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Mobile subscriber base approaches 1 bn in APac; India & Indonesia to fuel growth

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MUMBAI: Unlike the trends that are sweeping across the global cellular market, the cellular subscriber growth in the Asia Pacific region is poised to see continued double-digit growth in the next three years. The region's mobile industry is estimated to grow by 22 per cent in 2006 to reach close to a billion subscribers by year-end, including Japan's 100 million subscribers.

Given the markets' infancy and vast population base, India and Indonesia are likely to fuel a significant portion of the growth. The implementation of "lifetime validity" in India, as well as the ongoing network expansion into rural areas in developing cellular markets will further help sustain the mobile industry's high growth in the region.

New analysis by global growth consulting company Frost & Sullivan, Asia Pacific Mobile Communications Outlook 2006, reveals that the mobile subscriber base -- covering 12 major Asia Pacific economies excluding Japan -- totaled 677.5 million in 2005 and is expected to reach 826.6 million by end-2006.

Although the growing popularity of prepaid services has been a major driver of subscriber growth in the region, the influence of low-end market is likely to be more pronounced in the coming years. Factors contributing to the growth of the low-end market include the launch of low-cost entry-level mobile handsets, the move into rural areas for long-term sustainable growth, the continuous price cuts in call rates and the introduction of affordable flat- rate pricing plans.

"With call charges typically accounting for more than 75 per cent of the total regional mobile revenues, Asia Pacific's cellular industry is highly voice-centric. However, in view of the declining growth in voice revenues and the stiff competition from alternative voice applications, mobile data is seen as the next wave of growth for mobile operators in the region," said Frost & Sullivan industry manager Janice Chong.

Notably, the wireless quarter will largely dictate future growth in the Asia Pacific telecommunications industry. The emergence of broadband wireless access (BWA) in Hong Kong and Singapore, the anticipated commercial launch of wireless broadband (WiBro) in South Korea, the numerous WiMAX (wireless interoperability for microwave access) trials, as well as the harmonisation efforts of WiBro with WiMAX further underscore this trend. Much of the parley in 2005 would transform into deployment in 2006, while full commercial rollouts are likely only in 2007.

Despite the emergence of such new technologies, the 2G/2.5G mobile subscriber base is expected to continue contributing significantly to the overall growth of the industry, given its near-term market dominance. In order to accelerate the migration from 2G/2.5G to the 3G platform, 3G operators would need to continue emphasising on inexpensive voice and offer aggressive 3G handset subsidies.

"At a time when most regional cellular industries are fast approaching saturation, Asia Pacific remains one of the few surviving high-growth markets. Although this highly competitive market is plagued by constant price war and short product life cycles, it is far from being saturated," added Chong.

The Asia Pacific Mobile Communications Outlook 2006 is part of the Mobile and Wireless subscription. It provides an insight into the current market environment and discusses the anticipated developments in the Asia Pacific mobile communications industry in 2006. Apart from an analysis and outlook of the overall regional market, the study provides a detailed analysis and outlook/implications across 12 countries. This will provide market participants with the necessary market intelligence to identify and evaluate market opportunities, as well as develop winning go-to-market strategies.

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