Hong Kong Looks to the Youth to Drive Data Services

Hong Kong has one of the highest mobile penetration rates in the world. About 5.9 million people (at the end of 2002 which is more than 80% penetration) own a mobile phone as compared to about 3.9 million business and residential phone lines. Culture, lifestyle and significantly cheap voice rates has meant that Hong Kong mobile phone users are more likely to remain talking. Frost & Sullivan believes that young adults and teenagers will drive mobile application growth as they are less entrenched in voice-centric behavior.

Based on Frost & Sullivan's Asia Pacific Mobile Applications Market Report, the revenues in the Hong Kong mobile data application market amount in 2001 amount to US$44.2 million which is only about 2% of the total mobile revenues of US$2, 209.7 million in the same year. This percentage is expected to expand to 7.7% of the total mobile revenues at the end of 2006 at US$ 207.8 million.

"Amidst stiff competition amongst mobile operators, the Hong Kong market faces widespread low awareness of data applications, mediocre marketing efforts by operators to stimulate change in voice-centric behavior, high internet penetration and growing interest in broadband. The global economic uncertainly has left people more conservative in adopting new services and slightly more price conscious, " said June Liang Pui San, Wireless Program Leader at Frost & Sullivan, Asia Pacific.

June Liang observes that Peoples Telephone, SUNDAY, CSL, SmarTone, Hutchison Telecom and New World Mobility provide a wide range of mobile data services to mobile users targeting the 15-35 age group that are more likely to adopt data services. For Example, SmarTone's comprehensive mobile banking and financial applications SUNDAY's fun, cupid, sports and concierge categories are ways in which mobile operators are targeting niche segments to entice the younger set to drive applications.

Messaging applications continue to be the highest contributor to revenues but the proportionate increase is highest in the Information and Entertainment applications which emerge as the second largest contributor. Within this segment, revenues are driven by entertainment applications predominantly comprising ring tone/waiting tone and character or icon downloads. Dating, games, information and directory applications are also becoming increasingly popular.

Messaging services are more popular among the younger segment. Users under-22 years recorded the highest usage of mobile messaging service. This group of users although comprising less than 20 percent of the total number of mobile subscribers in Hong Kong is the fastest growing group and is showing a higher acceptance for data services. This is expected to potentially translate to higher data ARPU in the future, compared to more mature users who merely use their mobile phones for voice calls.

"The average age of mobile subscribers will keep decreasing till the end of forecast period, as most newly added users are young people from 13-20 years old. Compared to the older generation, they are more willing to adopt new technology and new services," predicts Pui San."

Posted to the site on 23rd April 2003