Despite price drops among commodity wholesale services, overall wholesale service revenues are expected to climb for the next several years, according to new research from Ovum. Not surprisingly, the Asian market will lead the way, the market research firm says, driving the total wholesale services market to $142 billion by 2019.
Ovum says it based its assessment, contained in the report "Wholesale revenues forecast to grow in all regions," on an analysis of the financial results of more than 200 telecoms service providers. It foresees the share of wholesale services among overall telecom revenues growing to 6.6% by 2019, up from 5.5% in 2012.
Thanks in large part to strong retail competition in many Asian countries as well as increasing international traffic, Ovum expects Asia to experience the greatest amount of growth. The market research and consultancy firm points to an increase in wholesale offerings in countries such as Malaysia and South Korea, as well as wholesale revenue growth in China due to the recent licensing of 19 mobile virtual network operators (MVNOs), as contributing factors as well. As a result of this growth, the Asia-Pacific region’s share of global wholesale revenues should climb from 17.% in 2012 to 26.0% in 2019.
"The rapid rate of retail service innovation, the growth of voice and data traffic volumes, and the increasing complexity of retail services all depend on an efficient and effective wholesale market because few (if any) retail service providers can do everything themselves," explains David James, practice leader for Ovum’s wholesale research channel and author of the report. "New types of service provider are emerging, but their need for connectivity will stimulate greater demand for traditional wholesale services, while those telcos that do innovate at a retail service level will create demand from those that don't."
The largest service providers will benefit most from wholesale growth, Ovum expects. In 2012 the five largest wholesalers earned more than a third of total global wholesale revenues, and the top 10 earned more than half of the total. However, the shift towards Asia will shuffle the standings among the top providers, Ovum expects. North American and European service providers dominated the list of the top 20 wholesalers in 2012, with only three based in Asia-Pacific, one in the Middle East and Africa region, and none from South and Central America. "We expect at least one Chinese carrier to be among the top 20 wholesalers by revenues in 2019, although North America and Europe will continue to dominate the list," James concluded.
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