Asia-Pacific Emerges as Largest Regional Telecom Market

Since the mid-2000s, it has been clear that the Asia-Pacific region will feature the greatest single concentration of communications customers and revenue mass of any region in the world, over the coming years.

So any supplier with ambitions to grow globally has to succeed in the Asia-Pacific region. That is a bit of a change from where growth drivers have been seen for much of the past decade.

Asia already by the mid-2000s was home to almost half the world’s fixed telephone subscribers. It had 42 percent of the world’s Internet users, and with 1.4 billion mobile cellular subscribers, it also had the largest mobile phone market share, according to the International Telecommunications Union.

By mid-2008, China and India alone had over 600 and 280 million mobile cellular subscribers, respectively, representing close to a quarter of the world’s total.

The Asia-Pacific region was the world’s largest broadband market with a 39 percent share of the world’s total at the end of 2007.

Telecoms retail revenue in the emerging Asia–Pacific (APAC) region was predicted to grow at a compound annual growth rate (CAGR) of seven percent between 2011 and 2016, according to Analysys Mason.

China and India together account for 68 percent of the region’s population, 64 percent of its active mobile SIMs and 75 percent of its total retail telecoms revenue.

Analysys Mason predicts that active mobile penetration rates in the region will rise to 95 percent by 2016, a 32 percent increase over 2011 levels. The number of active SIMs will increase from 2.33 billion in 2011 to 3.7 billion by 2016.

But it is 3G, not 4G, that will represent the bulk of mobile broadband customers. By 2016, 41 percent of active accounts in the region will be 3G, compared with just 11 percent in 2011.

Even by 2016, vendors cannot expect LTE devices to account for more than five percent of the active SIM base in the region.

Penetration will be slightly higher in China and Malaysia, at seven percent and eight percent respectively, slightly lower in India, Indonesia and Thailand (three percent), and even lower in Bangladesh and Pakistan.


And voice will be “mobile.” Some 90 percent of the voice connections will be supplied by mobile networks by 2016. Overall, the number of voice connections in the region will increase by 45 percent to 3.9 billion connections, with most of this growth coming from China and India, Analysys Mason predicts.

Average monthly revenue per user was about $7.40 in 2011. Mobile ARPU across emerging APAC markets will likely average $6.50 by 2016, the firm predicts.


Though Brazil, Russia, India, China and South Africa have been leading economic and communications adoption growth for much of the past decade, it now appears that those nations are reaching maturity, and that growth of communications services will be lead by a new list of nations in the emerging markets.

Overall, that growth–on a percentage basis–will likely be lead by countries in the Asia-Pacific region, exclusive of China and India.

Globally, emerging markets remain crucial for global telecom service provider growth. IDC predicts that emerging markets will contribute for 53 percent of 2012’s global information and communications technology growth.

And a poll of 675 global IT and business professionals suggests Indonesia, Vietnam, Qatar and Myanmar are the countries to lead that growth. But Israel, Iraq, Uganda and Cambodia were other countries also viewed as countries where growth could occur.

Notably, just five percent of respondents chose Brazil, Russia, India, China or South Africa as among the nations having the strongest growth, though the so-called BRICS nations have been at the top of global growth lists for some years.

Mobile will drive growth in the Asia-Pacific region, as elsewhere. But developing nations also will become the focus of broadband growth over the next decade or two, building on a substantial amount of growth since about 2005.



International Telecommunications Union data.

Netflix 3D Will Have ISP Implications

Netflix “Super HD” content, and new 3D content, should prove an interesting development for Internet service providers. Super HD is intended to provide a better picture quality than is currently available for streaming on 1080p HDTVs.

But Netflix also is adding 3D titles, which generally use up double the bandwidth for the same video length. That should be interesting, given average broadband speeds in U.K. markets., not to mention U.S. access markets. 

Google Launches Free Wi-Fi in Chelsea, New York

Google is offering: free public Wi-Fi in the Chelsea neighborhood of New York, which spans Gansevoort Street and 19th Street from 8th Avenue to the West Side Highway, including the Chelsea Triangle, 14th Street Park, and Gansevoort Plaza. 


