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2004 South Asian Mobile Communications Market

This annual report offers a wealth of information on the Mobile market in Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka. Subjects covered include:

Trends, Analysis, Players, Revenues, Subscribers, Prepaid
Spectrum Auctions, Developments, Govt. Policies Infrastructure, GSM, CDMA, 3G
Mobile Data - Market Issue, Paging, Dedicated Services
SIM, SMS, MMS, GPRS, EDGE, WAP, M-Commerce
Telemetry, Location Services, Bluetooth, PMR, TMR
Mobile Satellite Services


Key Highlights

After 20 years of war and civil unrest, Afghanistan now has a chance to start a recovery process. Telecommunications will certainly play a crucial role in the effort to rebuild the country’s shattered economy and society. The telecommunications infrastructure that has survived does not even support a properly functioning network. It will be a huge task to establish national telecommunications coverage.
There are few computers in Afghanistan and many areas do not have electricity. There is no accurate information on how many Internet users there are in the country. Those that have Internet access have been going online using telephone lines provided by neighbouring Pakistan.
By June 2003, growing off a low subscriber base, the country’s mobile network was increasing at a remarkable annual rate of more than 600%. Penetration was a low 0.2%.
Bangladesh is one of the poorest, most densely populated, least developed countries in the world. Apart from its lowly economic status, major impediments to growth have included frequent cyclones and floods, as well as the inefficiency of its state-owned enterprises and the slow implementation of much-needed economic reforms. These factors impact on the building of the country’s telecom infrastructure and the regulatory reforms in the sector.
Low fixed-line telephone penetration in Bangladesh is partly due to the fact that at least 68,000 villages remain isolated outside the major cities. More than 90% of Bangladesh’s telephone services are located in urban areas. Dhaka and Chittagong, the two major cities, have 15 million people with only 250,000 fixed phone lines.
By contrast, the mobile market in Bangladesh has been almost doubling on an annual basis over the last two to three years. If the government continues the deregulation process and more mobile operators are licensed, it is predicted that there will be around 10 million mobile subscribers in the country by 2006.
The Internet came late to Bangladesh with connectivity in 1996. In the last few years it has started to grow dramatically, although obviously from a very low base. With an estimated user base of more than 350,000 by the end of 2002, representing only a 0.3% penetration, the local Internet industry is preparing to move into the next stage of its development. The country’s first broadband service was launched in June 2001 using DSL technology. A cable modem service was also offered at about the same time. But, for the time being, broadband services remain a minor component of the country’s Internet market.
Until relatively recently, Bhutan was isolated in terms of its telecommunications capability, the country’s mountainous landscape having been a barrier to the development of any sort of infrastructure. Whilst the country had a basic connection to the outside world as early as 1974 with the introduction of trunk calls between Bhutan and India, it was not until 1999 that telecom services started developing. Over a 4-year period to 2000, this country of less than a million people invested US$15 million in telecommunications infrastructure to provide a modern fixed-line network.
Bhutan has been without a mobile network. However, in November 2003, the government initiated Phase One of what was called the ‘b-mobile’ network. It planned to connect the vast majority of Bhutan’s remote mountainous territory to a mobile network by the end of 2006. The network was set to initially provide coverage for five major towns including the capital Thimphu.
After a late start, Bhutan has been cautiously embracing the Internet. The Bhutan Government and the United Nations Development Program (UNDP) signed a project agreement in March 1999 to support the development of DrukNet, the country’s first Internet Service Provider (ISP).
India has a large telecommunications network comprising 29,000 exchanges. With its 42 million fixed line subscribers representing a teledensity of only 4%, the country has achieved a remarkable coverage with an estimated 98% of the population having access to a telephone. Despite the enormous investment in telecommunications infrastructure over the last decade, servicing the huge population has presented difficulties. Even the booming mobile phone market is still less than 3% penetration.
Domestic fixed-line telephony had traditionally been the preserve of the state-owned MTNL and BSNL. In 2001, the Indian government threw open the whole fixed-line telephone business to an unlimited number of operators in each of the 21 telecom circles. Prior to this, only one private company had been allowed to compete with an existing state-run player in each circle. VSNL, the former monopoly provider of international telephony, lost its exclusive status in April 2002 when the market was opened to competition.
Growth in India’s mobile telephone sector, from a humble beginning in the mid-1990s, has really picked up pace in the past few years, aided by higher subscriber volumes, lower tariffs and falling handset prices. Now home to a clutch of global mobile operators working with local companies, India’s mobile market has been experiencing annual growth of more than 100%. Analysts predict that the market will continue to grow strongly, moving at a compounded annual rate of more than 50%.
Despite the considerable popular interest in Internet in India, the Internet Service Provider (ISP) market has been in disarray. According to the telecom regulator, there were 189 operational ISPs in the country, but 10% of the ISPs have 90% of the subscribers. The growing popularity of cybercafes has been playing a big role in fuelling Internet development in India. Whilst there is tremendous enthusiasm amongst the dial-up users, an estimated 60% of users regularly access the Internet via the country’s 9,000 cybercafes. But the take-up rate of high-speed broadband Internet access has been slow. By end-2003, broadband subscribers accounted for less than 4% of the total Internet subscriber base.
