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November 03, 2009

Global Service Provider Revenue to Grow 2.8 Percent Annually to 2013

By Gary Kim, Contributing Editor

Global telecom service revenue growth will slow to a five-year compound annual growth rate of 2.8 percent between 2010 and 2013, after growth rates of 5.5 percent in 2008 and 9.3 percent in 2007, say researchers at Hot Telecom.

Global service provider revenue is expected to increase by $257 billion to reach close to $2.0 trillion in 2013, Hot Telecom says.

As you would expect, an increasing percentage of the world’s telecom revenue continues to be generated by mobile and Internet services, with some losses in many markets in the fixed line segment of the business.

The mobile sector now generates 52.8 percent of the total telecom service revenue, fixed line service represents 32.4 percent and Internet represents 14.8 percent of total revenue.

But regional differences appear to be growing. The report confirms that broadband will continue to be the fastest growing telecom sector with a forecasted global CAGR of 10.8 percent over the next five years.

The bulk of the broadband percentage growth will continue to come from low-broadband penetration regions such as the Middle East and Africa, Latin America and Eastern Europe.

Asia is the largest region by far and now represents 48.5 percent of global fixed connectins, 42.8 percent of mobile connections, 38.6 percent of Internet connections and 37.2 percent of broadband subscribers.

The Middle East and Africa will be the fastest growing region in all sectors, apart from mobile, with forecasted CAGRs of 4.7 percent of fixed line services, 9.6 percent mobile, 10 percent Internet access and 22.5 percent of broadband services.

By year-end 2008, the global aggregate number of fixed, mobile and Internet subscribers grew by 14.5 percent to over 5.8 billion. Nevertheless, for the first time in 2009, the growth in total telecom subscribers should drop into the single digits to 9.8 percent.

Market saturation and the global recession account for much of the slowdown, Hot Telecom says.

The growth in the number of total telecom subscribers should continue to slow over the forecasted period with a forecasted CAGR of 6.4 percent over the next five years to nearly eight billion at the end of 2013. The growth in number of subscribers will continue to mainly be driven by new broadband and mobile connections.

The mobile sector, which peaked in terms of expansion in 2004 and 2005 with growth rates of 25 percent each year, should continue to enjoy double-digit growth until 2011.

The number of mobile subscribers rose by 20.5 percent in 2008 to reach 3.97 billion customers. At that time, mobile penetration stood at 60.1 percent, a substantial increase over five years earlier, when mobile penetration was 22.3 percent.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Patrick Barnard

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