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2008 Asia - Telecoms, Mobile and Broadband Market Overview

This report provides an overview of the trends and developments in the telecommunications markets in the Asian region. Subjects covered include:

  • Market statistics on the Asian telecommunication sectors;
  • Industry and market overviews;
  • Infrastructure developments, including submarine networks, IP and NGNs;
  • Mobile voice and data markets;
  • Internet, including VoIP;
  • Broadband (DSL, FttH, cable modem and wireless);
  • Digital media and convergence, including triple and quadruple play models.
Researcher:- Peter Evans, Lisa Hulme-Jones

Current publication date:-October 2008 (14th Edition)

Next publication date:- October 2009

We continued to see a generally strong run of economic growth throughout the Asian region in 2007 and into 2008. This was despite some anxiety resulting from the uncertainty surrounding oil prices and the impact of this on the global economy. On a positive note, the giant growth engine that is China continued to provide a sustained lift to the economies of its neighbours. However, it was recognised that if China’s economy started to show signs of stalling, the impact would certainly be felt right across Asia.

In the second half of 2008, Asia was bracing itself for the snowball effect of the global credit crisis that started in the US and spread to Europe. Although the future remained uncertain, looking back there was clear evidence that the region’s telecommunications sector had clearly been benefiting from a period of healthy economic growth.

Highlights in the telecoms sector coming into 2008 include:

  • Asia’s mobile markets continued to grow strongly; having passed the one billion subscriber milestone in late 2006, the market was expanding at an annual rate of almost 30% and had reached 1.5 billion by mid-2008.
  • 3G mobile services continued to be rolled out in the major markets, with the developed markets taking a strong lead.
  • The region’s choice of Internet access has been rapidly moving from dial-up to broadband, Asia also claiming the position of the world’s leading Internet region in terms of users.
  • Broadband access continues to become more sophisticated, with the developed markets moving to FttH.
  • The developed economies of Asia were also leading the way in the building of powerful NGNs in the region.
In looking at the Asian telecom market, it is impossible to avoid the impact of China and, to some extent, India. With its huge population and strongly developing economy, China is a real presence in the region. Having become the single biggest mobile market in the world, China continued to expand its mobile subscriber base at a rate of 20% per annum into 2008; as a consequence, it claimed 560 million mobile subscribers by March 2008. Over the same period, India’s mobile subscriber base was growing at an annual rate of almost 60% and had reached 245 million by March 2008. The two markets between them claimed more than 50% of the total regional mobile market.

In the meantime, while China and India had been attracting the publicity, a long-time global and regional telecoms giant in the shape of Japan had been keenly maintaining its reputation for innovation by regularly adding value to the telecom market. Its industry leadership has embraced the application of wireless Internet access, with over 87 million mobile subscribers using either NTT DoCoMo’s i-mode (48 million) or one of the other proprietary products by early 2008. And even more significantly Japan mobile operators had signed up 68 million 3G subscribers by March 2008. Its promotion of FttH as a broadband platform has been a crucial factor in its continuing leadership role.

Asia continues to claim the rank of world’s largest regional Internet market. With an estimated 580 million Internet users (a user penetration of 16%) by early 2008, Asia was extending its lead over Europe (385 million) and North America (250 million). It comes as no surprise that Internet applications in Asia are being led by the developed economies of the region − Japan, Hong Kong, South Korea, Singapore and Taiwan. This group has been joined by China, with its user penetration of 16%, and a massive 210 million Internet users by the start of 2008, according to ITU estimates. Although the published statistics varied, one source had China with 253 million Internet subscribers by June 2008; this compared with 248 million in the US.

South Korea continues to dominate the area of broadband Internet access, leading the world and the region with 90% of its households having a broadband connection by early 2008. The two major technologies supporting broadband in Asia are DSL and cable modem, with DSL having the ascendancy. For the time being, DSL dominates by a factor of 2:1. The market is changing, however, with the rapid roll-out of FttH in a number of the more highly developed markets.