Google and Boingo had earlier in the summer of 2012 collaborated to provide free Wi-Fi at some subway locations and Boingo hotspots in Manhattan. 

Some will continue to hope that Google will get into the Internet access business more fully, as an ISP, but many of us think that is highly unlikely. Google's objective is to goad all other ISPs to upgrade their access networks. 

Diverting huge amounts of capital into its own ISP facilities would be a low-value way for Google to spend its own money. 

Maintenance Now Driving Fiber to Home Conversions

Verizon has for some time been deploying optical fiber for maintenance reasons, such as when a customer has two trouble calls in any six-month period, and where optical fiber trunking already is in place. 

In some cases, an entire neighborhood might be converted to FiOS access if a sufficient number of households in an area are hitting the "two calls in six months" threshold. In 2012, Verizon converted about 200,000 households to fiber, based on that standard. 

Europe Mobile Voice Calling Minutes Declined 4.5% in 3rd Quarter 2012

In most countries around Europe, mobile voice minutes of contracted up to 4.5 percent quarter-on-quarter, in the third quarter of 2012. Similarly, text messaging was down between -0.5 percent and -7.8 percent, quarter over quarter, ABI Research says.  

Monthly average revenue for Western European service providers also continued to decline in the third quarter of 2012.

Significant regional variations can and do exist in the global telecom business, though. The largest U.S. mobile providers, for example, seem to be able, at least for the moment, to turn in predictable growth in revenue, quarter after quarter, as third quarter 2012 Verizon financial results indicate.


In Western Europe, competition is having the opposite effect, reducing revenue. In fact, argues STL Partners, mobile service provides in Spain, Italy, France, Germany and the United Kingdom stand to lose as much as 50 billion euros over the next seven or so years.

Verizon, in contrast, reported double-digit increases in operating income and earnings. Wireless segment revenue grew more than seven percent, year over year, while prepaid wireless revenue grew nearly 43 percent, year over year. Fixed network revenue in the consumer segment also grew, despite the ongoing trend of voice line abandonment.

AT&T Announces Record Smartphone Sales

AT&T says it sold more than 10 million smart phones in the fourth quarter of 2012, topping its previous record quarter of 9.4 million, set in the fourth quarter of 2011. 

This included best-ever quarterly sales of Android and Apple smart phones.

That said, the rest of world is where smart phone growth will be most extensive over the next decade. 

In part, that is because there are so many feature phones in use that can be upgraded. 

CES is "Post Smart Phone"

It is starting to look as though CES is not a "mobile" show, in the sense of it being a venue where major mobile product, software or service introductions should be expected. In that sense, it makes more sense that CES staffers talk about having reached the "post smart phone era."

What they might really mean is that CES has reached the post smart phone era. To be sure, there will still be reasons for many whose business is consumer electronics other than phones and tablets and mobility to be there. 

But the time when either computing devices or phones were key elements of the meeting likely has passed. 

I learned many years ago that when a smart and experienced executive says "something cannot be done," that statement has to be interpreted. It means "my organization cannot do that." 

Such statements never reflect another firm's ability to achieve something, only one specific entity's inability to do so. One might note that CES also is "post PC" in the same sense. What is really important for the future of computing probably does not show up at CES, either. 

In a similar manner, CES now appears to be unable to sell itself as a major venue for "mobile" interests. So there is a reason why CES staffers might say the "world has gone post smart phone." 

What that really means is only that CES has gone "post smart phone," in the sense of not being a place smart phone interests "need to be."

Source: http://www.economist.com/blogs/dailychart/2011/10/personal-technology

2. Mobile devices will exceed PCs and Internet Desktops over time. Morgan Stanley expects 10+ Billion devices till 2020:

Mobile devices are not limited to smartphones or tablets. It is a broader range like eReaders, MP3, Cell Phone, Car Electronics, Games, Wireless Home Appliances etc.

Source: http://www.morganstanley.com/views/perspectives/tablets_demand.pdf

3. Tablets are the biggest driver today and gain momentum in the enterprise as well.

4. The majority of time spent on PCs is consuming content which has a significant usage overlap with mobile devices. Tablets will reduce the PC consumption usage over time.

Source: http://www.morganstanley.com/views/perspectives/tablets_demand.pdf