According to the report, China will also outpace the other 19 markets in terms of broadband growth, accounting for more than one-third of the 350 million-plus new broadband subscriptions anticipated over the next five years. By 2011, China, with broadband revenues of more than US$19 billion and four times the subscribers, will surpass Japan as the world's second-largest broadband market. However, the United States will continue to maintain its position as the world's largest mobile and broadband market by revenues over the forecast period.
"The bulk of the revenues for the sector will still come from the developed markets. Another notable conclusion is that the so-called death of the landline has been overstated, even if traditional landline revenues will take a massive hit," stated Julian Watson, director of Global Insight Telecom Products and author of the Special Report, "Substitution Shakes Up the Telecoms Sector."
More than US$50 billion in revenues will be lost world-wide over the forecast period due to fixed-line subscriber declines and the migration of voice traffic to mobile and VoIP (Voice over Internet Protocol) networks. A 4.5% decline is predicted in traditional fixed-line accesses as the growth in the China and India markets fail to offset the erosion of traditional accesses in markets like Japan, South Korea, and Europe; the latter of which has already seen extensive migration of accesses from fixed lines to mobile.
"Primarily as a result of substitution, the next five years will see a fundamental shift in the revenue make-up of the global telecoms industry. In these 20 markets, fixed-line's share of total telecoms revenues will collectively fall from 39% in 2006 to 21% in 2011; while by the end of 2011, mobile will account for over two-thirds of total telecoms revenues in those markets," Watson said. "But as our research shows, disparate local regulatory, competitive, and economic conditions will mean that the pace of substitution will vary greatly across the 20 markets. Traditional telcos are seeking to offset or reduce substitution effects by moving into multimedia and convergent markets such as IP TV (Internet Protocol Television) and Fixed-to-Mobile Convergence (FMC), but this will not always be sufficient to protect and enhance their revenues," he concluded.
