At the end of 2006, Asia-Pacific cellular connections passed the 1 billion mark according to Wireless Intelligence. It has been the third fastest-growing region with a 27% increase year-on-year. In mature markets such as Western Europe and North America, market growth is softening. However, Asia-Pacific reached a 30% penetration rate and is expected to grow by 19% between 2006 and 2007.
India overtook China in terms of growth rate in Q1 2007 and will boost the regional figures in the forthcoming quarters running at almost 6 million per month. India grew by 87.4% year-on-year, stealing China's thunder. Six of its 15 local operators are listed in the top 20 fastest growing operators within the region for Q1 2007. This phenomenal growth in India has been driven by efforts from vendors and operators to push down prices and tariffs. This price war and competitive pressure was quoted during the Motorola and Nokia earnings results last quarter.
By late 2006 China's growth rate was running at around 18% quarter-on-quarter. It is still leading the way in terms of total connections, with 443 million compared to India's 142 million, but it will take 15 months to gain the next 51 million connections in China and match the growth we saw in 2006. By the end of 2007 China will reach a 38% penetration rate whereas India will just be on its way to 20% penetration.
Bangladesh, Pakistan, Indonesia
Bangladesh, Pakistan and Indonesia have gained strong momentum over the past few quarters with almost 50 million net additions between 2005 and 2006. According to Wireless Intelligence forecasts they are expected to reach market growth of 45%, 42% and 25% respectively by the end of 2007, bringing a total of 43 million net additions for the year.
In Bangladesh, Grameen Phone is expected to stabilize at around a 50% market share during 2007, losing ground to Banglalink (Orascom), which will more than double its subscriber base by December 2007. Pacific Bangladesh, which deployed its cdmaOne and CDMA2000 1x networks in 2005, is likely to reach 1 million connections by the end of 2007, following fairly slow uptake so far. Overall, Bangladesh should reach 29 million subscribers by December this year, giving a market penetration of 18%.
In Pakistan, Mobilink (Orascom) is likely to stabilize at around a 50% market share through this year, to Telenor's advantage - it is expected to grow by 72% year-on-year. Ufone and Warid are also fast growing operators, growing by more than 45% year-on-year and forecast to take share from Mobilink. Millicom is migrating its TDMA network to CDMA2000 1x, although it represents a tiny portion of the total market. By the end of 2007, Pakistan is expected to reach 63.2 million subscribers, reaching a penetration rate of 37%.
In Indonesia, Telkomsel and Indosat are leading the market with 55% and 23% market shares respectively by the end of this year. Both operators are deploying their WCDMA networks in early 2007. Mobile 8 is gaining momentum quarter-on-quarter to reach 5% of the market with its CDMA2000 1x and CDMA2000 1x EV-DO networks, but we forecast that it will slowly be overtaken by WCDMA take-up. By the end of 2007, Indonesia will reach 78.7 million subscribers, with a penetration rate of 34%.
High-speed technology roll-out
A wave of WCDMA network rollouts is expected in most markets by the end of 2007, overtaking the number of CDMA2000 1x EV-DO networks.
High-speed networks will gain momentum in most markets by the end of 2007. Wireless Intelligence forecast that WCDMA will reach over 75 million connections in Asia-Pacific by the end of 2007, about 29 million more than in 2006. GSM is going to gain over 184 million connections thanks to fast growth in India, China, Indonesia, Pakistan and Bangladesh.