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IN DEPTH: Chinese Growth Dips As India Marches on
China, India, Pakistan, Japan and South Korea are amongst the largest markets in Asia and The Mobile World holds monthly data for all five. At the end of July, the five markets had a combined total of 1.122bn mobile customers, approximately 30% of the global total. Between them they added 140.6m new connections in the first seven months of 2008 alone, and 233.8m were added in the twelve months ending 31st July 2008.
China is the worldÃ's largest market and it has more customers than the other four markets combined. At the end of July there were 591.60m mobile connections in China, and the 600m mark will almost certainly be reached by the end of Q3, if not by the end of August. Net additions stood at 7.64m in July, the lowest figure for 10 months although still 8.1% up on the July 2007 gain. With an average monthly gain of almost 9m in the first six months of 2008, something of a slowdown was perhaps inevitable - if an average of more than 10,000 new connections every hour in July counts as a slowdown. China Mobile was responsible for almost 93% of the monthÃ's net additions, and this excellent performance saw its market share boosted to 71.0% from 69.4% at the end of 2007.
The Indian mobile base may be less than half that of China, but a strong monthly gain in July took its figure for year-to-date net additions above the Chinese figure. India added 61.95m in the first seven months of 2008 compared to 61.16m for China. To give some sense of the scale of these figures, the combined customer base of France and Switzerland at the end of Q2 08 was under 61m. IndiaÃ's July gain of 9.19m was in itself bigger than the entire Swiss mobile market. It was also the second largest monthly gain ever seen in India on an organic basis, behind the 9.90m recorded in March. In total, there were 291.57m Indian mobile customers at the end of July. Bharti is the market leader in India with 72.08m customers, only just short of the 72.88m recorded by the worldÃ's third largest network by customer numbers, AT&T, at the end of Q2 08. BhartiÃ's end-July market share of 24.7% was up 1.1pp year on year and was its highest figure for over five years.
Pakistan finished July with 89.33m customers, up 12.44m since the end of 2007. With penetration surpassing 50% during Q2 to end the quarter on 51.0%, growth has slowed substantially in recent months. July net additions amounted to 1.28m, the lowest figure since November 2005, while on a proportionate basis monthly growth stood at 1.4%, compared to 3.9% in July 2007. As in India, there is a clear market leader - Orascom subsidiary Mobilink, which had 32.06m customers and 35.9% market share at the end of July. Although its share dropped 3.9pp in 2008, it remained almost 13.7m customers ahead of nearest rival Ufone, which retook second place from Telenor in July by fewer than 40k customers.
The declining growth rate in Pakistan means that Japan should hold on to its fourth place in the Asian rankings for a little longer, having lost its third place to Indonesia in Q2. At the end of July there were 104.04m mobile customers in Japan, a monthly gain of 0.39m or 0.4%. NTT DoCoMo is the dominant operator here with 53.68m customers and 51.6% market share at the end of July, although having lost 1.3pp of market share since the end of 2007, it looks set to dip below 50% in 2009. The rise of third operator Softbank is the key to this decline: July was the fifteenth successive month in which Softbank topped the market for net additions, adding 0.22 to take its total customer base to 19.33m and its market share to 18.6%, up 1.1pp in the year to date.
The market shares of the three operators in South Korea are similar to those of the three major operators in Japan, although competition here is minimal. As in Japan, monthly growth in South Korea is well below 1%. At the end of July the total customer base was 45.05m with a proportionate monthly gain of 0.2%, equivalent to just 68.4k in real terms. This was, however, slightly above the 59.1k recorded in July 2007. Nevertheless, in a highly stratified market where penetration is over 90%, the potential for organic growth seems limited.
In contrast to total market growth, the South Korean 3G market is burgeoning. July saw a gain of 8.0%, taking the total base to 13.50m, while year-to-date growth stood at 129.2%. W-CDMA customers accounted for 30% of the total at the end of July. If Japan is anything to go by, this proportion could double; there, W-CDMA dominates with 59.4% of the total at the end of July. In China, India and Pakistan, on the other hand, 2G GSM reigns supreme, with 92.8%, 75.2% and 98.2% of the end-July totals respectively.
Posted to the site on 28th August 2008
This article was extracted from The Mobile World Briefing, the weekly newsletter from The Mobile World.
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