The Maldives boasts an efficient, up to date telecommunications system. In fact, the country’s telecom infrastructure is excellent, the Maldives boasting one of the most advanced communications systems in the region. Through the recent efforts of Dhiraagu, its monopoly telco, there is now full telephone service coverage of the archipelago. As well as the fixed-line network, the company also operates a GSM cellular mobile service and was, until recently, the country’s sole licensed provider of Internet service. A second ISP licence was issued in 2002. The move took advantage of the fact that Dhiraagu’s exclusive licence did not include Internet, thus providing an ideal starting point for the government’s plans to liberalise the wider telecommunications market.
The country’s mobile market has been grown quickly, boosted by Dhiraagu’s prepaid service offering. By March 2004, out of a total subscriber base of about 75,000, there were just over 60,000 prepaid mobile subscribers.
Telecommunication services have been growing steadily in Nepal over the last decade, but supply has not been able to meet demand, some 50% of which remains unmet. Rural services have been neglected, as they require higher investments in infrastructure. More than 60% of the telephones remain concentrated in Kathmandu, more than 98% of the population has no telephones, and 55% of villages still have no access at all. A number of factors have been slowing development. Nepal’s topography has made it extremely difficult to develop the telecommunications infrastructure. The country has been struggling under the adverse economic situation caused largely by political instability. The activities of the rebels operating throughout the country had also been a serious and direct threat to telecom infrastructure. Despite the difficulties, the country has made progress in its effort to meet the growing demand for telephone services. A second national mobile licence has been awarded and, under the terms of the licence, the operator has an obligation to invest at least 15% of its revenue in rural areas.
The licensing of a relatively large number of ISPs, combined with the liberalisation of the VSAT data market, has created excellent conditions for the Internet to thrive in Nepal. On a positive note, the population have been able to access Internet for some of the lowest prices in the region.
Since 1990 the number of fixed-line services in Pakistan has almost quadrupled. However, the majority of working lines are in urban areas, but 70% of Pakistan’s population lives in rural areas. A more balanced distribution needs to be considered for the longer term. Efforts by the government of Pakistan to promote the development, modernisation and diversification of its telephone infrastructure over the last decade have met with mixed success.
The government has been trying to stimulate growth in the data communications segment of the market. Data communication network licences have been issued to 15 operators and the cost of high-speed data transmission for software houses and information technology companies has been cut to make Pakistan the cheapest country in the region for bandwidth transmission. Despite all this the market remains sluggish.
With an annual growth rate of the order of 70%, the mobile market in Pakistan is experiencing a period of strong and sustained development. Subscriber numbers have increased from 68,000 in 1996 to 3.3 million by end-2003. However, by international standards, penetration remained very low at around 2%, suggesting that there was plenty of room for further expansion.
Although Internet access has been available in Pakistan since 1995, Internet penetration was still under 2% by early 2004. Following the military regime of General Pervez Musharraf taking control of the country in October 1999, an aggressive IT policy was pursued, aimed at boosting Pakistan’s drive for economic modernisation and creating an exportable software industry. Whilst this has been helping boost the popularity of the Internet, there is a long way to go. The broadband Internet market in Pakistan is almost non-existent.
Sri Lanka’s telecommunications sector has been struggling to develop in the difficult context of a nearly two-decade-long conflict between the government and separatist Tamil Tiger rebels. With the hope of an enduring peace and a general improvement in the country’s social and economic wellbeing, the telecom sector is well positioned for vigorous growth. Some major initiatives have been put in place to boost the building of national infrastructure and open the market to more competition. While still far from adequate, Sri Lanka’s telecommunications infrastructure has already been improved thanks to liberalised policies that have rapidly allowed significant private sector participation. The Bureau of Infrastructure Investment (BII) has been the primary authority for promoting and developing private sector participation.
Within a highly competitive market, the overall annual growth in mobile services has been running in excess of 30%. Although mobile penetration is relatively low at 7%, the number of mobile subscribers has already raced past the number of fixed-line services and is set to continue this strong growth. The market has no doubt benefited from the competition that comes with having four operators competing with each other, despite the fact that one of these - MTN - has around 60% market share.
Internet and other forms of data services have been starting to take off in Sri Lanka, but coverage and accessibility is limited (Internet user penetration is less than 2%) and the sophistication of the services available remains low. Until 1999, there were only six Internet Service Providers in Sri Lanka. The number has jumped to 23 and includes a number of innovative operators. Early moves to offer broadband Internet in the country have met with limited success and it will be some time before there is a viable broadband market.

