New analysis from global growth consulting company, Frost & Sullivan, Asia Pacific Fixed Communications Outlook - Internet Access Services Market, reveals that revenues in this market - covering 13 major Asia-Pac economies - totaled US$24.6 billion in 2005 and can reach an estimated US$40.3 billion by end-2012.
As a result of the rapid end-user migration, broadband has now surpassed the narrowband subscriber base, accounting for 53.3 percent of total Internet subscribers in 2005. The broadband subscriber base is forecasted to further grow at a CAGR (compound annual growth rate) of 12.7 percent from 2005 to 2012. By end-2012, broadband subscribers are expected to account for more than 80 percent of the total Internet subscriber base in the region, with much of this growth stemming from Southeast Asia, China and India. China alone is expected to account for more than 45 percent of the region’s broadband subscribers in 2012.
“xDSL (x digital subscriber line) continues to be the predominant access technology which accounted for 67.2 percent of the total subscriber base in 2005,” notes Frost & Sullivan industry analyst Krishna Baidya. “Although FTTx (fiber-to-the-x) is also gaining popularity in the region, its development (in terms of subscriber base) is likely to pale in comparison to xDSL in the medium term due to the high investment cost.”
Notwithstanding the favorable outlook, broadband home penetration in Asia Pacific is still low at only 9.8 percent in 2005. Low PC literacy and Internet usage along with affordability issues, and the slow unbundling of the local loop and poor broadband infrastructure have restrained growth to a large extent beyond the tier-1 markets (Japan, South Korea, Hong Kong and Singapore).
“As the broadband access services market develops and matures, market forces are likely to lower the prices for broadband access services,” says Baidya. “This will mean lower profit margins, necessitating service providers to create new revenue streams by expanding their range of services.”
Although much of the subscriber growth in the Asia Pacific Internet access services market is expected to come from the developing markets, it is the developed markets that are likely to have a greater influence on revenue growth. While increasing bandwidth presents opportunities for service providers to introduce services such as VoIP (voice over Internet Protocol), IPTV (Internet Protocol television), video communications and home networking, it is important for service providers to introduce these services in a timely manner to avoid user frustration, which could raise skepticism on broadband.