As the local economies across Asia gained traction and national regulators continue to restructure their markets, telcos have been facing increasingly competitive markets. Price cutting has been widespread, the offering of value-added services has been expanding and innovative product promotion and packaging remain popular. Working in such highly competitive markets, ARPU across the product range has experienced strong downward pressure, but some equilibrium was achieved over the 2007/08. In the meantime, with the introduction of 3G services and other VAS platforms, some operators have seized the opportunity to grow their ARPU again. Nevertheless, profit margins have been falling and operators need to be flexible to stay competitive in a quickly changing market. More significantly, the increased likelihood of a global recession will present even greater challenges.

For the last decade, investment strategies adopted by telcos in Asia have remained relatively cautious. While obviously still keen to find new markets, operators, often with the support of equipment suppliers, have been building fresh business plans to suit the changing market. The Asian Economic Crisis of the late 1990s followed by the dotcom crash had taught operators some powerful lessons on investment in the telecom sector. A case in point was the oversupply of submarine cable capacity that became apparent four or five years ago. This had a particularly severe impact on investment plans - and on the financial viability - of companies. As the submarine cable market started to rebound in 2007, it once again needed an injection of capital. With the availability of credit being much tighter, the players involved are expected to adopt a much more circumspect approach to funding these projects. At the same time, after a period of sluggish growth, the satellite segment has also seen a series of new launches and there are signs that this will continue, at least at a modest pace.

The region has a wide spectrum of telecommunications and IT development. Countries can be found at both ends of this development spectrum. Some of the world’s leading developers and implementers of technology are to be found in Asia, but many countries in the region remain in the early stages of their IT and telecommunications adoption. There is, nevertheless, a consistently strong awareness of the importance of telecommunications and information being demonstrated right across the region. The commercial significance of telecommunications is well recognised and, at the same time, the potential contribution to the social and cultural wellbeing of nations is also well appreciated. As a consequence, growth potential in the Asian market remains extremely high; the big new drivers are broadband and IP services, as well as ongoing growth in the mobile sector, particularly as more and more VAS come into play. NGNs are also being rolled out by the regional heavyweights.

Peter Evans
October 2008

Data in this report is the latest available at the time of preparation and may not be for the current year.

This report provides an overview of the trends and developments in the telecommunications markets in the Asian region. Subjects covered include:
  • Market statistics on the Asian telecommunication sectors;
  • Industry and market overviews;
  • Infrastructure developments, including submarine networks, IP and NGNs;
  • Mobile voice and data markets;
  • Internet, including VoIP;
  • Broadband (DSL, FttH, cable modem and wireless);
  • Digital media and convergence, including triple and quadruple play models.

