Technology

Asia-Pac mobile subs to cross 1 billion this year















MUMBAI: Asia-Pacific remains one of the few high-growth mobile markets in the world. Apart from the vast subscriber base, much of this growth is driven by drastically reduced calling rates, decline in handset prices and the expansion of network infrastructure in the emerging markets of India and Indonesia.


As at June 2006, India has overtaken Japan as the second largest mobile services market in Asia-Pacific in terms of subscribers, after China.


In fact, with 142.7 million subscribers in 2006 and a mobile penetration rate of only 13 percent, the market in India still remains largely untapped.

 

New analysis from global growth consulting company, Frost & Sullivan, Asia Pacific Mobile Communications Outlook 2007, reveals that the market - covering 13 major Asia-Pacific economies - grew at a compound annual growth rate (CAGR) of 24 per cent between 2002 and 2006, reaching a subscriber base of 0.95 billion in 2006. At a mobile penetration rate of 30.9 percent in 2006, the Asia-Pacific mobile subscriber base is estimated to reach 1.14 billion by end-2007, driven by the robust growth in emerging markets.


"The impact of the emerging markets on the rest of the region is likely to grow in significance as regional carriers search for sustainable growth, and as economies of scale further drives down 3G handset prices," notes Frost & Sullivan industry manager Janice Chong. "Of the expected 190 million net subscriber additions in 2007, 90.8 percent is likely to stem from the emerging markets."

 

With most major cities in emerging markets reaching high mobile saturation, the focus rests on increasing mobile penetration in rural areas and the lower-end segments in the next three to five years. The series of price cuts in voice minutes and the introduction of low-entry one-nation call rate plans in 2006 prove that raising the affordability rates among the masses is increasingly important to penetrate into the lower-end market, which holds strong growth potential for Asia‘s cellular industry.

Mobile broadband is likely to be the next killer application in Asia‘s promising mobile landscape. However, given its limited bandwidth, the current 3G network may not necessarily be the ideal technology for mobile broadband. The business case for 3G may not lie in 3G itself, but in 3.5G or commonly known as high speed downlink packet access (HSDPA), as 3G ultimately provides a platform for enabling 3.5G.

"HSDPA and WiMAX (worldwide interoperability for microwave access) are expected to play a prominent role in 2007, given the number of trials that have taken place in 2006," cites Chong. "These, together with pending issues such as fixed-mobile convergence (FMC), mobile number portability (MNP), and mobile broadband, are believed to be the major factors that can potentially change the competitive landscape of the telecommunications industry."

While the launch of HSDPA has taken precedence in certain countries, WiMAX is likely to be the focus in emerging markets such as India and Indonesia, which lack telecommunications infrastructure.

Elsewhere, WiMAX is expected to remain a niche technology, functioning as a backhaul infrastructure to complement existing WiFi (wireless fidelity) networks, and as an alternative wireless broadband access targeting the higher ARPU (average revenue per user) enterprise segments. This is mainly due to costly customer premise equipment (CPE) and the limited availability of WiMAX-enabled handsets and laptop devices, which are expected to be the biggest market restraints until 2009.

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