BRIC markets driving global mobile growth - New study predicts US$1.1 trillion in global operator revenues by 2012, driven by developing markets

Mobile operators in the BRIC countries - Brazil, Russia, India and China - are accounting for a rapidly growing share of global mobile revenue, and are on track to overtake the US in market size (revenue) by 2012. According to a new GSMA Intelligence study, The Global Cellular Industry Balance Sheet, BRIC operators have recorded the strongest revenue growth in recent years, generating total revenues of US$170 billion in 2010, an increase of US$30 billion since 2008. BRIC operators are expected to exceed US$200 billion in revenues in 2012.

The study forecasts that the total revenues generated by mobile operators worldwide will cross the US$1.1 trillion mark in 2012. Developing markets will be the primary engine of growth, contributing over 40 percent of global revenues by this point - up from 33 percent four years ago. Global operator revenues reached US$1.057 trillion in 2010, the study says, with operators investing around US$200 billion in capital expenditure (capex) during the year.

"These trends emphasise the critical role developing economies are playing in balancing the high level of maturity seen in most developed economies, which has effectively led to stalled revenue growth," said GSMA Intelligence Senior Analyst and report author Joss Gillet. "Mobile revenue growth in the developing world is, in turn, fuelled by operators' expansion in Brazil, Russia, India and China, as well as by demand in fast-growing Asian economies."

Mobile revenue growth in the developed world has remained flat at around 2 percent a year since 2009, the report says, with as many as 40 percent of operators in developed markets reporting revenue declines last year. The worst hit operators are located in Western Europe (Greece, Ireland, Portugal, Spain), Eastern Europe (Czech Republic, Hungary) and mature Middle Eastern markets (Bahrain, UAE). Among the large operator groups, those with a large 'developing' footprint - such as America Movil and Telefonica - recorded the strongest revenue growth in 2010, according to the report.

"During the worst of the recession, mobile operators in developed markets were forced to squeeze capital expenditures to preserve cash flows, but as the global economic turmoil has subsided, we have seen a revival in network investments in 2010," said Gillet. "Further network investment is also required in the developing world if operators in these markets intend to fully realise the potential of mobile broadband.

Voice service revenue still accounted for 75 percent of recurring revenues on average in developing countries in 2010, and 70 percent in developed countries, the report found. Meanwhile, data revenues (excluding messaging) represented 16 percent of total revenue on average in the developed region in 2010, compared to 11 percent in the developing region. In 2012, GSMA Intelligence predicts that over one third of total revenues globally will come from non-voice services while data-only services will represent close to 20 percent of total revenue.

Total global cellular revenue (US$ billion)
Source: GSMA Intelligence