1 MOBILE COMMUNICATIONS - MARKET OVERVIEW
1.1 Mobile market overview
1.1.2 Growth drivers
1.1.3 Market structure
1.2 Mobile technologies
1.2.1 Overview
1.2.2 GSM
1.2.3 CDMA
1.2.4 Personal Communication Services (PCN/PCS)
1.3 Mobile services
1.3.1 Prepaid service
1.3.2 In-building coverage
1.3.3 Fixed-mobile convergence
1.3.4 Mobile gaming
1.4 Mobile satellite services
1.4.1 Market overview
1.4.2 Asia Cellular Satellite
1.4.3 Iridium Satellite
1.5 Mobile data services
1.5.1 Market overview
1.5.2 SMS
1.5.3 MMS
1.5.4 WAP vs i-Mode
1.5.5 GPRS
1.5.6 Push-to talk over Cellular (PoC)
1.5.7 Private Mobile Radio
1.6 Mobile applications
1.6.1 M-Commerce
1.6.2 Asia Mobile Electronic Services Alliance
1.7 Third generation mobile
1.7.1 Overview
1.7.2 Third generation standards
1.7.3 Third generation licensing
1.7.4 Third generation roll-out

2 AFGHANISTAN
2.1 Overview of Afghanistan’s mobile market
2.2 Mobile operators
2.2.1 AWCC
2.2.2 Second mobile licence
2.3 Satellite mobile
2.3.1 Globalstar

3 BANGLADESH
3.1 Overview of Bangladesh’s mobile market
3.1.1 Statistical overview
3.1.2 Interconnection issues
3.1.3 PHS
3.2 Mobile operators
3.2.1 Pacific Bangladesh Telecom Ltd
3.2.2 GrameenPhone
3.2.3 Sheba Telecom
3.2.4 Telekom Malaysia International Bangladesh
3.2.5 Bangladesh Telegraph and Telephone Board
3.3 Mobile services
3.3.1 Prepaid cards
3.3.2 Wireless Internet
3.3.3 Handsets
3.3.4 Satellite mobile

4 BHUTAN
4.1 Overview of Bhutan’s mobile market

5 INDIA
5.1 Overview of India’s mobile market
5.1.1 Market developments
5.1.2 Regulatory environment
5.1.3 Mobile market segments
5.1.4 Technologies
5.2 Mobile services
5.2.1 Value-added services
5.2.2 Prepaid services
5.2.3 Wireless data services
5.2.4 Small Messaging Service
5.2.5 Multimedia Messaging Service
5.2.6 Third generation mobile
5.3 Satellite mobile
5.3.1 ACeS
5.3.2 Inmarsat
5.4 Major operators
5.4.1 Market overview
5.4.2 Major mobile operators

