Page 22 - vodafone

20 Vodafone Group Plc
Annual Report 2013

Industry trends

Where the

industry is now

The mobile industry is a large and important sector

with around six and a half billion connections across the
globe – in other words, most of the world’s population
use mobile phones. The number of mobile phone users
has doubled in the last ive years, driven by an increasing
range of smartphones for using mobile data, increasing
demand for mobile services in emerging markets and
lower prices.

Scale Competition Mobile phone users
The mobile industry is a large and important The industry is highly competitive, with many
sector with around six and a half billion alternative providers, giving customers a wide 2007 3.4bn
connections, generating over US$960 billion choice of supplier. In each country there are
of annual service revenue every year. typically at least four main mobile network 2011 6.0bn
The majority of revenue, some 75%, comes operators, such as Vodafone, and one national
from traditional services such as calls and texts ixed line operator. In addition, there can 2012 6.5bn
(on average, around 17 billion mobile phone be numerous mobile virtual network operators
calls are made each day). However, over the (‘MVNOs’) – suppliers that rent capacity Mobile phone users by market 2012
last few years the demand for data services, from mobile operators to on-sell to their
such as mobile internet browsing and email customers. In some countries there can also China: 17% Europe: 17%
on a smartphone, has accelerated, and today be several independent mobile retailers that
25% of industry revenue is from data. may compete with mobile network operators’ US: 5%
own stores. Advances in technology have also Other
Growth led to internet based companies and software India: 14% devel- 1
oped : 5%
The demand for mobile services continues providers offering alternative communication
to grow. In the last ive years the number services such as voice over internet protocol Latin
America: 11%
of users has increased by an average of 14% (‘VoIP’). Other Asia: 15%
each year driven by rising living standards, Africa: 11% Other: 5%
population growth and cheaper mobile Regulation 1 Japan, Canada, Australia, New Zealand, Hong Kong, Singapore,
services and handsets. In 2012 93% of the The mobile industry is very heavily regulated South Korea, Taiwan
world’s population had a mobile phone, by national, regional and international Note: Figures are not comparable with prior year disclosure due
to new data source
whereas ten years ago this was only 18%. Most authorities. Regulators continue to lower the
of the growth in users has been from emerging cost for consumers of using mobile services Mobile penetration December 2012
markets, such as China, India and Africa. by setting lower mobile termination rates
As a result around 73% of mobile phone users (the fees mobile companies charge for calls Europe 137%
now come from emerging markets compared received from other companies’ networks)
to 60% in 2007. and to limit the amount that operators can US 110%
charge for mobile roaming services. These
Emerging vs. mature markets two areas represent 13% of service revenue Turkey 91%
Around 70% of mobile users are in emerging for Vodafone. India 69%
markets, relecting the combination of large In an environment of intense competition
populations and less ixed line infrastructure. and signiicant regulatory pressures, industry China 81%
The remaining users are from wealthier voice prices have tended to reduce over time
mature markets, such as Europe and the US. – and in 2012 fell 12%. However, with more
1
In mature markets, most people have a mobile mobile phone users and some customers
device, relected in mobile penetration rates using their devices ever more frequently,
of around 125%, compared to around 90% global industry revenue remains on a positive
in emerging markets. trend and expanded 4% in 2012 1 . Notes:
The industry data on pages 20 and 21 is sourced from
Strategy Analytics.
1 Refers to calendar year.