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China, India to drive global mobile industry

The two Asian giants will account for nearly half of all new mobile subscribers worldwide by the end of the decade, according to a new study by GSMA

In remote parts of India, where the national healthcare system is out of reach, mothers rely on their mobile phones to get reminders on vaccinations for their children.

And in cities all over China, small business owners and consumers use WeChat in nearly all aspects of urban life, from buying and selling goods to ordering food at restaurants.

Yet the use of mobile phones in the two Asian giants, while seemingly pervasive today, is just the start of things to come.

By the end of the decade, China and India will make up nearly half of all new mobile subscribers worldwide, according to a new study by the GSM Association (GSMA).

India will account for 27% (206 million) and China 21% (155 million) of about 753 million new mobile subscribers expected to be added globally by the end of 2020.

The Asia-Pacific (APAC) region as a whole is expected to see an increase from 2.7 billion mobile subscribers at the end of 2016 to 3.1 billion in 2020, accounting for two-thirds of global growth.

Consequently, mobile penetration in APAC will grow from 66% in 2016 to 75% in 2020. But the region’s diverse nature means mobile penetration rates will still vary widely, from the most penetrated markets of Hong Kong, Japan, Singapore and Taiwan, to the least penetrated, such as North Korea.

“Led by India and China, Asia’s mobile industry will be the main engine of global subscriber growth for the remainder of the decade, connecting almost half a billion new customers across the region by 2020,” said Mats Granryd, director general of the GSMA.

“We are also seeing a dramatic shift to mobile broadband networks, particularly 4G, which is providing a platform for a rich range of innovative services across both developed and emerging markets in the region. Meanwhile, advanced operators in Asia are set to become among the first in the world to launch commercial 5G networks before the end of the decade.”

Asia leads 5G charge

According to the GSMA study, mobile broadband now dominates internet connectivity in the APAC region, accounting for more than half of connections for the first time in 2016.

That said, the region is not standing still. Technology powerhouses Japan, South Korea and China are already driving the development of 5G technologies.  

For example, China Mobile will conduct 5G field trials later this year, and Korea Telecom is expected to roll out a 5G network to support the 2018 Winter Olympics in Pyeongchang.

By 2025, 5G connections – excluding those that connect internet of things (IoT) devices – are forecast to reach 670 million, accounting for just under 60% of global 5G connections.

APAC’s position as the world’s growth engine is likely to be bolstered further by the growing adoption of mobile services, which contributed $1.3tn to the APAC economy in 2016, or 5.2% of regional gross domestic product (GDP).

According to the GSMA, this contribution will grow to $1.6tn (5.4% of GDP) in 2020 as countries benefit from the improvements in productivity and efficiency brought about by increased take-up of mobile services, including machine-to-machine connectivity.

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Asia’s mobile industry is also playing a key role in tackling various social and economic challenges, as outlined by the United Nations’ sustainable development goals in areas such as healthcare, education, gender equality and employment.  

For example, Philips has partnered Sijunjung Regency in Sumatra, Indonesia to develop a digital health service that helps to identify mothers-to-be who are at high risk of pregnancy-related complications and reduce maternal mortality rates.

To fully harness the potential of mobile services, Granryd urged governments and policymakers to collaborate with the mobile industry to develop robust and progressive digital ecosystems, supported by forward-looking regulatory frameworks.

The GSMA said in its study report that although mergers between mobile operators continue to be closely scrutinised, the same level of attention does not appear to be given to their competitors in the digital economy.

“A number of countries have experienced a reduction in the number of network operators from four to three players, but in some countries merger proposals have been blocked by competition authorities or approved on the condition that the market retain four players,” it said.

“The evaluation of mergers in Asia (particularly in developing economies) can lead to uncertain outcomes when the jurisdiction of the competition authority, the regulator and the government is not clearly delineated.”

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