NEWS: Mobile communications still a bright spot

MANY industries are bracing themselves for the negative impact of the current global economic downturn, but one segment is expected to do better than others – mobile communications.

Cited by ICT market analyst IDC as the dominant driver of the global telecommunications industry as of end of last

year, the US$700 billion

(RM2.5 trillion) mobile industry now serves almost half of the world’s population with

3.6 billion subscriptions.

Fuelled by social and technological transformation as well as fashion trends and consumer preferences, industry segments such as mobile devices, applications and services are likely to only grow over time, taking the current economic downturn in their stride.

For many mobile device users, no matter how cash-strapped they are, they will upgrade to more sophisticated gadgets so they can remain connected through voice, video or data, no matter where they are. After all, being able to communicate is important at work as well as in the

social aspects.

And those who are not yet communicating in the mobile mode are not shy to fork out money to have that ability given the opportunity.

With this in mind, IDC has forecast the number of global mobile voice connections to reach 4.57 billion by end of 2012 – an average compound growth rate of 8.3 per cent per year.

But it is only fair to subscribers that the growth be matched by the mobile network operators’ ability to cater to the increasing demands from subscribers and to rapidly implement new business models and revenue streams that leverage on information services and multimedia applications.

In Malaysia, where the mobile penetration rate stands at about 94 per cent, IDC anticipates that the compound annual growth rate for total mobile subscribers to grow by four per cent from 2008 to 2012 with prepaid users continuing to dominate the mobile subscriber market.

In a market that has seen significant growth in the number of complaints about quality of service parallel to the growth of the mobile communications’ penetration rate in the country, the issues are similar. There needs to be a focus on offering voice and data bundling for prepaid and postpaid subscriptions to increase revenue and encourage data usage among mobile subscribers. And the services cannot be based on best effort.

Already many mobile users are sceptical of using mobile data services because of the perception that they are expensive and erratic in quality. By investing further in infrastructure and targeting the packages at the right consumer segment, a win-win situation could be created for the operator and consumer.

It is good to see that mobile operators will continue to invest in their infrastructure this year, particularly in 3G network expansion and infrastructure upgrades.

This, as a vendor pointed out, is a natural progress as the stages that operators go through starts from network coverage to capacity to other areas such as quality of service and innovation in offerings.

Since the second half of 2007, subscribers have been moving from 2G to 3G services. So, it is important for 3G mobile operators to provide coverage in new areas to increase their subscriber base. This is also an opportunity for mobile operators to put pressure on vendors to provide cheaper network equipment given the economic situation. Falling prices of 3G mobile phones also should encourage more subscriptions.

Looks like the mobile industry will continue to flourish. But growth should not be motivated solely by business gains, but also with the subscribers’ interest in mind.