Asian mobile market hit hard by crunch

Asian market hit hard by crunch

The Asia Pacific mobile industry has been hit hard by the economic slowdown, with the number of new mobile subscribers singed up over the traditionally strong Christmas quarter falling almost 20 million on the previous, and typically slower, quarter.

Research released by analyst house Informa Telecoms & Media shows that mobile net additions in the Asia Pacific region declined 22.6 per cent from 87.69 million in the third quarter of 2008 to just 67.91 million in the fourth quarter.

The analyst notes that the last Christmas reversal came in 2002 when net adds fell 5.9 per cent from 26.75 million in the third quarter of 2002 to 25.17 million in the fourth quarter of the same year.

“Economic woes, subscriber base clean ups in China, Bangladesh and Pakistan, as well as less competition in Indonesia contributed to the uncharacteristic fall in net additions,” said Nicole McCormick, senior analyst at Informa.

China alone accounted for more than half of the region’s total decline in net adds, falling 56.65 per cent from 23.39 million in the third quarter, 2008, to just 10.14 million in the following period.

However, the blip in China appears to be a one off, as China Telecom culled 13.3 million inactive subscriptions in the month of October alone after taking control of China’s Unicom’s CDMA business as part of the country’s restructuring plan.

Operators in Pakistan and Bangladesh also fared badly, with net adds decreasing by 112.4 per cent and 26.2 per cent respectively in the fourth quarter compared with the third quarter. In both countries mobile growth was impacted by the crackdown on unregistered SIM cards as well as economic factors.

Pakistan recorded a net loss of almost 300,000 subscribers, compared with almost 6 million net adds in the second quarter and 2.18 million net adds in the third. Indonesia also took a hit in terms of growth, with net adds falling from 14 million in the second quarter to 13.15 million in the following period, before more than halving to 6.36 million in the fourth quarter.

And Informa warns that Asia’s worsening economic conditions spell particularly bad news for countries such as China, India and Pakistan, and even Thailand, Indonesia and the Philippines in the future, as these countries are now focusing on rural communities to drive growth.

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