Axis Capital Group Review: Drivers of Growth in Mobile Industry

by Gabriel N. Mr.

Mobile communication has grown since the start of the 21st century. In 2002, the increasing number of calls through mobile phones has surpassed that of being made through telephones. This had marked a change of history.

Ever since the late 1900s and 20th century, mobile phones are considered only as an extra option, an accessory for those who can afford it. The target market is only comprised of businessmen. With the subsidization of handsets, the lowering of tariffs and the introduction of prepaid models; mobile phones have found its way to the mass market. Today, mobile phones are even sold in kiosks and small stalls. It has even become too famous that fraudsters are even making decoys and fake copies of it.

Services have also been varied depending on the demand of market subscriptions. Leading telecommunication networks are already competing on what promotion to offer. One concrete example is the startling head to head contention among the Big Three in the Indonesian archipelago. Indosat, Telkomsel and XL Axiata Group have been watching each other’s tail and are almost copying each other just to be the first to promote a new service. As a result, the country has become one of the largest mobile markets in the world with mobile phones’ population almost a double than that of the people. Jakarta, the country’s capital became the largest SMS cellular community.

In the aggressiveness of mobile operators nowadays, there are key drivers to the increasing demand in the market lifecycle. They are changing as the market is maturing. Saturation levels are getting closer as each of these inhibitors is interplayed:

1. Interconnection and pricing models

Prices for calls have improved for the last decade. They have become affordable and convenient to use and for many applications, it is free for local calls. Mobile phones have soared in number since it is easier, more convenient and more practical.

2. Prepaid Models

One of the biggest drivers is the introduction of prepaid subscription. Prepaid mobile attracts young people with low budgets, students and parents who would want to control their children’s mobile expenses. Those who would want mobile phone security is also taking advantage of prepaid models.

3. Competition

In the mobile market arena, the number of competing players has been growing. They compete on having the best promotion, cutting their prices and offering more practical services. Competition has fostered diffusion of mobile communications and has driven to larger market.