23.04.2008
Source: Young People online (Vietnam)
Date: 23.04.2008
According to Altimo Foundation’s new index announced on April 23rd, evaluating the investment opportunities represented by 80 international mobile telecoms markets.
According to this, Asia: the global mobile investment hotspot until 2010.
Eemerging Markets are Credit Crunch cushion: China, India and Russia fuelling growth, 3.3bn mobile phone owners: still half the world yet to dial in. Southeast Asian mobile market forecast to double in value in five years, China’s mobile market cap closing fast on North America, Balance of power set to tip further in Emerging Markets’ favour*
Emerging markets - evening the score
The study found that mobile market ‘clout’ is now more heavily weighted towards the emerging markets than might at first be imagined. «The West,» including North America and Western Europe and home to international giants such as AT&T, Vodafone and Telefonica, now accounts for just 40% of the total market capitalisation of the world’s mobile telecoms assets. The «Emerging World,» incorporating Asia, Africa, the CIS and Eastern Europe, now accounts for the lion’s share at 60% evening the score for the first time ever in the history of mobile communications.
Clash of the titans – a new balance of power
The study also noted a significant shift in the balance of power within the world’s six largest mobile markets. Taken together these six leading markets – USA, China, India, Japan, Russia and the UK – account for a half of the total capitalization of the world’s mobile telecoms industry. Most notably, the Indian market, with a total value of $129 billion, now outstrips that of Japan at $123 billion, a region known as having a highly developed mobile market. Perhaps of even more significance is the fact that China, with a 14% global share, is now fast approaching the US with 17%. And Russia, one of the countries to adapt so rapidly to the mobile communications revolution in the last decade, is now the fifth largest mobile market in the world, by market cap.
A continuing shift
Looking ahead, the study finds that penetration trends within emerging markets such as India, Vietnam and the Philippines are likely to continue to drive the capitalisation share for the emerging market operators, at a time when ARPU and penetration in the West stagnates.
In fact, the study shows that the Emerging World is set to dominate the global mobile market going forward, representing 70% of the value of the world’s mobile telecoms assets by 2013. It is unsurprising, therefore, that the balance of power is predicted to shift further still from west to east: this study predicting that China will overtake the USA by 2013 with a 16% stake of the world’s mobile assets, compared to the USA’s 14%.
Penetration trends within the emerging markets will continue to power this seismic shift. Whilst, for example, the UK average annual market cap growth for 2008-2013 looks set to come in at 7.1%, Indonesia is forecast to achieve growth of 17% per annum: more than double that of the UK. Even more impressive is Vietnam, set to grow at 23.5% per annum: more than three times the UK’s predicted growth rate.
Commenting on the findings, Kirill Babaev, Altimo Foundation’s CEO, commented: «As at the end of January 2008, the total capitalization of the world’s mobile industry stood at approximately $2.3 trillion, which equates to 3.8% of the world’s total capitalisation and 4.8% of the 2006 world’s GDP. This is clearly a massive market and one which is growing day by day. The shift in the balance of power between the traditional markets and those of the new economies is particularly interesting to us as we seek investment opportunities in the most exciting emerging regions of the world.»
Altimo’s third index
This Index was presented today at Total Telecom international telecoms conference in London by Sir Julian Horn-Smith, one of Altimo’s International Advisory Board members.
The third Altimo Index highlights the following trends within the global mobile communications market:
- Eastern and South Eastern Asian mobile markets remain most favourable for investors due to continued rapid user growth and mobile spending driven by strong macroeconomic performance. As with the first two indices, the third Index explicitly demonstrates this as a continuing theme. Indonesia, the Philippines, and Vietnam occupy three of four top areas for investment in Asia.
- Growth in Southern Asia looks set to continue to 2010, with India, Sri Lanka, and Bangladesh occupying top ten positions. However, the total rating of Southern Asia is flattening due to high competition in the Indian market.
- The CIS region remains an attractive target for mobile investments in the medium-term. Despite the region’s largest markets (Russia and Ukraine) approaching saturation and intensifying competition, operators are expected to increasingly profit from the growth in value-added services.
- Most developed economies in North America and Europe are reliant on new mobile products to grow since their markets have saturated with penetration above 90%.
- The investment outlook for most African mobile markets is poor to medium in the short-term, due to weak commercial and political stability. However, oil exporting countries as well as those with strong economic growth such as Algeria, Mozambique, Egypt and Angola show impressive growth in output and private spending, thus increasing penetration, revenues and profit margins of mobile operators.
- At the end of 2007, the world’s mobile industry has reached 50% penetration level, which means that over 3.3 billion people now own a mobile phone.
Kirill Babaev, Altimo Foundation CEO, concluded:
«The Altimo Index clearly outlines that the current slowdown in the US and other highly developed countries is cushioned by robust growth in emerging economies. Altimo’s focus on these markets has enabled it to double its assets’ value to $30 billion last year, and as this Altimo Index shows, there are still plenty of opportunities within less developed mobile markets in the near future. »
