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
Country Subscriber additions in 2006 (in millions) Total subscribers Dec 2006 (in millions) % increase over Dec 2005
India 73.56 149.5 97
China 67.68 461.08 17.2
Pakistan 28.9 48.29 147
Russia 26.12 151.92 21
Indonesia 23 65 38.6
Ukraine 19.03 49.21 63.1
Brazil 13.7 99.92 15.9
Bangladesh 12 21.76 135
Nigeria 11.4 30 38
Vietnam 10 22.5 80

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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