In emerging markets, 3G and WiMAX will provide Internet connectivity to many consumers for the first time, partly due to a lack of viable fixed alternatives. Asia-Pacific will generate the highest mobile data revenue throughout the forecast period, and Africa and the Middle East will grow the fastest.
Across the developed regions, North America will experience the fastest growth in mobile data revenue, spurred by the United States, which will rake in the largest revenue from mobile data services, followed by Japan and China. India's mobile data revenue will grow fastest from 2007 to 2012. By 2012, India will have moved ahead of most developed nations to become the fourth largest market for mobile data revenue with more than $14 billion. Other fastest growing markets include Pakistan and Brazil.
Compared with emerging markets, data ARPS (average revenue per subscriber) is five times higher in developed nations, and the difference gets even greater in those markets where operators provide flat-rate data bundles and promote 3G. In emerging markets, the growth of data ARPS will be hindered by an increasing majority of prepaid subscriptions, and pricing for 3G services and handsets. We expect 71 percent of subscriptions in developed markets to use 3G handsets in 2012 compared with only 10 percent in emerging markets. The operators that generate the highest data ARPS are focused on 3G data services and offer flat-rate data bundles; they include Hutchison Whampoa's 3 in several markets including the United Kingdom and Australia as well as Japanese operators NTT DoCoMo and KDDI.
SMS will continue to generate the highest share of global mobile data revenue through 2012 and will make a larger impact in emerging markets. However, SMS revenue as a percentage of mobile data revenue will decline throughout the forecast period, as other data services - made possible by the rollout of next generation networks - gain further traction.
Slower 3G rollouts in emerging markets will likely hold back the growth of non-messaging data services. In 2012, in emerging markets, SMS will still comprise 45 percent of data ARPS in contrast to less than a quarter in developed markets. From 2007 to 2012, we expect the growth rate for SMS revenue in emerging nations to be almost three times as high as that of developed nations.