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Despite the lingering economic woes, the global telecom industry has maintained an upbeat momentum this year thanks to service providers who are consistently delivering healthy growth. This trend is expected to continue going forward. A substantial portion of this industry is dominated by Asia-Pacific, trailing U.S. and Europe.

According to the latest report from Analysys Mason, telecom service revenue in Asia-Pacific region would climb to $323.7 billion in 2016 from $229.7 billion in 2011. This growth entirely depends on the wireless and mobile broadband services, the two powerful growth drivers of the industry. Rolling out of 3G and 4G services, growing demand for Internet access and improving broadband coverage and connectivity would continue to boost revenue in the region.

As customers are rapidly moving from fixed-line to wireless, it is expected that mobile voice connections will reach 90% by 2016, up from 84% in 2011 and 73% in 2008. As a result, the number of total voice connections in the Asia-Pacific region would increase by 45% to 3.9 billion. Majority of the growth will come from the leading telecom operator in China, such as China Telecom Corp. (CHA - Snapshot Report), China Unicom (CHU - Analyst Report) and China Mobile (CHL - Snapshot Report), and in India, such as Vodafone Plc (VOD - Analyst Report) India and Tata Communications Limited .

The overall active mobile penetration rates would reach to 95% by 2016, up 32% from 2011 levels. The number of active SIMs will increase to 3.7 billion in the same period from 2.33 billion in 2011. However, the monthly average revenue per user (ARPU) would continue to decline over the next five years albeit at a slower pace to $6.50, compared to $7.40 in 2011 and $10.00 in 2008.

Together, China and India accounts for nearly 68% of the Asia-Pacific region’s population and 75% of the total telecom revenue. Notably, China will lead other countries by generating the greatest chunk of the revenue growth. About 60% of the revenue ($138 billion) in the region is tilted toward China. Other markets like Bangladesh, Indonesia, Malaysia, Pakistan and Thailand will contribute the rest 25% of the total revenue.

Coming to 4G LTE, which is considered the standard technology for the operators across the world, it will have a minimal impact on the growing Asia-Pacific economies owing to capacity constraints, lack of affordable devices and the timing of LTE spectrum auctions. The LTE penetration would be slightly higher in Malaysia and China at 8% and 7% respectively. India, Indonesia, and Thailand would see lower LTE growth of 3% by 2016, while Bangladesh and Pakistan will experience even lower growth.

China Telecom, China Unicom and China Mobile currently hold Zacks #1 (Strong Buy), #3 (Hold) and # 4 (Sell) Ranks, respectively. Vodafone retains Zacks #3 (Hold) Rank.

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