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Fitch: Global Wireless Growth Slowing, But Still Strong in Many Developing Markets
added: 2008-05-25

In Fitch Ratings' review of 72 operators from 27 different countries, total aggregate wireless subscribers reached 1.681 billion for 2007, representing an annual growth of 17.6%, which is lower than the 2006 annual growth rate of 18.9%.

However, the absolute number of new subscribers increased from 200 million in this study for 2006 to 250 million for 2007. The annual growth rate for individual regions of this study for 2007 consisted of 10% for the United States/Canada, 8% for Western Europe, 22% for Latin America and 23% for Asia/Pacific. Interestingly, Western Europe has experienced a surge in growth compared to the 2006 growth rate of 6%, due to strong growth in Germany and Italy.

The increase in growth is reflective of lower tariff rates and termination charges and more flat rate service plans. Latin America's growth rate has fallen compared to 2006 due to a larger overall subscriber base. However, Asia/Pacific continues a steady march of strong growth due, in part, to exceptional growth in India and Indonesia.

In Fitch's study, prepaid subscribers as a percentage of the total global aggregate subscriber base was 60% in 2007, up from 58% in 2006. Prepaid subscribers grew approximately 19% in 2007 versus a post-paid subscriber annual growth rate of approximately 6%. The strongest prepaid subscriber growth was in Asia/Pacific with a 2007 annual growth of approximately 27%, led by significant growth associated with India and China.

The United States/Canada also experienced strong prepaid growth in 2007 at approximately 23% due to increased sales focus on this underpenetrated market segment in that region. Similarly, Latin America achieved prepaid growth of approximately 22% in a region that is nearly entirely prepaid subscribers. Prepaid penetration is highest in countries with relatively expensive and difficult to acquire fixed line services. Additionally, decreases in tariff rates have spurred prepaid wireless as a substitution for fixed-line services.


Source: www.fitchratings.com

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