CELLULAR: Wireless Decade, Maybe Even Millennium

Of the previous decade was known as the ‘Internet Age’ then the present

decade can rightly be referred to as the ‘Wireless Decade’. Wireless

technology and its devices have penetrated the worldwide market immensely,

especially in the Asian continent. There are signs that Asia is moving into the

vanguard of the wireless industry, with 46 percent penetration rate in Japan, 60

percent in South Korea and Hong Kong, about 70 percent in Finland and 4 percent

in China. Moreover, the Yankee Group predicts that wireless subscribers in

Asia-Pacific will hit 575 million by 2005, thereby surpassing Europe as the

world’s leading mobile communications market, with a CAGR of 20 percent.

Asia to Shine

Interestingly, it is expected that China will lead the market. The Strategis

Group indicates that there were about 52 million wireless subscribers in China

in the second quarter of 2000 and that there will be a total of 120 million

subscribers by the end of 2001. The absolute number of subscribers in China is

second only to Japan.

Apart from China, Philippines and India have also registered a strong growth

year after year. The former had 6.3 million mobile subscribers in 2000 (up by

132 percent), while the latter surpassed 3.1 million subscribers to register a

growth of 97 percent. Though India lacks effective industry governance which has

deterred many foreign investors, operators are broadening their coverage. And

there are signs that usage of mobile telephony will pick up.

According to the Yankee Group, about 40 percent of the global wireless

infrastructure spending from 2001 to 2005 will be generated, particularly from

Japan and China. The other major markets identified are Korea, Taiwan,

Australia, Hong Kong, Singapore, Malaysia, Philippines, Thailand, India and

Indonesia. Among others, Singapore will be aggressive in seeking m-commerce

applications. ITU states that Philippines is the region’s largest pre-paid

market, with over 80 percent of mobile cellular subscribers using airtime call

cards. The key reasons identified for wireless penetration in Asia-Pacific are–robust

economic growth expanding addressable population base, key drivers for mobile

adoption in the telecom deregulation, pre-paid services, decreasing handset

prices and service charges, and the development of mobile data services.

Mobile Internet services are gradually being introduced across the region.

Most offerings have been based on WAP. In Singapore, mobile operators are

eagerly promoting WAP and have been actively recruiting content providers for

their WAP portals. Even Australia, Malaysia, New Zealand and Taiwan-China have

launched WAP services. Others like Indonesia, India and Thailand are on the line

of testing.

Markets for handsets and terminals vary throughout the region. In some

countries, the market is for handsets for new users, but in countries with a

high adoption rate, it is not the first-time users who are buying terminals, but

subscribers who are, perhaps, looking for replacements. The In-Stat Group

predicts that the sales of Internet-ready wireless phones will surpass 1 billion

annually by 2004, and by 2002, virtually all wireless phones will be pre-loaded

with mini browsers and will be Internet-enabled. The Strategis Group has

identified various markets for wireless Internet in Asia-Pacific, these include–operators,

telecom regulators and authorities, handset manufacturers, ASPs, wireless

portals and content providers, and those who need a deeper insight into the

market for investment, policy-making, and/or Internet strategy planning.

The In-Stat Group predicts that 3G services will make up just 4.7 percent of

worldwide wireless market in 2001and if the market continues to grow at the same

pace then the share can reach 50 percent in 2005. The In-Stat Group further

predicts that the Japanese market will be the first to widely deploy 3G

services, but will not have nationwide coverage until late 2002.

Each operator in each country in Asia-Pacific has his own approach in

providing a basic mobile Internet infrastructure. Gartner foresees wide market

differences and approaches in creating attractive wireless web services across

the region. Some such as i-mode are leading, others offer bare connectivity. All

are constrained by government approaches to licensing spectrum to provide 3G

services.

The immense research work depicts that Asia is the next leader–a mobile

powerhouse as far as wireless penetration is concerned, and China is likely to

win the race.

Nishu Rastogi