IDATE: Mobile World Market

BARCELONA, Spain-(Business Wire)-February 17, 2009 - IDATE provides regular analyses of the world mobile markets' main trends - networks, terminals and services. On the occasion of the Mobile World Congress in Barcelona (16-19 February 2009), IDATE and ENTER have teamed up to publish the third edition of the special white paper: Mobile 2009: Markets & Trends taken from several IDATE market reports.

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Mobile services growth decreases by 4 points and the decline of fixed telephony becomes more acute

The world telecom services market is estimated at 1,365 billion USD in 2008 – a 4.2% increase over the year before – and is expected to be worth over 1,416 billion USD in 2009. With a total turnover estimated at 742.2 billion USD in 2008, mobile services account for 54% of the telecom services market and singlehandedly deliver all of the sector’s growth. But the annual growth rate has dropped from more than 12% in 2007 to 8% in 2008. The mobile customer base worldwide grew by another 17% in 2008, but is offset by a steady decline in average revenue per user (ARPU) which dropped to 17.50 USD a month in 2008. Meanwhile, fixed network services are stagnating.

The revenue generated by data services – whose growth is being spurred chiefly by broadband access – rose by 20 billion USD in 2008, while fixed telephony revenue dropped by as much, even if the impact on the base is still limited: the number of fixed phone lines shrunk by just over 10 million during the year, i.e. by just under 1%. The number of broadband connections grew by close to 20% to 415 million at the end of 2008: with an average density of 6.4 broadband connections per 100 inhabitants, this market still has considerable room to grow, especially in emerging economies. In more advanced markets, broadband density is over 30%, i.e. between 70% and 80% of households are already equipped.

Mobile Terminals

Amidst the global economic crisis, the global mobile phone market is facing difficult times and growth that were double digits from 2002, are now experimenting the negative impact of this economic turmoil. With a volume growth stated at 15% in 2007, mobile phone sales should continue to be on the growth in 2008, but at a far lesser extent. IDATE states that volumes have progressed by 5% in 2008 reaching 1200 units sold over the year, a forecast reevaluated to the downside after a negative fourth quarter. If these numbers appear positive taking into account the global crisis and the impact it has on the IT and consumer electronics industry, 2008 was a turning point in the mobile phone industry.

First, the mobile phone market has been historically one of the fastest growing markets with double digits growth per year, since the Internet ‘Bubble burst’ of 2001 and its economic downturn. The fact that this year market growth may be limited to 5% is a sign of general slow down of the industry as consumers are either differing their handset replacement or first purchase.
Second parameter is to be seen in the second half sales of 2008. In the first half of 2008, handset sales were on the same trend as previous years with year on year sales between 13% to 15%. As of 3rd quarter of 2008, sales were down to 7.7% confirming the economic impact of the global crisis; and in the fourth quarter, sales were down by 10% YoY Historically the third quarter has been a ramp-up time for manufacturers to ship phones in preparation for the holiday season and growth have generally been on a 15% to 30% progression year on year. With these low 3rd and 4^th quarter sales figures, market should prepare for low 1^st half in 2009 with a inevitable contraction in mature markets.

Starting in the second half of 2008, the economic slow down should continue in 2009 and increase its impact on mobile phone sales. For 2009 perspective, after IDATE first stated that mobile phone market growth should remain positive between 1 to 4%, market warnings by major handset manufacturers and chipset suppliers, indicated that this year will remain extremely tough for every players of the mobile value chain. Sales should therefore be on the downturn reaching 1130 to 1140 units, a 5 to 6% decrease in volume. Mature markets where sales are driven by replacement should be the most impacted with negative sales in North America, Western Europe and Japan. On a longer term, sales in 2010 should remain low (<6%) but with a renewed interest from users for innovative models. Sales may begin to gain traction again from 2011 depending on the evolution of the current crisis.

About IDATE

Founded in 1977, IDATE is one of Europe’s foremost market analysis and consulting firms, whose mission is to provide assistance in strategic decision-making for its clients in the Telecom, Internet and Media industries, through the following two areas of activity:

Consulting & Research

An independent consultancy - IDATE has established its credibility and independence in conducting consultancy and study assignments on behalf of its clients: market reports (techno-economic monitoring, modelling and forecasts, sector-specific analysis, surveys); international benchmarking (positioning studies, convergence strategies, competition analysis); assistance in the launch of new products (technical Analysis, Competitive Environment, Business planning); public policies (public policy definition and assessment, socio-economic impact, project implementation and management, regulatory benchmarking).
Analysis reports - IDATE’s clients benefit from the knowledge and expertise of its teams of specialists, and from its ongoing investment in its information and strategic monitoring system: publication of reports, databases, online services, analyst hotline…

DigiWorld Programme - IDATE is also instrumental in providing a forum for international debate between the industry’s key players through its annual DigiWorld programme, supported by its members representing the sector’s most prominent companies: DigiWorld Network (a series of monthly meetings in European capitals and international business trips), DigiWorld Events (the DigiWorld Summit annual conference and a series of associated seminars devoted to the year’s central issues), DigiWorld Publishing (the DigiWorld Yearbook and the DigiWorld Economic Journal (Communications & Strategies)

For more information on IDATE’s activities: www.idate.org

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