Top 10 Emerging Mobile Markets 639492

A rundown of the top 10 emerging markets in mobile and how much they grew in 2006

March 15, 2007

7 Min Read
Top 10 Emerging Mobile Markets

Developing countries now account for more than half of mobile subscriber growth worldwide, with the top 10 adding around 285 million new subscribers in 2006 alone.

With the exception of the U.S., the world's top 10 mobile growth markets are all in countries considered to be "emerging" in Asia/Pacific, Africa, and Latin America.


Mobile growth in these countries has accompanied economic expansion, deregulation, and the need for communications infrastructure where there is a lack of fixed-line connectivity. Research has found that with every 10 percent increase in mobile phone penetration, a country's GDP increases by 0.6 percent.

As the table below shows, India and China are way ahead of the pack in terms of sheer volume: India added the most, more than 73 million new mobile customers, while China, in second place, added close to 68 million new users. The next country on the list, Pakistan, added 29 million. The U.S. added 23 million subscribers last year, which would have put it in fifth place.

Table 1: World's Top 10 Emerging Mobile Growth Markets


Subscriber additions in 2006 (in millions)

Total subscribers Dec 2006 (in millions)

% increase over Dec 2005









































Here is a rundown of the top 10 emerging mobile growth markets that registered the largest increases in new mobile subscribers in 2006:

1. India
India emerged as the hottest mobile market in the world during 2006, overtaking China to claim the top spot.

Indian mobile operators signed up 73.56 million new customers last year, a 97 percent increase, to reach 149.5 million in total. A combination of a growing middle class and the world's lowest mobile call rates (as little as US$0.02 a minute) has sparked booming demand for telecom services in a country where the population exceeds 1.1 billion. Just 15 percent of the population has a mobile phone, leaving huge room for growth.

That potential has telecom companies scrambling to invest in the market and prompted a bidding war over India's fourth-largest operator, Hutchison Essar , which has Vodafone Group plc (NYSE: VOD) shelling out more than $11 billion for a majority stake. (See Vodafone Wins Battle to Buy Essar.)

2. China
China remains the world's biggest wireless market, boasting 461.08 million mobile subscribers at the end of 2006. Like India, China has a population of well over 1 billion people and a booming economy driving telecom growth.

China saw a 17.2 percent increase in new mobile users last year, smaller than in previous years as its urban markets reach saturation, but that still represented an addition of 67.68 million subscriptions.

3. Pakistan
In 2003, Pakistan had just 2.8 million mobile users. In 2006, it leapfrogged its way up the list with a 147 percent increase in subscribers to reach 45.21 million.

The government awarded licenses to Norway's Telenor Group (Nasdaq: TELN) and United Arab Emirates company Warid Telecom Pvt. Ltd. in 2004, taking the number of mobile operators in Pakistan to six. Wataniya Telecom is set to launch operations there later this year.

With a young and mostly rural population and a growing economy, Pakistan provided a familiar environment for China Mobile Communications Corp. , which made its first acquisition outside China when it bought Paktel in January. (See China Mobile Goes Shopping Abroad.)

4. Russia
The largest mobile market in Europe, Russia added 26.12 million new subscribers in 2006 for a total subscriber base of 151.92 million. Russian mobile users tend to own several SIM cards, skewing the market penetration numbers as the country's actual population is around 140 million. Analysts reckon the number of Russians with a mobile phone is closer to 68 percent.

As Russia reaches market saturation, operators are turning to data services and tailored pricing packages to drive growth. The market slowed in 2005, but accelerated again in 2006 as carriers introduced messaging and content services.

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5. Indonesia
The world's fourth most populated country, but with a far lower teledensity than its neighbors, Indonesia is seen as one of the key emerging markets and has attracted investment from regional heavyweights such as Singapore Telecommunications Ltd. (SingTel) (OTC: SGTJY), Hutchison Telecommunications International Ltd. (NYSE: HTX), and Telekom Malaysia Bhd.

The country's 10 operators added around 23 million subscribers last year. Indonesia poses a unique challenge for carriers in that 6,000 of its 17,500 mountainous islands are inhabited. Mobile coverage is largely focused on the island of Java, although operators are in the process of expanding their networks, and four new entrants are preparing to launch services.

Like most emerging markets, mobile growth in Indonesia took off with the introduction of prepaid services. According to the CDMA Development Group (CDG) , Indonesia has one of the most advanced CDMA2000 markets in the world, providing prepaid voice and advanced data services. (See CDG: Indonesia Hotbed for EV-DO .)

6. Ukraine
Mobile growth in Ukraine accelerated towards the end of 2006 -- in December alone its operators added 5.6 million subscriptions, 29 percent of their growth for the year. Ukraine ended the year with 49.21 million subscribers, a 63 percent increase over 2005.

Russian carrier Mobile TeleSystems OJSC (MTS) (NYSE: MBT) said recently that it plans to invest around $700 million to expand in the Ukraine this year as the economy is growing faster than other Eastern European countries.

7. Brazil
Brazil accounts for more than one third of Latin America's mobile subscribers, but its penetration rate is lower than many of its neighbors -- around 50 phones for every 100 people, compared with 70 in countries such as Argentina and Chile. Brazilian operators reported a 15.9 percent increase in subscribers last year to 99.92 million, but that was just half the 31.4 percent reported in 2005.

Analysts predict growth will sink further to around 10 percent in 2007 because, unlike their counterparts in other emerging markets, Brazil's operators have stopped subsidizing handsets and are focusing on post-paid subscribers, which bring in higher ARPU than prepaid subscribers.

8. Bangladesh
Bangladesh saw the second highest percentage increase in new subscribers last year as its mobile users more than doubled to 21.76 million. The subscriber base had been expected to reach 18 million.

Deregulation and foreign investment have helped spur growth in Bangladesh, attracting the likes of Telenor, Telekom Malaysia, SingTel, and Orascom Telecom , which hold major stakes in its operators. Warid Telecom International plans to launch the country's sixth operator in April.

In 2005, the government introduced a controversial tax on SIM cards that slowed growth and sparked protests from operators. The tax was reduced in August 2006.

9. Nigeria
Nigeria's mobile subscriber base hit 30 million in 2006, up from 18.6 million at the end of 2005. It contributed to around 24 percent of the African continent's subscriber growth last year and is set to surpass South Africa as its largest mobile market. (See Africa Racks Up Mobile Subs .)

The country's telecom infrastructure has suffered from under-investment, but in July last year state-run operator Nigerian Telecommunications Ltd. (Nitel) was privatized. (See Transcorp Wins Auction for Ailing Nitel.)

Nitel's mobile subsidiary, Nigeria Mobile Telecommunicarions Ltd. (M-Tel) , has begun expanding its network capacity, and in January the government began awarding spectrum, signaling growth will continue in 2007. (See Moto Wins GSM Deal.)

10. Vietnam
The Vietnamese government made developing the country's IT and telecom sectors a priority as it prepared to enter the World Trade Organization (WTO), a strategy that paid off last year as the country added 10 million mobile users. Vietnam has exceeded the telecom targets it had set for 2010, and most operators expect to double their subscriber counts this year.

Since regulations were relaxed in 2005, Vietnam has seen increased competition as the number of mobile operators has grown from four to seven. Most recently, Hutchison Telecom International launched HT Mobile in January 2007.

— Nicole Willing, Reporter, Light Reading

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