ivoire, Ghana, Kenya, Namibia, Swaziland, Tanzania, Uganda, Zimbabwe, Zambia

14





Vodacom competes with MTN and Cell C in South Africa, but Telkom's fixed-line monopoly has been blamed for the high cost of telecom services in the country, as it controls international connections on the SAT-3 submarine cable. A second national operator, Neotel, was set up last year and is set to launch consumer services in 2008. (See Neotel Unveils Enterprise Suite.)

Facing falling fixed-line subscriptions and the introduction of competition Telkom is in the midst of a strategic transformation focused on building a next-generation network (NGN), introducing converged services, and expanding its presence across Africa.

With the lack of fixed-line infrastructure in the region, Telkom plans to expand Africa Online through wireless broadband and satellite networks, particularly for corporate and multinational organizations in East and West Africa. New deployments are planned for early 2008 in Kenya, Tanzania, and Ghana.

In September Telkom announced it's reviewing its mobile strategy and is in talks with Vodafone and MTN. Vodafone has expressed interest in raising its stake in the operator by 10 or 20 percent, and if Telkom divests its holding, the rest could be listed on the South African stock exchange. Independence from Telkom would leave Vodacom free to pursue acquisitions that would otherwise run afoul of the competition authorities.

To Page 10

Vimpel-Communications (NYSE: VIP), which operates under the brand Beeline, is Russia's second largest mobile operator after Mobile TeleSystems (MTS). It runs GSM networks in Russia, Armenia, Georgia, Kazakhstan, Tajikistan, Ukraine, and Uzbekistan.

VimpelCom, which reports third-quarter results on November 29, brought in revenues of $3.21 billion during the six months to June 30, just making it to ninth place on the list.

It had 47.6 million subscribers at the end of June, of which 40.14 million were in Russia.

Table 7: VimpelCom subscribers at June 30

Country

Subscribers (in millions)

Russia

40.14

Kazakhstan

3.86

Ukraine

1.82

Uzbekistan

1.12

Armenia

0.47

Tajikistan

0.2

Georgia

0.01

Total

47.62





The carrier has been at the center of an ongoing legal tussle between shareholders Telenor Group (Nasdaq: TELN) and Alfa Group over strategy, but Telenor has been making moves of late to settle the dispute, dropping a lawsuit blocking VimpelCom's acquisition of mobile operator Ukrainian Radio Systems. (See Telenor Files Suit Against Alfa and Court Affirms VimpelCom Buy.)

VimpelCom is reportedly planning to close syndication of a $4.5 billion loan in early December, fueling speculation that it's positioning to acquire fixed-line operator Golden Telecom Inc. .

  • VimpelCom Forms Vietnam JV

  • VimpelCom Buys CSK



To Page 11

Bharti Airtel Ltd. (Mumbai: BHARTIARTL) is the largest carrier in India, the world's fastest-growing mobile market. It had 50.95 million subscribers at the end of September, but comparatively low average revenue per user pushes it to the bottom of the list. Bharti's revenues for the period were 122.42 billion Indian Rupees ($3.11 billion).

The carrier runs India's only nationwide GSM network, covering all of the country's 23 regions. It also provides fixed-line and DSL services in 14 regions. The vast majority of Bharti's subscribers are served by the GSM network -- just 2.08 million are fixed-line and/or broadband subscribers.

Bharti runs operations in the Channel Islands -- Jersey Airtel and Guernsey Airtel -- in partnership with Vodafone, and recently received a license to operate in Sri Lanka where it will launch services next year.

Recent Bharti news includes:

  • India Racks Up Mobile Subs

  • Bharti Announces Q2

  • Bharti Crosses 50M Subs

  • Bharti Picks Optibase

  • Huawei Wins at Bharti

  • Bharti Picks UTStarcom

  • Bharti Names Lanka Head

  • Bharti Gets Singapore License

  • ECI Wins Bharti Airtel Deal

  • Bharti Preps Launch

  • Bharti Airtel Deploys BubbleTalk

  • Ericsson Scores $2B at Bharti

  • Nokia Siemens Lands $900M India Deal



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