Mobile Broadband Becomes an Imperative Strategy for Mobile Operators in Asia/Pacific

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Mobile services market in Asia Pacific excluding Japan (APeJ) region is considered as a very dynamic market compared to other regions, from emerging to mature market. Many mobile operators have been struggling for quite some times to maintain growth in revenue, especially on voice services revenue. From 2012 to 2017, IDC projects that the growth rate for voice services revenue in APeJ will slow down and achieve a compound annual growth rate (CAGR) of 2.5%. However, data connectivity or mobile broadband revenue will grow at a CAGR of 19.3% from 2012 to 2017.

IDC attributes the growth of data revenue in APeJ to three key areas: smartphones penetration with affordable prices; rollout of 3G and LTE licenses; and mobile user behavior towards 'Over-The-Top-Players' (OTTP) services. OTTP refers to delivery of instant messaging, video, audio and other media over an open Internet/broadband connection directly to user, without the need for carriage negotiations and without any infrastructure investment on the part of the provider. The provider may be aware of the contents of the Internet Protocol packets but is not responsible for, nor able to control, the viewing abilities, copyrights, and/or other redistribution of the content.

"Growth pace for data connectivity in 2014 will continue to be strong and we expect the market to reach USD141.2 billion by 2017. LTE subs will hold the highest five-year CAGR of 44.3% compared to other mobile technology, and Singapore will lead the growth in the region and achieve a CAGR of 103% in 2017. With this trend, mobile broadband has already become an imperative strategy for operators, considering the high investments and to offset revenue losses from OTTPs," says Ashadi Cahyadi, Senior Research Manager at IDC Asia/Pacific Telecommunication Group.

According to IDC Asia/Pacific Semiannual Telecom Services Tracker 1H2013, the total mobile services market revenue in APeJ will reach USD271.4 billion by 2014. Asia's most populated countries like China and India will continue to make up the largest shares in the market. Meanwhile, emerging countries like Indonesia, Thailand and Philippines are the top three countries leading the revenue growth in 2014.

"Like other mature markets in Europe or North America, the hype of mobile broadband services will lead into the same classic problem which is bandwidth as a resource," adds Cahyadi. "Having better understanding on what customer wants and their behaviors in terms of data usage will help the operators not to fall into the trap of unlimited broadband plans."

IDC also sees the impact of heavy deployment of 3G and 4G infrastructure on traditional messaging services, like SMS and MMS. The revenue on this kind of services is expected to decline at a CAGR of around -7% in 2017, from US$27.8 billion in 2012 to USD19.5 billion in 2017. Therefore, it's also important for the operators to start looking opportunity partnering with OTTPs to cover this potential revenue loss.

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