1.1 Key developments
1.1.1 General
1.1.2 Infrastructure
1.1.3 Internet
1.1.4 Broadband
1.1.5 Mobile
1.2 Telecoms market overview
1.3 Telecommunications infrastructure
1.4 Fixed-line services
1.5 Internet services
1.6 Broadband Internet
1.7 Mobile services
1.7.1 Overview of selected mobile markets China Hong Kong India Indonesia Japan Pakistan Philippines Thailand Vietnam
2.1 Submarine cable networks
2.1.1 Overview
2.1.2 Taiwan earthquake - December
2.1.3 Major submarine cable systems Asia-America Gateway (proposed) Asia-Pacific Cable Network (APCN) Asia-Pacific Cable Network 2 (APCN 2) APCN 2 system configuration Ochre’s proposed Australia-Asia cable Australia-Guam cable (proposed) Australia-Hawaii cable (proposed) Australia-Japan Cable (AJC) AJC upgrade AJC system configuration C2C C2C system configuration Dumai-Melaka Cable East Asia Crossing (EAC) EAC system configuration EAC Pacific (proposed) Fibre-optic Link Around the Globe (FLAG) Guam-Philippines Cable Hong Kong-Japan cable i2i Network India-Singapore cable (proposed) Indonesia-Australia cable (proposed) Possible Perth-Indonesia cable JAKABARE Japan-US cable (J-US) J-US system configuration JASURAUS Korea-Japan cable Malaysia-Singapore-India cable (proposed) Nava Network Pacific Crossing (PC-1) PC-1 system configuration Pacnet Pacific Unity cable Reach North Asia Loop (RNAL) cable SEA-ME-WE cable networks SEA-ME-WE 3 system configuration SEA-ME-WE 4 system configuration Singapore-Hong Kong-Japan cable (proposed) Southern Cross cable Tata Indicom India-Singapore Thailand-Indonesia-Singapore cable TIS system configuration Thailand-Vietnam-Hong Kong (TVH) cable TVH system configuration Trans-Pacific Cable Network 5 (TPC-5CN) Trans-Pacific Express (proposed) VSNL Transpacific (formerly Tyco Transpacific) cable
2.2 IP networks & VoIP services
2.2.1 Asia market overview
2.2.2 Japan Overview IP telephony/VoIP market
2.2.3 South Korea IP telephony/VoIP market
2.2.4 China IP telephony/VoIP market Skype VoIP regulatory issues IP-Virtual Private Networks (IP-VPNs)
2.2.5 Singapore Overview IP telephony/VoIP market IP networks
2.2.6 Taiwan IP telephony/VoIP market
2.2.7 India IP telephony/VoIP market IP networks
2.2.8 Hong Kong IP telephony/VoIP market IP operators
2.2.9 Other markets in Asia Malaysia Indonesia Philippines Thailand
2.3 Next Generation Networks (NGNs)
2.3.1 Overview Japan National infrastructure overview Info-communications infrastructure South Korea Broadband convergence Network (BcN) China ChinaNet Next Carrying Network (CN2)/IPv Singapore Broadband multimedia network - Singapore One Taiwan Hong Kong India Malaysia Thailand
3.1 Market overview
3.1.1 Statistical overview
3.2 Cultural and regulatory issues
3.2.1 Public Internet access
3.3 Internet advertising
3.4 Asian Domain Name Dispute-Resolution Centre
3.5 Internet access and infrastructure
3.5.1 Internet bandwidth
3.5.2 Internet data centres
3.6 ISP market
3.7 ASP market
3.8 Intranets and extranets
3.9 E-government
4.1 Market overview
4.1.1 Digital Subscriber Line (DSL)
4.1.2 Cable modem
4.1.3 Fibre-to-the-Home (FttH)
4.1.4 Wireless broadband Overview WiFi/WLAN Broadband Wireless Access (BWA) WiMAX
4.1.5 Satellite Internet
4.1.6 Broadband over Powerline (BPL)/Powerline Communications (PLC)
4.1.7 Major broadband markets in Asia South Korea Japan Taiwan Singapore Hong Kong China
4.2 Digital Subscriber Line (DSL)
4.2.1 Overview
4.2.2 Japan
4.2.3 South Korea Market overview Very High Data Rate DSL (VDSL)
4.2.4 China Market overview
4.2.5 Hong Kong
4.2.6 Singapore
4.2.7 Taiwan
4.2.8 India
4.2.9 Malaysia
4.3 Fibre-to-the-Home (FttH)
4.3.1 Overview
4.3.2 Japan Background Development patterns Growth of FttH
4.3.3 South Korea
4.3.4 China
4.3.5 Other Asian markets Singapore Taiwan Hong Kong India Malaysia Thailand
4.4 Broadband over Powerlines (BPL)
4.5 Wireless broadband
4.5.1 Overview
4.5.2 WiFi
