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BMI View : As the world's largest region by population, Asia's telecoms market presents ample growth prospects for operators. Subsidised data and aff ordable smartphone prices have encouraged users in developing markets to migrate from 2G to 3G/4G networks, creating upselling opportu nities . E nthusiastic take up of advanced telecoms and value-added services in more developed markets will decelerate the speed of ARPU decline. That said, the global slowdown is a notable downside risk to profit growth in the near-term.
|Prepaid To Postpaid Shift A Major Challenge For Operators|
|Selected Markets - Prepaid As % Of Total Mobile Subscriptions, 2015|
|Source: Operators, Regulators, BMI|
Key Forecasts And Developments
We forecast mobile subscriptions to grow 3.2% to 3.87bn in 2016. At 93.1% in 2015, mobile penetration is high, yet far from saturated in less developed telecoms markets. We believe the preference for multi-SIM ownership in large, but relatively less saturated prepaid markets such as Bangladesh, India and Pakistan still present ample potential for organic growth.
Subscriber transition to advanced mobile and wireline broadband networks such as LTE and fibre in more advanced markets, for example Australia, Hong Kong, Japan, Singapore, South Korea and Taiwan, has been strong. Fixed-mobile convergence has gained traction in these markets, sustaining wireline voice and broadband penetration above the 2015 regional averages of 9.9% and 12.0% respectively.
3G/4G subscription growth will slow to 17.5% in 2016, from 40.7% a year earlier, and total 1.88bn by the end of the year. We forecast 3G/4G penetration to rise from 39.7% at the end of 2015 to 56.7% by the end of 2020. The next phase of uptake will come from intermediate markets including China, Malaysia, Myanmar, the Philippines and Vietnam.