Asia Pacific world’s hottest telco market

Telstra revenues place it 14th among world’s top telco service providers.

Research firm Gartner is predicting that the Asia Pacific telecommunications market will topple North America as the largest, most lucrative telecommunications market for 2008.

In its quarterly Global Telecommunications Market Take report, the firm listed Telstra as 14th among the world’s top 20 telecom service providers over the past three years, securing 1.3 percent of global telco service revenues in 2007.

AT&T topped the 2007 telco service providers list with 7.5 percent of global revenues, followed by Verizon, NTT and Deutsche Telecom all with under 6 percent.

The Asia Pacific telecommunications market as a whole is tipped to reach US$513.1 billion this year, up 8 percent from 2007, while the North American market is projected to reach $511.6 billion, a 4.5 percent increase.

Principal research analyst at Gartner, Will Hahn, conveyed predictions that by 2012 the ratio of mobile to fixed connections will exceed 4-1 and top US$1 trillion by 2010.

“Our breakdown of services clearly shows that fixed voice is in decline, but mobile voice, though currently growing, will also stagnate as a proportion of the market by 2012. The baton has clearly been passed to data services in the legacy sector,” he said.

By 2012 Gartner predicts mobile data services to account for 19 percent and mobile voice 43 percent of telecom services revenue, while fixed data and fixed voice will makeup 21 and 17 percent respectively.

Revenue from telecom services, which has traditionally dominated the market at four out of every five dollars earned in the sector, is expected to shrink as legacy revenue is no longer sufficient for carriers to justify investment.

“The telecoms equipment sector will return to a period of relative growth, thanks in part to the growing importance of emerging countries, mobile devices and equipment that must be deployed to support new and converged services,” Hahn said.

Revenue from telecom service is expected to reach US$1.6 trillion in 2008 and account for 81 percent of overall telecom revenue, four times higher than telecom equipment revenue. This ratio is expected to dip closer to 3-to-1 by 2012.

"Telecom service providers and equipment manufacturers alike must prepare growth plans that transform their offerings and their organisations,” Hahn said.

“Growth in legacy markets is ebbing fast, and the only way to maintain it will be via the scope to offer converged solutions, to provide service in non-traditional sectors and to enter and win in emerging markets whose profile is very different from more-mature regions."

According to Gartner, Nokia dominated the list of top telco equipment vendors of 2007 with 16 percent of global revenues, followed by Cisco, Motorola, Samsung and Alcatel-Lucent all at under 9 percent. Asian players Huawei and LG also made the top 10.

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Andrew Hendry

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