This market report provides a comprehensive overview of the broadband Internet segment of the market across the various economies of Asia. Asia makes a strong claim to be leading the world when it comes to the development of broadband Internet. In fact, in 2008 after the mobile market, broadband is the fastest growing telecom market segment in Asia. The energetic expansion of broadband, however, has remained more of a phenomenon limited to the developed economies, with narrowband dial-up access being the norm in the poorer developing countries of the region.
Of course, there are signs that this is changing, but for the moment there is a ‘digital gap’. In those economies where the broadband market is taking off, DSL and cable modem platforms have both proved popular, with DSL having had a clear advantage. With DSL dominating the world market, Asia has become the leading market in the world for DSL, with about 38% of the world’s DSL subscribers. More recently, we have seen the advent of FttH as an alternative platform for broadband access. In the leading technology markets of Japan and South Korea FttH is starting to displace other forms of high-speed Internet access.
With broadband Internet continuing to take Asia by storm, the region’s broadband market finds itself dominated by six players. And these are predominantly the economies of North Asia. South Korea, Hong Kong, Singapore, Macau, Taiwan and Japan, for the moment at least, have left the rest of the region behind in terms of penetration and sophistication of their broadband services and infrastructure.
Of these leading countries, South Korea is the most remarkable example of the Asian broadband revolution, with a broadband subscriber penetration in mid-2008 greater than 31%, while more than 90% of households in the country have a high-speed broadband Internet connection.
Broadband subscribers and households in South Korea - March 2008
In the July 2008 ranking released by the FTTH Council, Asia consolidated its position as the global leader in the march toward next-generation broadband. The ranking tracks the level of FttH market penetration in economies where more than 1% of households are connected directly into high-speed fibre networks. In all, 14 economies met this threshold.
South Korea, Hong Kong, Japan and Taiwan occupied the top four positions in the ranking, and the Asian region now accounts for more than 27 million of the world’s estimated 32 million FttH connections. South Korea has nearly 37% of its households connected to fibre, with Hong Kong at 27%, Japan at 24% and Taiwan at 7.7%. Although the People’s Republic of China ranked 11th in terms of market penetration, growth in the number of connections to 7.5 million means that China is now second only to Japan in the number of households with FttH.
Despite the regional broadband market being dominated by the relatively small number of countries mentioned above, there continues to be considerable activity in the Internet and online markets across Asia. In terms of sheer broadband Internet numbers, China (70 million broadband subscribers) is already maintaining a real presence, despite its relatively modest user penetration compared with the leading markets.
In the Exhibit below we see those economies that fall outside the top band of Asian Internet markets. In terms of broadband household penetration two distinct lower groupings appear. The countries in the second band - roughly between 5% and 20% household penetration - are in expansion mode when it comes to their Internet markets. But there is a clear gap - more than 30% on the household penetration scale - to be bridged before they can be counted in the top grouping. With Malaysia, Vietnam and Thailand playing lead roles in this middle group, we typically find that in the last few years both operators and governments have started to give priority to expanding Internet access and speed in these countries. Of course, as noted already we find China in this grouping as it battles to provide Internet access for its huge population.
In the third grouping - those markets with a user penetration of less than 2%, we find those countries that, for whatever reason, have not yet ‘got their act together’ when it comes to Internet. Of course, some are performing relatively well under difficult circumstances. Indonesia has major infrastructure challenges to overcome in providing Internet to its citizens. India, like China, is struggling with its huge population and has focused on mobile telephony services. At the bottom end of the scale, however, we find a number of countries that simply have to manage with poor telecom infrastructure and generally underdeveloped regulatory regimes.
Asia’s broadband markets ranked by household penetration - June 2008
Market ranking Penetration range (as proportion of all households) Market (household penetration)
Data in this report is the latest available at the time of preparation and may not be for the current year.