The booming economies of China and India are fuelling the growing demand for telecommunication services in the Asia-Pacific region.
New analysis from global growth consulting company, Frost & Sullivan (www.communicationsservices.frost.com), Benchmarking of Service Providers in Asia Pacific, reveals that the Asia-Pacific telecommunication services market - covering 12 major economies ex-Japan - which includes fixed, mobile, Internet and data communications services, earned revenues of US$181.4 billion in 2006, and is estimated to reach US$298.2 billion by end-2012.
Mobile services accounted for the bulk of telecom revenues in 2006 at 61.3 percent, while fixed, Internet and data communications services accounted for 25.4, 8.9 and 4.4 percent respectively.
Fixed telephony subscribers in Asia-Pacific totaled 402.2 million in 2006, and is forecasted to grow at a CAGR (compound annual growth rate) of 2.7 percent from 2006 to 2012, driven mainly by the subscriber growth in China and India.
"While the number of fixed-line subscribers are already on a steady decline in most Asia-Pacific countries, markets such as China, India, Indonesia and Thailand, which have large populations and low household penetration rates, continue to experience growing subscriptions," says Frost & Sullivan research analyst Karpagam Palaniappan.
Asia-Pacific has remained one of the few surviving high-growth mobile markets at a time when the cellular industry is fast approaching saturation globally. In 2006, the cellular subscriber base was 819.5 million (ex-Japan) and is forecasted to reach 1.68 billion by end-2012, at a CAGR of 10.8 percent (2006-2012). The region's robust growth is fuelled by China, India and Indonesia.
Mobile operators in China, India and emerging markets such as Indonesia and the Philippines are now moving into the untapped rural areas to take advantage of the low penetration rates and sustain growth.
Nevertheless, the telecom industry in Asia-Pacific is challenged by deregulation, economic conditions, inadequate awareness of emerging technologies, low household penetration levels, and service quality issues. This negatively impacts both consumers and service providers.
"A case in point is the huge success of IP telephony globally and its relatively low impact in Asia-Pacific due to regulatory uncertainty, lack of bandwidth, interconnection, and quality of service issues," says Palaniappan. "Similarly, technologies such as 3G, WiMAX and FTTx (fiber-to-the-exchange), which are rapidly gaining popularity worldwide, are only just emerging in Asia."
Intense competition and market consolidation coupled with innovations and investments in emerging technologies, as well as improving the quality of customer service are likely to be the key factors shaping the growth of the telecom industry.
The Benchmarking of Service Providers in Asia Pacific study is part of the Communications Services subscription and includes research on the following countries: Australia, New Zealand, China, India, Thailand, Hong Kong, Taiwan, South Korea, Singapore, Malaysia, the Philippines, and Indonesia. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants. Analyst interviews are available to the press.
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