Report: China on cusp of mobile data revenue boom

China is set for a wireless data boom, according to research firm iSuppli Corp., which predicts the country’s revenues surged nearly 19% in 2009 and are set to double from 2008 to 2013.
The firm said it expects the data revenue from both messaging and non-messaging services will rise from $16.3 billion in 2008 to $19.3 billion in 2009 and to $31.5 billion by 2013. Non-messaging revenues are predicted to exceed messaging revenue as carriers expand mainstream adoption of 3G services, with iSuppli forecasting non-messaging service revenue will grow from $6.8 billion in 2008 to $20 billion in 2013.
“The rapid growth of China’s data services is being enabled by the monumental spending of the nation’s wireless carriers on mobile infrastructure equipment,” said Will Kong, an analyst covering China research at iSuppli. “The carriers this year will spend about $6.3 billion on mobile infrastructure equipment, up 28% from 2008. This will represent a near-term peak, with spending in 2010 declining by 2.4% to $6.1 billion. During the next five years, carrier spending will continue to decline but will remain at a high level of more than $5.5 billion annually.”
As for the carriers competing in the space, iSuppli said it expects China Mobile will begin to see its subscriber growth rate decline as China Telecom and China Unicom place greater competitive pressure on China Mobile, especially in non-messaging services, by leveraging their network and handset advantages. China Mobile is currently the world’s largest carrier with more than 500 million customers.
iSuppli said it expects China Telecom’s mobile subscriber base to exceed 100 million customers and China Unicom’s to surpass 200 million customers in 2013, but that China Mobile’s incremental market share will be stable at around 60% for the next few years.
Bolstering that growth are aggressive handset policies that iSuppli said is of concern to financial investors, but one that iSuppli said is sustainable through well funded parent companies.
“Because of these factors, iSuppli remains optimistic about the future development of China Unicom and China Telecom,” the firm added.