4.5.3 WiMAX
4.5.4 Taiwan Background WiMAX
4.5.5 Japan Background WiMAX
4.5.6 South Korea Background WiBro/WiMAX
4.5.7 China Overview WLAN Authentication and Privacy Infrastructure (WAPI)
4.5.8 Hong Kong
4.5.9 Singapore Overview WiFi Allocation of wireless broadband spectrum
4.5.10 Malaysia WiFi/WLAN WiMAX
5.1 Market overview
5.2 Japan
5.2.1 Overview
5.2.2 Broadband TV/IPTV IPTV
5.2.3 VoD YouTube
5.3 South Korea
5.3.1 Broadband convergence Network (BcN) Problems with BcN
5.3.2 IPTV
5.3.3 VoD
5.4 China
5.4.1 Overview
5.4.2 Convergence and regulatory issues
5.4.3 IPTV IPTV forecasts
5.4.4 VoD
5.4.5 Interactive TV (iTV)
5.5 Hong Kong
5.5.1 Overview
5.5.2 Quadruple play models
5.5.3 Interactive TV (iTV)
5.5.4 Convergent service operators i-Cable Hong Kong Broadband Network Services (HKBN) PCCW
5.6 Singapore
5.6.1 Convergence StarHub/SCV merger
5.6.2 IPTV
5.7 Taiwan
5.7.1 Convergence
5.7.2 Chunghwa Telecom
5.7.3 Interactive TV
5.8 Other markets
5.8.1 Malaysia - iTV
5.8.2 Thailand - IPTV
5.8.3 India - IPTV
6.1 Overview
6.1.1 Regional characteristics
6.1.2 Growth drivers China Hong Kong India Indonesia Japan Pakistan Philippines Taiwan Thailand Vietnam
6.1.3 Regional growth rates
6.1.4 Market structure Overview Mobile Virtual Network Operators (MVNOs)
6.2 Mobile technologies
6.2.1 Overview
6.2.2 GSM
6.2.3 CDMA
6.2.4 Personal Communication Services (PCN/PCS)
6.2.5 Third Generation (3G) mobile Overview 3G standards 3G licensing 3G roll-out High-Speed Downlink Packet Access (HSDPA)
6.3 Mobile voice services
6.3.1 Prepaid services
6.3.2 Fixed-mobile convergence (FMC)
6.4 Mobile data services
6.4.1 Market overview
6.4.2 Short Messaging Service (SMS)
6.4.3 Multimedia Messaging Service (MMS)
6.4.4 Wireless Internet Wireless Application Protocol (WAP) i-mode-type access
6.4.5 General Packet Radio Service (GPRS)
6.4.6 Regional overview China India Indonesia Japan Singapore South Korea Taiwan
Table number: on page number:
Table 1 - Top 10 fixed-line markets in Asia ranked by subscribers - 2007
Table 2 - Internet penetration rate and users in Asian markets - 2007
Table 3 - Top 10 broadband markets in Asia ranked by subscriber penetration - 2007
Table 4 - Mobile subscribers and annual change by penetration ranking in Asia - March 2008
Table 5 - Top 15 mobile operators in Asia by subscribers - March 2008
Table 6 - Japan VoIP subscribers - 2003 - 2008
Table 7 - Japan VoIP subscribers and market share by operator - June 2008
Table 8 - Japan VoIP subscribers by number category - June 2008
Table 9 - Registered Tom-Skype users in China - 2005 - 2007
Table 10 - Internet users in Asia - 1999 - 2008
Table 11 - Top 10 Asian countries ranked by Internet user penetration - 2007
Table 12 - Internet and broadband subscribers in selected Asian countries - 2007
Table 13 - Internet penetration and users in Asian countries - 2007
Table 14 - Major broadband markets in Asia by subscribers and penetration - June 2008
Table 15 - Major broadband access types by subscribers & share of world market in Asia - 2007
Table 16 - DSL subscribers and growth rate in leading Asian markets - 2006 - 2007
Table 17 - FttH broadband subscribers in Japan - 2002 - 2007
Table 18 - WiFi hotspots in Asia - 2004 - 2009
Table 19 - Broadband subscribers & penetration rate in South Korea - 1998 - 2008
Table 20 - Broadband subscribers & penetration rate in Taiwan - 2000 - 2008
Table 21 - Broadband subscribers in Singapore - 1999 - 2008
Table 22 - Broadband subscribers by access type in Sinmgapore - February 2008
Table 23 - Broadband subscribers in Hong Kong - 2000 - 2008
Table 24 - Broadband subscribers in China - 2000 - 2008
Table 25 - Subscriber overview of DSL market in Asia - 2007
Table 26 - DSL subscribers in leading Asian markets - 2005 - 2007
Table 27 - DSL subscribers in Japan - 2000 - 2008
Table 28 - DSL subscribers in South Korea - 1999 - 2008
