Global SIM card market faces turbulence due to China

A staff member poses with a mock oversized Vodafone Secure SIM card at the Vodafone booth at the CeBit computer fair in Hanover, March, 5, 2012. REUTERS/Fabrizio Bensch/Files
Guidelines on mandatory SIM card registration in China will cause turbulence in both the Chinese and global telecom markets, said ABI Research.

“The Chinese SIM card market will experience an unsettling period from late 2016 up to early 2019,” said Dimitrios Pavlakis, industry analyst at ABI Research. “Somewhat slower growth for 4G and the subsequent cannibalization of 3G shipments will characterize this chapter.”

China’s current economic climate continues to affect most technology segments, causing shipment decline across multiple verticals and affecting SIM card sales noticeably.

Governmental mandates are also pushing the three big MNOs – China Mobile, China Unicom and China Telecom — to increase LTE penetration rates. Chinese citizens will be subjected to mandatory SIM Card registration by 2017, or otherwise will be under penalty of account termination.

The increasing global SIM card market will top five billion shipments this year. Developing markets in South Africa, Saudi Arabia, and pockets in the Asia Pacific and Middle East regions will experience above average growth rates through 2021.

While 4G network rollouts are still facing difficulties in certain Asia Pacific regions, global 4G SIM card shipments accounting for approximately 23 percent of the overall APAC shipments for 2016. This percentage will rise to almost 45 percent by 2021 in the APAC region, sitting above the 43 percent global 4G shipments, as 4G becomes dominant.