This Asia market report covers 35 countries in North, South, South East and Central Asia. The theme of the report is mobile deployment and development, particularly focusing on voice application for mobile use.
The countries covered in this report include:
Afghanistan, Armenia, Azerbaijan, Bangladesh, Bhutan, Brunei Darussalam, Cambodia, China, Georgia, Hong Kong, India, Indonesia, Japan, Kazakhstan, Kyrgyzstan, Laos, Macau, Malaysia, Maldives, Mongolia, Myanmar (Burma), Nepal, North Korea, Pakistan, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Tajikistan, Timor Leste, Thailand, Turkmenistan, Uzbekistan, Vietnam.
Mobile markets in Asia continued to experience strong growth during 2009 and into 2010, this despite many countries being close to or over the 100% penetration mark. With total subscriber numbers in the region having grown by around 20% in 2009, there was certainly some moderation of growth taking place, but the underlying strength of the market was still evident. It was anticipated that by end-2010 there would be around 2.6 billion mobile subscribers across Asia.
Of special note has been the remarkable growth in the two massive markets of India and China where monthly net additions are regularly between 10 million and 15 million subscribers. These two countries alone account for over 22% and 35% overall market share in the Asia region respectively; or a combined 57%.
There is still room for mobile growth in Asia. Markets with large populations and relatively low penetration rates, such as India, China, Philippines, Pakistan and Indonesia, will continue to grow at a rapid rate. In the more mature markets such as Japan, Taiwan and South Korea, mobile numbers will rise less than 5%. Growth is being driven by various factors, including government investment to drive the economy; infrastructure building after years of neglect or fixing the after effects in war torn countries, and also major foreign investment.
In the developing economies quick and easy mobile uptake is the preferred, and often only, option for subscribers, exacerbated by low fixed-line deployments. These countries also offer investors the promise of continued growth of the mobile infrastructure and subscriber numbers. While subscriber growth and market share is important in the developing economies, there comes a point where the venture must result in profit.
Operators still face the huge challenge of trying to prevent ARPU slide as mobile services spread to poorer parts of the country and the population. To some extent, a large customer base will help to offset low spend but it is also anticipated that new non-voice services will help to drive revenue. Operators are developing mobile services such as mobile banking, remittence payments, and mobile health services that take advantage of a lack of access by the poor to social infrastructure such as banks and hospitals.
ChinaChina continues to extend its lead as the single largest mobile market in the world. The vast majority of services are GSM - China is the largest GSM market in the world.
By early 2010, the number of mobile phone users reached over 745 million and mobile penetration was at 56.2%. The robust growth was due to an expanding rural market and the increasing number of people who have acquired more than one mobile phone. With many of the more prosperous eastern Chinese cities saturated, rural areas are the new target. However, this massive push into China’s rural areas has meant that ARPU is being squeezed. Both China Mobile and China Unicom have been grappling with a steady decline in the average revenue earned from new users. As in other markets around the world, this trend has been fuelled by the growing popularity of prepaid cards instead of the more lucrative postpaid subscriber contracts.
In 2009 China added 26.5 million subscribers per quarter with China Mobile accounting for over 70% share of the market. At end-2009, China had amassed 233 million mobile Internet customers, accounting for 60.8% of the country’s total Internet users. Moreover, CNNIC found that some 30.7 million users’ only means of accessing the Internet in 2009 was via their mobile phone. Mobile Internet access services in China generated revenues of RMB14.78 billion in 2009, increasing by 25.8% year-on-year.
The long awaited 3G licences were finally awarded in late 2008 and by mid 2009 all three operators were aggressively building out their networks in over 340 cities across China. China Mobile was awarded a TD-SCDMA licence, China Unicom a WCDMA licence and China Telecom a CDMA2000 licence. By end 2009 though the number of 3G subscribers were well below expectations at 15 million.
Hong KongHong Kong’s mobile market has some of the cheapest tariffs in the world amidst a highly competitive environment. This is one of the reasons why it is has such a high penetration rate. An ongoing price war has cut mobile phone air-time rates to levels where operators have become increasingly reliant on provision of non-voice value-added services to maintain margins. This, in turn, has made 2.5G and 3G services of considerable importance to the operators. Entering 2010, total mobile subscribers were over 12 million including over 3.8 million 3G subscribers.