Table 29 - DSL subscribers in China - 2000 - 2008
Table 30 - DSL subscribers in Hong Kong - 1999 - 2008
Table 31 - DSL subscribers in Singapore - 2000 - 2008
Table 32 - DSL subscribers in Taiwan - 2001 - 2008
Table 33 - DSL subscribers in India - 2001 - 2008
Table 34 - DSL subscribers in Malaysia - 2001 - 2008
Table 35 - FttH broadband subscribers in Japan - 2002 - 2008
Table 36 - Broadband subscribers and market share by access type in Japan - 2007
Table 37 - FttH subscribers and market share by operator in Japan - 2007
Table 38 - Broadband subscribers by access type in South Korea - 2007
Table 39 - FttH subscribers by service provider in South Korea - March 2007
Table 40 - Broadband subscribers and annual change by access type in Taiwan - 2007
Table 41 - WiFi hotspots in selected Asia markets - July 2008
Table 42 - Cable TV subscribers and penetration rate in Japan - 2002 - 2007
Table 43 - BcN implementation goals in households/subscribers - 2005; 2007; 2010
Table 44 − Pay TV subscribers: cable, satellite and ADSL in Hong Kong - 2001 - 2007
Table 45 - i-Cable broadband, cable TV and VoIP subscribers in Hong Kong - 2000 - 2007
Table 46 - Triple play subscribers and monthly ARPU in Hong Kong - 2003 - 2007
Table 47 - PCCW growth in NOW TV - 2003 - 2007
Table 48 - Mobile subscribers in Asia - 1990 - 2008
Table 49 - Mobile vs fixed-line subscribers & penetration in selected Asian markets - March 2008
Table 50 - Top 10 mobile markets and annual change by subscribers in Asia - March 2008
Table 51 - Top 10 mobile markets by penetration rate in Asia - March 2008
Table 52 - Top 12 mobile operators by subscribers in Asia - March 2008
Table 53 - Asia mobile markets: subscribers, annual change & where penetration <10% - March 2008
Table 54 - Asia mobile markets: subscribers, annual change & where penetration 10 to 50% - March 2008
Table 55 - Asia mobile markets: subscribers, annual change and penetration rate - March 2008
Table 56 - MVNO subscribers in Hong Kong - 2005 - 2008
Table 57 - GSM worldwide subscribers and Asian market percentage - 1997 - 2008
Table 58 - Worldwide CDMA subscribers and Asian market percentage - 1997 - 2008
Table 59 - China’s PAS (Little Smart) subscribers - 2002 - 2007
Table 60 - 3G WCDMA subscribers in Asia - 2004 - 2007
Table 61 - 3G WCDMA subscribers in selected Asian countries - March 2008
Table 62 - WCDMA, 1xRTT, and 1x EV-DO operators and subscribers in Asia - March 2008
Table 63 - Prepaid mobile subscribers in Asia - 1999 - 2007
Table 64 - Prepaid subscribers - selected Asian operators - August 2008
Table 65 - SMS traffic in China and Hong Kong - 2007
Table 66 - Mobile wireless Internet subscribers in Asia by provider - January 2008
Table 67 - Mobile data revenues: top three countries worldwide - 2006
Table 68 - Mobile wireless Internet subscribers in Japan - 2000 - 2008
Table 69 - Wireless Internet subscribers and market share in South Korea - November 2007
Table 70 - Mobile data service revenue as % of total mobile revenue in Taiwan - 2001 - 2007
Table 71 - Mobile Internet subscribers in Taiwan - 2001 - 2007
Table 72 - Mobile Internet subscribers by access method in Taiwan - 2007
Exhibit number: on page number:
Exhibit 1 - Broadband markets ranked by household penetration in Asia − June 2008
Exhibit 2 - Major submarine cables in the Asia-Pacific region − 2008
Exhibit 3 - Definition: Indefeasible Right of Use (IRU)
Exhibit 4 - Japan’s Next-Generation Broadband Strategy 2010 - summary of goals
Exhibit 5 - The ‘One Laptop per Child’ project
Exhibit 6 - IPTV subscribers by province and operator in China - 2007
Exhibit 7 - Mobile technologies (2G) in use in selected Asian countries - 2008
Exhibit 8 - Selected CDMA operators in the Asian region - cellular services - March 2008
Exhibit 9 - Asia region 2.75G and 3G mobile service roll-outs - 2008

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