23.04.2008
Source: VEDOMOSTI (Russia)
Date: 23.04.2008
How much for the world market?
Altimo estimates emerging mobile markets higher than developed ones
Altimo evaluates the world mobile market
Mobile companies operating in developing countries are already more expensive than those in developed markets, according to a research by Altimo, asset management company for Alfa Group.
Altimo carried out a research of the world mobile market in cooperation with the Russian Economic School (RES), British Cass Business School and University of Illinois. According to Professor of Finance at RES, Aleksey Goryaev, the price of public companies was calculated as capitalization plus debt, non-public companies – by revenue multipliers and cost of traded companies; when determining the volume of each mobile market, the research took into account the value of national operators that are members of international public holding companies.
As of late January, the researchers estimated the world mobile market at $2.4 trillion, which is about 3.8% of the world economy, and by 2013 its share will almost double to 6.9%. Already, emerging markets account for 60% of the value of the world mobile assets, and in five years their chunk will rise to 70% (developed countries accounting for the rest). The researchers predict that in 2008-2013, thanks to the increasing penetration of mobile communications, such countries as Ethiopia, Congo, Nigeria, Egypt, India, Pakistan, Bangladesh, Iran, Indonesia, the Philippines, Burma, Vietnam, and Ukraine will increase their share in the world market, while ARPU growth will stop in western countries.
Altimo’s Senior Vice President, Kirill Babaev, who headed the research, admitted that Altimo is «especially interested in the growth of the emerging markets’ share, which would help searching for new investment opportunities». Last year, Altimo unsuccessfully tried to acquire assets in Vietnam and Indonesia, and, according to Vedomosti’s sources, conducted negotiations in Iran and Burma, although has not achieved much success so far. VimpelCom has been trying to enter the Vietnamese market since September 2007, while Sergey Soldatenkov, General Director of MegaFon, believes that stable assets only remain in Iran and Africa.
According to Kirill Semenov, Head of the International Press Service of JSFC Sistema, the most attractive markets for Sistema are India (where it already controls Shyam Telelink, a minor player), South East Asia and Africa. However, apart from penetration level and large population, choice criteria include fast-growing economy and low political risks. Obviously, Ukraine does not meet these criteria, at least because of the high penetration level (119.4% as of late March 2008, according to AC&M-Consulting), says Mr Semenov. Dag Melgaard, Vice President of the Norwegian Telenor (Altimo’s partner in VimpelCom, owns 29.9%), said the research results were «self-evident». He noted that this was proven by Telenor’s presence in such markets as Thailand, Malaysia, Pakistan and Bangladesh.
Who is the fastest
Regions that in 2008-2013 will demonstrate the fastest growth of mobile asset capitalization: South Asia (23.7% per annum), Africa (21.1%), South East Asia (14.7%), East Asia (14.5%) and Middle East (14.2%). CIS market will grow slower – at 12.8% a year (world average – 13.3%).
