Spire Asean Telco Industry (8 Sept 2010 Final)

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A snapshot of ASEAN Telco Industry, Sept-2010. Presented at AmCham Singapore event, 8-Sept-2010

A snapshot of ASEAN Telco Industry, Sept-2010. Presented at AmCham Singapore event, 8-Sept-2010

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  • 1. AmCham Singapore The ASEAN Telecommunications Industry Prepared for: The American Chamber of Commerce in Singapore (AmCham Singapore) event Date: 8 September 2010 Prepared by:Prepared for: AmCham Singapore Date: 8 September 2010 Page 1
  • 2. Today’s Agenda: Asia Pacific Telecommunications Industry Overview of Telco Industry in Malaysia & Vietnam Case Study: Indonesia’s Telco Industry ConclusionPrepared for: AmCham Singapore Date: 8 September 2010 Page 2
  • 3. Asia-Pacific Telecommunications IndustryPrepared for: AmCham Singapore Date: 8 September 2010 Page 3
  • 4. Telecommunications in the Asia-Pacific Asia-Pacific Cellular Subscribers 2009 47% of 5 billion global mobile South Korea connections in Q2 2010 came from the China Asia Pacific region. 47.5 Million 747.38 Million Japan India 110.62 Million 525.15 Million Vietnam TOP 5 COUNTRIES IN ASIA PACIFIC: 111.4 Million Philippines Thailand Malaysia 72.8 Million #1 CHINA 69 Million 30.4 Million Singapore Indonesia #2 INDIA 6.9 Million 193 Million #3 INDONESIA Australia #4 VIETNAM South East Asia 25.5 Million represents approximately 25-30% of #5 JAPAN the total cellular market.Source: Published reports from GSM World, International Telecommunication Union, various journals & articles, and Spire’s data & analysis. Prepared for: AmCham Singapore Date: 8 September 2010 Page 4
  • 5. Overview Population & Teledensity Statistics 2009 Indonesia Malaysia Vietnam Population 231.37 million 27.9 million 86 million Households 58.4 million 6.3 million 18 million Cellular Subs 193 million 30.4 million 111.4 million Broadband Subs 4.4 million 16.9 million 2.97 million Population Teledensity Cellular 83.4% 108.9% 129.5% Broadband 1.9% 60% 3.5%Source: Statistics Indonesia, Department of Statistics Malaysia, General Statistics Office of Vietnam, Internet World Stats.Prepared for: AmCham Singapore Date: 8 September 2010 Page 5
  • 6. Overview Malaysia – Indonesia – Vietnam VIETNAM INDONESIA MALAYSIA Late Technology adoption: 10 GSM & CDMA operators 4 mobile operators. 3G services in 2009. 176 ISPs (registered to 6 ISPs (Fixed Broadband). Indonesian Internet 4G development plan in 4 Wimax operators. Service Provider 2010 Association in 2007) Government to target 50% Currently has 6 licensed household penetration by 1st Wimax operator 2010. cellular operator & 4 ISPs. 2010.Prepared for: AmCham Singapore Date: 8 September 2010 Page 6
  • 7. Telecommunications in Vietnam ROADMAP TO 4G 1992 1999 2003 2005 2009 2010 Establishment CDMA Rolling out of of mobile entered the 3G mobile market in market licenses Vietnam Prepaid Mobile Development service operators of 4G (Wimax entered the started to push or LTE) plan market for the implementation of 3GPrepared for: AmCham Singapore Date: 8 September 2010 Page 7
  • 8. Telecommunications in Vietnam CAPTURING THE 3G MARKET With the recent rollout of 3G Others licenses, the opportunity for CDMA 1% Vietnam’s mobile market is still OPERATOR high in terms of data services. S-Fone 6% BlackBerry MARKET Vinaphone service brought LEADER by Viettel in 24% Viettel October 2008 End of 2009 44% 111.4 million subs STATE- OWNED Viettel-Apple Mobifone signed the deal 25% to sell iPhone in January 2010Prepared for: AmCham Singapore Date: 8 September 2010 Page 8
  • 9. Telecommunications in Vietnam RAPID DEVELOPMENT IN RECENT TIMES US$ 5.9 Billion Having started off slowly, Vietnam’s mobile market has become very competitive. Leading operators work hard to attract more customers while retaining the existing ones. TARIFF US$ 3.9 Billion WAR II US$ 2.7 Billion TARIFF WAR I US$ 1.4 Billion US$ 0.95 BillionSource: Vendor’s financial reports, Secondary sources, Spire Internal data & analysis * Estimated revenue based on industry data in VN.Prepared for: AmCham Singapore Date: 8 September 2010 Page 9
