Emerging markets and mobile data will drive global telecoms revenue up to $1.7 trillion (£1.1 trillion) by 2017, according to the latest study from Analysys Mason.

But the firm says that while some bright spots for growth in telecoms revenue are emerging from the gloom of the global economic crisis, there is no question that service providers will struggle to drive growth in traditional revenue streams in the next few years. Looking to new strategies and new business models is critical to survival and growth.

Telecoms is still a growth industry in most regions of the world, particularly for the mobile sector, and assessing market perspectives and quantifying growth opportunities will be critical to carving out a piece of the revenue growth over the next five years, the company says. It identifies China, India and Brazil as the territories presenting the greatest growth opportunities.

According to Analysys Mason’s forecast report, Global telecoms market: trends and forecasts 2013–2017, the global market for telecoms services generated retail revenue of $1.54 trillion in 2012, of which around two-thirds was from developed markets – N. America, Western Europe, Central and Eastern Europe and Developed Asia–Pacific – and around one-third came from emerging markets – Emerging Asia–Pacific, Latin America, Middle East and N. Africa, and Sub-Saharan Africa. The US was the largest market ($378bn), followed by China ($151bn), Japan ($133bn), Brazil ($61bn) and Germany ($53bn).

Analysys Mason’s forecasts that telecoms retail revenue worldwide will grow at a 1.7 per cent compound annual growth rate (CAGR) during 2012–2017, with growth in mobile (3.2 per cent) more than offsetting a decline in fixed (–0.6 per cent).

Mobile handset data and fixed and mobile broadband will be the most important revenue growth areas, the company believes, driven by higher data usage and increased penetration of smartphones and broadband services. However, it forecasts that mobile voice revenue will grow in emerging markets because many countries still have unserved customers.

Revenue in emerging markets will grow at a CAGR of 5.3 per cent during 2012–2017, which will more than offset the decline in Western Europe (–1.3 per cent), while revenue will be nearly stable in Central and Eastern Europe (–0.2 per cent), Developed Asia–Pacific (–0.3 per cent) and N. America (+0.2 per cent).
Around two-thirds of global revenue growth will come from Emerging Asia–Pacific, and around 20 per cent from Latin America (see Figure 1). Three countries will account for about 60 per cent of global revenue growth – China (40 per cent), India (12 per cent) and Brazil (8 per cent).

In developed markets, the revenue mix is changing in line with the evolution of consumer behaviour, and the greatest growth opportunity will come from mobile handset data. Analysis Mason forecasts that smartphones will account for around 84 per cent of total mobile handsets in Developed Asia–Pacific in 2017, and about 75 per cent in N. America and Western Europe. In the enterprise segment, M2M and cloud are gaining momentum but their market share of total retail revenue is still small compared with core services.

In emerging markets, telecoms operators will continue to benefit from the growth of mobile penetration and rising GDP per capita that will increase telecoms service spending in all four regions. Improved mobile connectivity will also stimulate usage of data services, but mobile voice will remain predominant (45 per cent share of total retail revenue in 2017) because fixed infrastructure will continue to be poor. Emerging Asia–Pacific will overtake Western Europe by 2017, becoming the second-largest region in terms of retail revenue after NA.

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