Cambridge, Mass. – Fueled by mobile penetration into the rural market and by uptake of 3G services, China’s telecommunications market will generate $187 billion by 2014, surpassing Japan to become the largest telecommunications services market in Asia, according to a new report from Pyramid Research. China’s telecommunications market generated US$110 billion in 2008, making it the second largest telecommunications services market in Asia/Pacific after Japan, notes Daniel Yu, analyst at Pyramid Research. “Given continued demand for connectivity and rising adoption of mobile and fixed broadband services, the Chinese market will increase at a compound annual growth rate of 8.8 percent between 2009 and 2014, reaching $187 billion by 2014, surpassing Japan as the largest telecommunications services market in Asia,” says Yu. “China, like many emerging markets, is becoming an increasingly mobile market, adding 71.2 million mobile subscriptions in 2008, roughly 12 percent of all additions worldwide and second only to India’s 113.3 million net additions,” says Yu. Mobile service revenue growth will be supported by a penetration increase from 58 percent at year-end 2009 to 80 percent at year-end 2014. Pyramid expects mobile services to account for more than 76 percent of total services revenue in China by 2014. Despite the declining rate of growth in the economy, Pyramid Research expects the mobile industry to experience healthy growth in 2009 as mobile operators roll out 3G networks and extend coverage to rural areas. “China Mobile, for example, is dedicating 30 percent of its total Capex on 2G network expansion, and 70 percent of the allocated portion will be used in the rural market,” says Yu.