  • 10. Telecommunications in Malaysia MOBILE OPERATOR CONSOLIDATION In the 1990s, there were 7 operators serving a population of around 20 million in Malaysia. This resulted in oversupply. TM Cellular TM Celcom TM Celcom TM Celcom Celcom Axiata MobiKom MobiKom DiGi DiGi DiGi DiGi Maxis Sapura Maxis Maxis TimeCel Time 1990s 2002 PRESENTPrepared for: AmCham Singapore Date: 8 September 2010 Page 10
  • 11. Telecommunications in Malaysia 50% BROADBAND PENETRATION BY 2010 Malaysia has one of the more advanced U Mobile telecommunications networks, with the 2% availability of technologies such as fiber optics, Wimax, digitalization & satellite services. Digi 25% Maxis 40% End of 2009 Mobile operators 30.4 million subs offering Mobile Broadband services. P1 Wimax became the first operator to Celcom launch commercial 33% Wimax services in August 2008.Prepared for: AmCham Singapore Date: 8 September 2010 Page 11
  • 12. Telecommunications in Malaysia 3G TO BRING NEW SPARK IN THE MARKET Malaysia’s mobile market has almost “paused”. 3G is expected US$ 6.6 Billion to push market growth. US$ 6.3 Billion US$ 5.7 Billion US$ 5.1 Billion US$ 4.6 BillionSource: Players’ financial reports, Secondary sources, Spire Internal data & analysis * Estimated revenue from 3 largest operators, represents at least 95% of the market in MY.Prepared for: AmCham Singapore Date: 8 September 2010 Page 12
  • 13. CASE STUDY ON INDONESIA 40 million internet users, only 15-20% subscribed to internet service. 1.4 million BlackBerry users as of Q2 2010. 55,000 iPhone users (operator bundled). 3,000 iPad users (yet to be officially distributed in Indonesia). WORLD’S LARGEST SOCIAL NETWORKING USER Ranked #6 in the top 20 for Tweeting activities. Jakarta: the Twitter capital in Asia. The 3rd largest Facebook country, with 26.2 million Facebook users.Prepared for: AmCham Singapore Date: 8 September 2010 Page 13
  • 14. Current Market Situation REACHING MARKET SATURATION Indonesia is an emerging market in the Telco industry. It is predicted that the Bakrie growth rate for 2010 will be around 10-11% Telecom compared to 2009. Others 6% 11% Estimated dual card user = 1 : 1.7 LEADING CDMA GSM operators: targeting the OPERATORS YOUTH segment Telkom Flexi Telkomsel 8% 42% End of 2009 MARKET 193 million subs LEADER XL Axiata 16% CDMA COMPETING FOR POSITION Indosat operators: #2 17% more into “affordability”Source: Vendor’s financial reports, Secondary sources, Spire Internal data & analysisPrepared for: AmCham Singapore Date: 8 September 2010 Page 14
  • 15. Current Market Situation DECLINING TARIFF, HIGHER PENETRATION The mobile market has seen strong US$ 11.1 Billion growth. The launch of 3G networks US$ 10.5 Billion has received a good response from US$ 9.5 Billion the market. US$ 7.8 Billion US$ 6.4 BillionSource: Vendor’s financial reports, Secondary sources, Spire Internal data & analysis * Estimated revenue from 5 largest operators, represents at least 80% of the market in ID.Prepared for: AmCham Singapore Date: 8 September 2010 Page 15
  • 16. Cellular Subscribers Growth OVER 200 MILLION SUBS AS OF Q2 2010 “Minutes 208,000,000 Factory” 193,000,000 Tariff war & New Interconnection 162,000,000 regulation Rise of Mobile Internet & BlackBerry “fever” Q208 Q308 2008 Q408 Q109 Q209 Q309 2009 Q409 Q110 2010 Q210Source: Vendor’s financial reports, Secondary sources, Spire Internal data & analysisPrepared for: AmCham Singapore Date: 8 September 2010 Page 16
  • 17. Broadband Market Milestones 2009 2007 EVDO entered the market. Unlimited 2010 Mobile Broadband access and prepaid Internet entered the scheme still in high market - a new Roll out trial of 1st demand. Wimax operator. The opportunity for telco operators with the market still tends to market saturation of revolve around 2006 prepaid unlimited voice & SMS. access. With the The rise of Broadband various packages internet, pioneered offered, the market is by Telkom Speedy, becoming more offering affordable aware of the service access amidst of high 2008 quality offered. priced services. Prepaid unlimited access introduced to the market by IM2, successfully captured large market share. Mobile Internet entered the market not long after Fixed Broadband entered the market. Fixed broadband penetration remains low, while Mobile Broadband penetration grew.Prepared for: AmCham Singapore Date: 8 September 2010 Page 17