JapanJapan’s mobile market place remains an aggressive arena. Maturity in the market, with 3G services accounting for over 90% of the total market of 110 million subscribers going into 2010, has meant that operators are increasingly fighting to retain customer loyalty.
The level of 3G take-up has been encouraged by the operators themselves, which earlier had announced their intentions to migrate all subscribers from 2G to 3G networks as they sought to acquire stronger ARPUs through offering data rich services. By doing this they believed they could top up revenues, which had begun to flag. Now that the market is finally at the stage where 3G will soon account for 100% of the market, operators are turning to Super 3G or LTE. NTT DoCoMo, KDDI, Softbank Mobile and eMobile are all due to implement LTE by 2012.
IndiaThere were around 525 million mobile subscribers in India at the start of 2010. This was up from 345 million 12 months earlier as the market continued to power forwards adding an average of 15 million customers each month. In other words, the annual growth rate was still around 50% as penetration passed the 40% milestone. India’s mobile operators have continued to push their services into the untapped parts of the market - especially the rural and remote parts of the country - attracting new customers with low call rates, cheap handsets and creative packages. While running with some of the lowest mobile tariffs in the world, the market has also seen some of the highest usage rates in the world, a bonus for the operators in this highly competitive market.
The Cellular Operators Association of India (COAI) - which represents the telecom companies offering GSM services in India - said that it expected India’s mobile subscriber base to reach close to 900 million by 2012. Even with a subscriber base of 900 million, the COAI noted, the teledensity will still only be just 72%.
IndonesiaIndonesia’s mobile market has expanded rapidly in recent years. The number of subscribers had reached the 150 million mark in early 2010. This was up from 60 million just three years earlier. Annual growth remained strong, although it had eased somewhat, no doubt impacted to some extent by the softening of the economy following the global financial crisis of 2008/2009. Down from around 30% in 2008, the annual growth rate for mobile subscribers was running at just over 15% in 2009; growth of this order was set to continue, as there was room for more growth over the coming years. The subscriber base was set to breach the 200 million milestone some time in 2011. Indonesia has been quick off the mark with its roll-out of 3G networks; by mid-2009 there were already around 10 million 3G subscribers in the market.
VietnamVietnam’s mobile market has been developing at a rapid pace, after what was generally regarded as a slow start. Subscriber numbers have been increasing at an annual rate of between 50% and 100% per year. This pattern was continued through 2009 and into 2010. The number of subscribers was set to top 110 million by end-2010. Importantly, the government has committed itself to the continued growth of mobile networks, especially encouraging the extension of coverage to the provinces. In what was already a highly competitive market, 2009 saw the arrival of a seventh mobile operator, as subscriber penetration hovered around the 100% mark. The government issued four 3G licences in 2009, signalling what will probably be the market’s next phase in its development.
Asia - mobile subscribers by country - 2009 - 2010
Country 2009 (million) 2010 (e) (million)
Afghanistan 13.00 18.00
Armenia 2.55 2.60
Azerbaijan 7.00 8.25
Bangladesh 49.00 53.00
Bhutan 0.39 0.50
Brunei Darussalam 0.45 0.49
Cambodia 5.10 6.30
China 747.40 860.00
Georgia 4.00 4.50
Hong Kong 12.05 12.70
India 505.00 760.00
Indonesia 150.00 180.00
Japan 111.00 116.50
Kazakhstan 16.50 18.00
Kyrgyzstan 4.50 5.30
Laos 2.60 3.25
Macau 1.04 1.09
Malaysia 30.40 33.40
Maldives 0.43 0.45
Mongolia 1.95 2.05
Myanmar 0.42 0.48
Nepal 6.29 8.20
Pakistan 97.60 110.00
Philippines 78.50 86.00
Singapore 6.85 7.30
South Korea 47.90 48.40
Sri Lanka 14.00 15.50
Taiwan 26.50 27.50
Tajikistan 4.10 5.00
Thailand 67.50 73.00
Turkmenistan 1.80 2.70
Uzbekistan 18.40 25.75
Vietnam 111.00 127.00
Total 2,145.22 2,623.21
Data in this report is the latest available at the time of preparation and may not be for the current year.
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