Global quarterly handset shipments slumped by 15.8 per cent year-on-year in the first quarter of 2009, from 290.8 million units to 244.8 million, according to global IT research firm IDC. However, the smartphone market grew by four per cent over this period, largely driven by demand in Western Europe, North America and the Asia Pacific region, and as more operators subsidised high-end handsets in a bid to fuel data revenues.

Market leader Nokia saw its shipments drop to less that 100 million in a first quarter period for the first time in two years

“Some operators in mature markets have shifted product portfolios, and some have smartphones accounting for as much as 50 per cent of the entire handset offering,” stated Ryan Reith, senior research analyst at IDC’s Mobile Phone Tracker. “We believe this strategy will continue, along with an increase in devices that are media and messaging centric, to help operators’ revenues.”

Nokia saw its volumes drop below 100 million units for the first time in two years, a decrease of almost 20 per cent from a year earlier; however it was Motorola and Sony Ericsson that were the hardest hit with their shipments diving by 46.4 per cent and 35 per cent respectively.

IDC attributes Sony Ericsson’s contracting market due to several key markets moving away from mid- and high-tier devices towards low-cost models, where the manufacturer does not currently compete.

Joss Gillett, senior analyst at Wireless Intelligence noted that handset vendors are streamlining their device portfolios to focus on high-end consumer segments to generate higher margins, and on lower-tier devices to maintain volumes and market share. Operating margins have also been negatively impacted by a high-level of product inventories, strong price competition, and a decline in the average selling price (ASP).

“We estimate that the average operating margin at the top five vendors – Nokia, Samsung, Sony Ericsson, Motorola and LG – declined to around four per cent in Q109, down from an average of 13 per cent a year ago,” a Wireless Intelligence report stated.

South Asia are predicted to decline by 50 per cent from current levels to 2013, forecasts a study by global consulting firm Oliver Wyman.

The study showed that while these regions are expected to contribute 44 per cent of new mobile subscriptions through to 2012, increasing competition, price reductions, and a second wave of low-income customers will drive average revenue per user (ARPU) levels from US$12 in sub-Saharan Africa down to US$6, and in India and neighbouring countries from US$6 to US$3.

Operators in sub-Saharan Africa face a number of challenges, including comparatively high per-minute prices, high rates of illiteracy, and several countries with small populations

Obviously, adding more subscribers will generate further economies of scale. But scale alone will not be sufficient to sustain profitability and master the low-ARPU challenge,” said Joerg Hildebrandt, partner at Oliver Wyman in Dubai.

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Expresso Telecom, the international investment arm of Sudanese operator Sudatel, has kept a low profile as it has gone about acquiring greenfield and operational CDMA operators in West Africa in the past few years. As the company prepares for significant investment into its subsidiaries and for a shareholder restructuring programme, chief financial officer and acting CEO Emad Sukker shares with Michelle Mills how the company intends to grow organically, while extending its geographical footprint

Dubai-based Expresso Telecom focuses on operating CDMA mobile networks across West Africa, having acquired Intercellular in Nigeria and Kasapa in Ghana, as well as new licences in Mauritania and Senegal. Chief financial officer and acting CEO Emad Sukker says the company is trying to distinguish itself in the realm of CDMA technology, which Sudatel also uses for its mobile network in Sudan.

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As the telecoms industry weathers turbulent times, this year’s Mobile World Congress focussed on both opportunities and risks for the year ahead. Hot topics included mobile broadband, application stores, the new financial environment, and smart cooperation. Value Partners’ Santino Saguto explains

Santino Saguto, partner and managing director of Value Partners Dubai

More than ever, this year’s Mobile World Congress was an important test of the mood of an industry starting to feel the pinch of the economic downturn. However, despite the general gloom, the mobile industry showed many reasons for optimism. A few chief executives, including Vittorio Colao, CEO of Vodafone, pleaded for government action or a lift of “regulatory activism”, to encourage investment in networks and help the telecoms industry to help pull countries out of recession.

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Last month representatives from the CDMA community in Africa met in Cape Town for their annual stock-taking event, which was focussed on assessing the progress the technology continues to make on the continent. Jay Srage, Qualcomm’s vice president of business development for the Middle East and North Africa, offers his view on the impact wireless technology is having in emerging markets

Qualcomm’s Jay Srage believes mobile computing has opened up an entirely new market segment category full of opportunities for the wireless industry

As borders blur and people become more mobile than ever before, what it means to be mobile has begun to fundamentally change. The wireless industry has not escaped this shift. No longer limited to mobile handsets, wireless connectivity has evolved into a broadband technology with global reach, diversified into new device segments and expanded into new markets that either did not exist before or have never been quite so connected. Connected mobility has become a must-have, and mobile devices are gaining ever-greater personalisation and functionality, blurring the lines between what used to be very distinct market segments.

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