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  1. 2007 /
  2. October-December 07 /

Asia’s mobile market diverse, dynamic

It has become increasingly important for mobile operators to understand Asia’s mix of high-growth emerging markets and mature saturated markets if they intend to be profitable.

November 9, 2007

Charles Moon, an analyst with Yankee Group, says: "The Asian market is diverse and includes the very poor and the very rich. The key to any operator's success is offering the right services and increasing the consumer's appetite, and need, for technology."

Ericsson is well positioned, especially in terms of managed services, to give an operator exactly the kind of support it needs to succeed in all parts of Asia, Moon said ahead of Mobile Asia Congress 2007 in Macau, China, November 13-15.

Asian markets are often broken down into three distinct market segments. The first includes Japan, Singapore and South Korea, where revenue is driven less by subscriber growth and more by data usage, such as video, ringtone downloads, text messaging and e-mail.

The second market segment includes Malaysia, Thailand and the Philippines. Market penetration in this part of Asia is high, but has been driven mostly by voice and text messaging. These users are less interested in video offerings and other high-bandwidth multimedia services.

Markets such as Vietnam, China, Indonesia and India are growing quickly and are dependent on subscribers. Growth in these countries is likely to remain high for years to come.

China, with its huge population and rapidly developing economy, is a real force in the region. Having become the biggest mobile market in the world, China will continue to expand its mobile subscriber base at a rate of nearly 10 percent per year from the end of 2006 through 2011.

"While China is depending on subscriber growth, the challenge there will be how to move beyond voice and into data," Moon says. "Operators in places such as China and India will have to expand their services with the users' technological appetite."

Users in China and similar markets may have lower purchasing power, but they represent a substantial growth opportunity because of their sheer numbers. Analysts agree that a significant portion of people with low incomes use mobile phones to support their small enterprises and are therefore more likely to spend a higher portion of their earnings on such services.

To take advantage of this market, new business models and technologies will be needed to address the growing number of users and the high proportion of low-income users.

By 2012 there will be about 5 billion mobile subscriptions worldwide, almost double the number today. The challenge will be to meet the needs of these new subscribers, who are more likely to earn USD 2 per day than USD 200 per day, an Ericsson study found.

Asia's mobile market has continued to grow steadily, passing the 1 billion subscriber milestone in late 2006. The market was expanding at an annual rate of almost 30 percent throughout much of 2007, a report by Research and Markets finds.

It says 3G mobile services are being rolled out in the major markets, with the developed markets taking a strong lead. The region's choice of internet access continues to move rapidly from dial-up to broadband, it reports.

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