Mobile phone connections are forecast to triple

Revenue will “probably grow 20 percent to 30 percent in the same time,” Ameet Shah, a consultant for PRTM, said from London in a telephone interview. The current revenue figure is about US$900 billion, according to researcher The Mobile World.

Operators must change their operating models and may need to merge to survive, Shah said. Instead of concentrating on “high value, high price and low volume” they must focus on “immense scale, low value and low prices,” he said.

Growth was helped by improved networks, which now cover between 80 percent and 90 percent of world's population; cheap handsets in the developing world; and new devices such as Apple Inc.'s iPad computer, Shah said. There were 168 million net additional connections in the first quarter, and probably a higher number in the second, PRTM said. China and India added 50 million in April and May alone.

“While certain markets have slowed materially as penetration levels have reached up to 150 percent to 200 percent” relative to their populations, “China has put in solid performance and India has gone absolutely ballistic,” said John Tysoe, a founder of The Mobile World.

Tysoe said the iPad could cause a “second wave” of mobile connections, this time for non-voice applications.

The number of mobile connections may triple in the next six years, as it did from 2004 to now, Shah said.

Operators have to work on their customer relationships and develop new and innovative ways to price and bundle services, rather than come up with new services, Shah said.

“They will have to do the battle on the core network business and reduce their costs,” Shah said. They need to make sure customers are connected everywhere and as they seek scale he predicted there will be more mergers and consolidation.

“It's hard to justify more than two or three independent operators per market because of the costs,” Shah said.

“On the measure of reach,” mobile communications “may be the single most powerful innovation of the 20th century,” PRTM, said. Fixed phones, personal computers, the Internet and broadband “don't even make it to half the world's population,” Shah said. The global population is about seven billion, according to the U.S. Census Bureau.

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