Gartner Predicts Big Telecom Growth in Emerging Markets

Press Release - 6:10 am on January 4, 2007

Customers in emerging markets now account for more than 50% of the world’s telecom subscriptions, according to a recent study by Gartner, which predicts that 69% of all mobile and fixed-line telephone users will be located in developing markets by the end of 2010.

Although low disposable income and the lack of effective competition have worked against emerging market telecom growth in the past few years, high economic and population growth is setting the stage for bigger growth in the years to come.

“Emerging markets may be under penetrated by communications services, but the hunger for improved connections is strong,” commented Gartner research director, Jouni Forsman. “Compared to disposable income, phone users in developing regions are spending five times more on communications on a ‘per-user-basis’ than their counterparts in developed countries.”

In the next few years, mobile phones are expected to be the biggest driver of growth, with the worldwide number of wireless subscriptions set to reach 1.5 billion by 2010. Gartner expects developing markets to account for around 87% of this impressive increase.

“The rapid expansion of the telecoms industry in these markets is being fuelled by under penetration and the fact that communication-enabled services are crucial for overall development,” Mr. Forsman explained. “This not only relates to telecoms and entertainment services, but to communications-enabled ‘life enhancing’ services such as banking, education and remote health. The high level of disposable income being spent on communications in developing countries today is clear evidence that the telecoms industry is mission critical in the emerging world.”