In 2006, the telecom operation industry grew steadily. Revenue for the whole year reached $1.4323 trillion, up by 6.2% over 2005.
In summary, the telecom operation industry showed the following features in 2006:
- Mobile communications services grew fast. In 2006, the world's mobile communications users topped 2.5 billion, up by 26.3% over 2005. Mobile communications drove up the fast growth of the global telecom market.
- Voice services were the main contributor to telecom operating revenues. However, there was a gradual drop in its percentage share in the total telecom revenues. Voice services entered a stage of saturation, with the growth slowing down. Despite of this continuous trend, voice services remained the dominant sector in the mobile communications market.
- Commercial use of 3G gathered pace. Preliminary successes in 3G services development have been made so far, and the network building gathered pace. In 2006, the number of 3G mobile phone users in the world topped 100 million, far exceeding the growth of GSM users during the same period.
- Operators entered a stage of in-depth transformation. To adapt to market competitions under a trend of network integration, telecom operators have entered a stage of in-depth transformation and fully penetrated into the industry chain.
- There were frequent M&As between operators. To lower operating costs, telecom operators have become integrated services providers through M&As. Another driving force for M&As is the profit appeals of new markets.
Current status of the communications equipment manufacturing industry
After experiencing the Asian Financial Crisis and global economic recession, the world communications equipment manufacturing industry started to recover in 2003, and has been growing ever since. In 2006, production value in the industry reached $361.8 billion, up by 7.7% over 2005.
The communications equipment manufacturing industry showed the following features in 2006:
- The percentage of wireless communications products continued to rise. With the development of technology and telecom services, there is a growing demand for communications services. This is also the case of wireless communication products, which have seen a notable rise in their percentage.
- Mobile terminals became a flashing point of profits. The continuous fast growth of mobile communications users has made the mobile phone-dominated terminals market active. Terminal making has become a flashing point in the industry.
- Product manufacturing shifted to China, India and Eastern Europe. Under global economic globalization, communications equipment manufacturing is shifting to China, India and Eastern Europe, with China as the most important region for industry transfer.
Development trend of the global communications industry
The communications industry is a strategic and pillar industry of all economies. Most countries are developing towards an information society with communications industry and IT applications as the backbone, hence as a strategically important industry, there are plenty of new development opportunities and a bigger room for growth. This is particularly true of the mobile communications industry. Currently, the mobile phone penetration rate in the world is under 50%, while new markets have huge potentials. Mobile communications will continue to keep the world telecom market in a growth momentum.
In the next 5 years, the global communications industry is anticipated to grow at a rate of around 6.5%, with the following trends:
- Mobile communications will be a driving force of the global communications industry. As the global economy maintains its growth momentum, the global communications industry will continue to maintain a stable growth in the next 5 years.
- Voice services will continue to be the main source of telecom operation revenues. In the telecom operation industry, voice as the basic telecom services will continue to contribute most of the telecom operation revenues. Particularly in the new markets, meeting the need for basic voice services is still the primary task.
- 3G applications will reach a peak. In different countries, the telecom market is at different stages, with 2G reaching a certain user penetration rate. This is particularly true in developed regions.
However, there has been a gradual drop in the ARPU value's reliance on voice. The new market space has shrunk. Under such a situation, operators need to develop new telecom products and services. 3G applications stem as the significant choice for most operators. Through several years of exploratory efforts, 3G has basically matured. 3G will enter a peak period of promotion and application.
- Telecom operators worldwide will speed up their penetration into all markets. As their transformation deepens, operators will not be content with their status as the telecom services carrier. In fact, their position in the whole communications industry chain determines that they will fully penetrate into the whole industry in an attempt to dominate in the chain. One important measure for them is to transform into integrated services providers. Through such means as M&As, they will offer various telecom services such as fixed phone, mobile phone and broadband access. Meanwhile, they will cooperate with CPs and application developers, or they become CPs and application developers. Another important measure is to get involved in the manufacturing of communications equipment, particularly terminal products. Through terminal customization, operators solidify services into terminals and thus strengthen user control.
- Mobile terminals will continue to be a flashing point of profit in the communications equipment manufacturing industry. The rapid growth of mobile users worldwide provides a big market for mobile terminals, particularly mobile phones. Mobile terminals will continue to perform strongly.
- The industry will continue the shift to developing countries such as China and India. India will be another key region following China, for the industrial transfer. Adapting to the world trend of globalization and IT applications, East Asia will transform its industrial structure along the hi-tech direction. For the first, its industrial structure will come into line with the world development trend. After completing their capital accumulation, OEM enterprises will start to penetrate to the high end in the industry chain. In the whole region, a complicated industry system will emerge in which vertical and horizontal division of work coexists.
