Frost&sullivan analysis of universal broadband access


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Frost&sullivan analysis of universal broadband access

  1. 1. Universal Broadband Access 1st March , 2010 Adeel NajamSenior Industry Analyst, ICT Practice Frost & Sullivan Asia Pacific Confidential 1
  2. 2. Broadband Access : The key gapsUniversal broadband access requires overcoming 3 key gaps APAC snapshot 2.4 bn Desirability Gap Affordability Gap Availability Gap 630 mn 270 mn 180 mn Mobile subs Internet users Broadband Broadband HHs capable/affordab ( < 1 Mbps ) Another billion to 2/3 is cybercafe le HHs be added 2
  3. 3. Southeast Asia’s Wireless Market Maturity in ContextMost of Southeast Asia’s telecom markets have a maturing wireless market (penetration > 50%) anda fledgling broadband market (penetration <5%). 160% Hong Kong 140% Singapore Mobile Penetration Rate (%) 120% Taiwan New Zealand Australia 100% Thailand South Korea Malaysia Indonesia 80% Vietnam Japan Philippines 60% Pakistan Sri Lanka China 40% India “The Digital Divide” 20% Bangladesh 0% 0% 20% 40% 60% 80% 100% Household Broadband Penetration Rate (%) 3
  4. 4. Mobile players attack the market with HSPAWireless players are trying to gain market share through aggressive pricing in growing broadbandmarkets Fixed substitute Fixed complement Mobile-only Similar performance to fixed Cheaper than fixed operator broadband at lower prices broadband • O2 Ireland • M1 Singapore • ONE Austria • FET Taiwan Lower prices bundled with Capped usage similar prices fixed and lower download and bundling with fixed limits – Mobikom in Austria • TeliaSonera (Sweden) Integrated operator In markets like Indonesia and More expensive than fixed Philippines, • KT in Korea Growing broadband market Saturated broadband market 4
  5. 5. Is it succeeding ?Mobile broadband is gaining between 30-50% of incremental broadband additions in most marketsafter launch of HSPA and 3G data cards Mobile broadband’s share of incremental broadband Wider coverage and UMTS to HSPA migration USB Dongles gaining incremental broadband share Flat rate pricing packages 5
  6. 6. Outlook of mobile broadbandMobile broadband has a larger addressable market , technological scale and goodincremental rollout economics at sub 1Mbps speedsSpeeds Larger addressable Market • PCs, laptops, netbooks and smartphones FTTH • User ARPU rather than HH ARPU • Shipments of netbooks plus smartphones to overtake PC shipments in 2010 globally Technological Stability ADSL 2+ LTE • Clear roadmap to LTE • Over 230 HSPA deployments • Global scale and support HSPA Competitive at Sub 1 Mbps speeds ADSL • Urban centers • Sweating of 3G network UMTS investments 6
  7. 7. An attractive virtuous cycle is shaping upThe next phase of affordability will be driven by a mix of strong demand and supplydrivers Economics Services • Smartphones at sub $ • Richer Service 150 dropping to $ 100 Portfolio in coon • Application stores • Pricing plans/ prepaid by third parties models < $ 10 pm • Greater stimulation • Netbooks/tablets < $ 400 • Over 200 3G deployments • Greater data usage • Vendor consolidation • Network/Viral Effects • Fewer OS • Average data usage • Touchscreen on smartphones • Cloud computing Technology Adoption 7
  8. 8. Perception towards internetPerceptions towards internet do not differ much Source: 1925 respondent survey done in a transition economy 8
  9. 9. Key challenges Spectrum and • Convergent licensing Licensing • Fair pricing of resources/ spectrum refarming • Economies of scale • Move towards true private public partnership USO funds usage • Better frameworks • Low ARPUs Business Models • Low device penetration • Poverty Alleviation versus broadband access Govts mindset • Employment generation 9
  10. 10. Our Perspective • Most governments are not sure of rural internet initiatives as there has not Background emerged any successful business cum implementation model for proving the economic benefits due to the internet penetration in rural markets • Governments need to be shown a few successful Business models which will drive internet usage and clearly show the Value-added to the economy due to the Solution increased usage of Internet in those scenarios • These successful case studies need to be highlighted and used to influence the governments broadband policies for rural economies esp. in Asia and Africa • Creation of specific models based on different rural setups • Implement different Business models in identified test-bed setups where the Business models are driven by the nature of the market , economic driver and key Key steps restraints in those markets • Prepare a Business Case for governments highlighting the need for different approach top Internet penetration in different rural setups 10
  11. 11. Additional InformationDonna Jeremiah Carrie LowAssociate Director ExecutiveCorporate Communications Corporate Communications(603) 6204 5832 (603) 6204 carrie.low@frost.comAdeel Najam Jessie LohSenior Industry Analyst ManagerTelecom GPS-ICT Asia Pacific Corporate Communications(65) 6890 0923 (65) Confidential 11