  • 18. Data Services Revenue RISE OF MOBILE INTERNET SERVICE INCREASED DATA REVENUE DRIVEN BY: Data 2,311.41 Popularity of social networking application and Instant Messaging 22% supported by affordable phones, built by local manufacturers. 2008Revenue in million USD Cellular & Others 8,167.5 78% The growing number of BlackBerry, iPhone and Android users. Data 2,855.5 26% 2009 Cellular & Others Growing market for CONTENT and ONLINE GAMES, such as MMORPG, 8,289.52 which triggers the development of local content providers and local 74% online games. Source: Vendor’s financial reports, Secondary sources, Spire Internal data & analysis * Estimated revenue from 5 largest operators, represents at least 80% of the market in ID. Prepared for: AmCham Singapore Date: 8 September 2010 Page 18
  • 19. Broadband Subs Growth REACHED 7 MILLION SUBS IN Q2 2010 5,000,000 3,000,000 Device bundling Looking at the demand Market demand shifted packages for unlimited service, to Mobile Broadband, promotion ISPs started to offer the offering affordable and scheme same scheme as Prepaid easy-to-access service “Unlimited” Mobile Broadband 5,000,000 using USB modem service device 3,770,000 1,720,000 770,000 1,410,000 3,000,000 Fixed Broadband 2,100,000 Mobile Broadband 550,000 1,470,000 1,040,000 Q208 Q308 Q408 Q109 Q209 Q309 1,720,000 Q409 Q110 Q210 670,000 770,000 2008 1,410,000 2009 1,560,000 2010 470,000 1,200,000 870,000 990,000*Source: Vendor financial reports, Secondary sources, Spire Internal data & analysis 550,000 340,000 400,000Prepared for: AmCham Singapore Q208 Q308 Q408 Date: Q209 Q109 8 September 2010 Q409 Q309 Q110 Q210 Page 19
  • 20. BlackBerry Subscribers Growth OVER 1.4 MILLION BLACKBERRY USERS IN Q2 2010 Further reducing BIS tariff ranging 1,420,000 below US$10. Introducing limited BlackBerry service BlackBerry BlackBerry on Internet Demand: daily, Service weekly & offered at monthly tariff US$ 15-20 Q208 Q308 Q408 Q109 Q209 Q309 Q409 Q110*Source: Vendor’s financial reports, Secondary sources, Spire Internal data & analysis Q210Prepared for: AmCham Singapore Date: 8 September 2010 Page 20
  • 21. Broadband Growth Penetration THE HIGHEST GROWTH IN JAVA REGION +189% NORTH SUMATERA +102% EAST KALI- MANTAN The growth rate in the eastern part of Indonesia is +244% considerably lower, +206% affected by the lack of WEST Information Technology GREATER +244% JAVA development in the area. JAKARTA EAST JAVA +78% BALI +308% CENTRAL JAVAPrepared for: AmCham Singapore Date: 8 September 2010 Page 21
  • 22. Online Games Market in IndonesiaFROM LICENSING TO DEVELOPING LOCAL GAMES End of 1st Phase 2nd Phase First-person Shooter Action- fighting Facebook Golf 3D Local Game 1st 3D Music game 2003 – 2004 2005 2006 2007 2008 2009 NOWPrepared for: AmCham Singapore Date: 8 September 2010 Page 22
  • 23. In Conclusion… INDONESIA’S MOBILE AND BROADBAND MARKET WILL STILL SHOW A STRONG GROWTH Operators will likely to continue to MONETIZE the traffic, encouraging usage by offering bonuses to subscribers. The mobile market is expected to reach 360 million subscribers by 2015, with penetration of 144% of the population. Despite the saturation in the cellular market, the broadband market still has high potential to grow. With growing broadband subscribers, operators will need to increase bandwidth utilization. Implementation of NEW TECHNOLOGIES such as WiMax, EVDO Rev. B and LTE are expected to happen over the next 5 years. The success of 3G services in the market will depend on the ability of operators to offer desirable content that consumers are willing to pay for. Games developers, Application Service Providers and leading content and media providers will also benefit from 3G services.Prepared for: AmCham Singapore Date: 8 September 2010 Page 23
  • 24. Prepared for: AmCham Singapore Date: 8 September 2010 Page 24