6 MALDIVES
6.1 Overview of the Maldives’ market overview
6.2 Paging

7 NEPAL
7.1 Overview of nepal’s mobile market
7.1.1 Second mobile licence award
7.2 Paging services
7.3 Satellite mobile

8 PAKISTAN
8.1 Overview of Pakistan’s mobile market
8.1.1 Statistical overview
8.1.2 Competitive market
8.1.3 Single access number
8.1.4 Calling Party Pays
8.2 Major mobile operators
8.2.1 Paktel
8.2.2 Pakcom (Instaphone)
8.2.3 Mobilink GSM
8.2.4 Ufone
8.3 Mobile services
8.3.1 Prepaid cards
8.3.2 Wireless Application Protocol (WAP)
8.4 Satellite mobile

9 SRI LANKA
9.1 Overview of Sri Lanka’s mobile market
9.2 Major mobile operators
9.2.1 Celltel Lanka
9.2.2 Lanka Cellular/Orange
9.2.3 Mobitel
9.2.4 MTN
9.3 Third generation mobile
9.4 Satellite mobile

10 GLOSSARY OF ABBREVIATIONS

Exhibit 1 - Mobile technologies (2G) in use in selected countries - 2003
Exhibit 2 - CDMA operators in the Asia region - 2003
Exhibit 3 - Asia region 3G mobile roll-out - June 2004
Exhibit 4 - Distribution of 2.5G and 3G technologies in Asia - 2003



Table 1 - Asia mobile subscriber growth - 1990 - 2003
Table 2 - Fixed-line and mobile phone subscribers (selected Asian countries) - 2003
Table 3 - Top 10 Asia mobile markets (ranked by subscribers) - 2003
Table 4 - Top 10 Asia mobile markets (ranked by penetration) - 2003
Table 5 - Top 10 Asia mobile operators (by subscribers) - 2003
Table 6 - Asia mobile revenue forecasts - 2004 - 2008
Table 7 - Asia mobile markets: under 5% penetration - 2003
Table 8 - Asia mobile markets: penetration between 5% and 20% - 2003
Table 9 - Asian GSM subscriber growth - 1997 - 2003
Table 10 - Asian GSM market forecasts - 2004 - 2007
Table 11 - Asian CDMA subscriber growth - 1997 - 2004
Table 12 - Asia prepaid mobile subscriber growth - 1999 - 2003
Table 13 - Popularity rating of mobile Internet services for selected countries - 2002
Table 14 - Asia SMS traffic (selected markets) - 2003
Table 15 - Asian SMS revenue forecasts - 2003 - 2006
Table 16 - Asian MMS revenue forecasts - 2003 - 2006
Table 17 - MMS user forecasts for selected countries - 2003 - 2005
Table 18 - Subscriber forecasts for 2.5G and 3G - 2006
Table 19 - WCDMA, 1xRTT, and 1xEV-DO subscribers in Asia - 2003
Table 20 - Mobile subscriber growth - 2002 - 2003
Table 21 - Mobile subscribers by operator - 2003
Table 22 - Mobile subscriber growth - 1996 - 2003
Table 23 - Market share by operator - 2003
Table 24 - Pacific Bangladesh subscribers - 1999 - 2003
Table 25 - GrameenPhone subscribers - 1998 - 2003
Table 26 - TMIB subscribers - 1998 - 2003
Table 27 - Mobile subscriber growth - 1997 - 2003
Table 28 - Mobile subscriber growth by region/circle - 2002 - 2004
Table 29 - Mobile services revenue - 1996 - 2003
Table 30 - Subscriber distribution by circle - April 2004
Table 31 - Market share/subscribers by operator - 2003
Table 32 - Mobile subscribers by operator - Metro Region - April 2004
Table 33 - Mobile subscribers by operator - Circle A - April 2004
Table 34 - Mobile subscribers by operator - Circle B - April 2004
Table 35 - Mobile subscribers by operator - Circle C - April 2004
Table 36 - Mobile subscriber growth - 1998 - 2004
Table 37 - Paging subscribers - 1998 - 2003
Table 38 - Mobile subscriber growth - 1999 - 2003
Table 39 - Mobile subscribers by operator - 2003
Table 40 - Mobile subscriber growth - 1995 - 2003
Table 41 - Mobile operator market share - 2001 - 2003
Table 42 - Mobile subscribers by operator - 2003
Table 43 - Mobile subscriber growth - 1995 - 2003

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