Mobile Economy Report Highlights Slowing Growth in Asia Pacific

Copyright © 2018 GSM Association
Asia
Pacific
The Mobile Economy
2018

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EXECUTIVE SUMMARY 2
1 INDUSTRY OVERVIEW 8
1.1 Mobile adoption growth slowing 10
1.2 4G takes the lead, while 5G commercialisation approaches 17
1.3 Scaling the Internet of Things: 11 billion connections in Asia Pacific
by 2025
19
1.4 Muted revenue outlook, while capex sees calm before 5G storm 21
1.5 Mobile delivering economic growth 23
2 MOBILE DRIVING AND ENABLING INNOVATION
IN A FAST-EVOLVING ECOSYSTEM
28
2.1 Asia Pacific taking the lead on 5G 29
2.2 Digital commerce is on the rise 31
2.3 Tech startup ecosystem is growing rapidly 34
3 MOBILE ADDRESSING SOCIAL CHALLENGES 36
3.1 Connecting the unconnected 36
3.2 Delivering greater impact for social initiatives 41
4 ADVANCING DIGITAL SOCIETIES IN ASIA PACIFIC 44
4.1 Identity as the cornerstone for a digital society 46
4.2 Fostering trust in the digital environment 46
Contents
Contents 1

Mobile adoption growth slowing
Executive
Summary
Asia Pacific has been the biggest contributor
to global subscriber growth in recent years
and still has room for growth. As of the end
of 2017, there were 2.7 billion unique mobile
subscribers in Asia Pacific, accounting for two
thirds of the region’s population. More than
half the world’s mobile subscribers live in Asia
Pacific – mostly in China and India.
However, growth has reached its peak and
has started to taper out: between 2017 and
2025, the subscriber base is set to increase
by a CAGR of 1.8%, down from 6.0% over the
previous four years. Three key factors explain
this slowdown:
• the region is home to some of the
most penetrated markets in the world,
with minimal opportunity for further
subscriber growth
• the region includes markets with very low
penetration levels, where socioeconomic
issues such as rapid population growth,
poverty and inequality, unplanned
urbanisation and natural disasters create
barriers to mobile adoption
• some markets have seen their previously
strong growth stagnate due to the
challenges of connecting those still
unconnected, particularly poorer and
rural communities.
Despite reaching its peak in terms of
subscriber growth, Asia Pacific will account
for just over half of new subscribers globally
by 2025. We forecast 424 million new
subscribers to be connected across the region
by 2025, bringing the total to 3.2 billion, or
73% of the population.
The Mobile Economy Asia Pacific 2018
Executive Summary2

4G takes the lead, while commercial 5G approaches
Asia Pacific is rapidly migrating to higher
speed mobile networks, with mobile
broadband (3G and above) becoming the
dominant technology by the end of 2016. 4G
is the primary driver of this shift, overtaking
2G to become the leading mobile technology
by share of total connections in 2017. The
region is home to some of the world’s most
advanced markets in terms of 4G adoption,
such as South Korea, Japan and Australia.
However, emerging markets (including India,
Bangladesh and Indonesia) will be the key
drivers of 4G growth over the next few years.
Across the region as a whole, 4G is expected
to surpass 50% of connections by 2019 and
will then dominate to 2025.
Meanwhile, 5G will gain a foothold in the
region by the end of the decade. With
launches expected from 2019, networks
covering 37% of the population by 2025, and
increasing availability of 5G-enabled devices,
5G connections will scale rapidly, particularly
in markets such as China, South Korea,
Australia and Japan. By 2025, we forecast 5G
connections to reach 675 million across Asia
Pacific, accounting for more than half of the
global total for 5G.
Although hype around the potential
opportunities of the 5G era is at an all-
time high, actual business cases are more
restrained, with an initial focus on enhanced
mobile broadband services, supplementing
the capacity and capabilities of existing 3G
and 4G networks. 5G’s next phase will lay the
foundation to support massive connectivity
and/or low-latency services such as IoT,
critical communication services, virtual reality,
and a diverse wishlist of future use cases and
innovations. However, certain issues need
to be tackled, including technical hurdles
(such as security, interconnect and roaming),
identification of business models and the
development of standardised solutions. Only
once these are addressed will some of the
more sensationalised and ambitious services
become a reality.
In parallel, we expect adoption of
smartphones and IoT to continue unabated in
Asia Pacific over the next few years, with 3.9
billion smartphone connections and 11 billion
IoT connections by 2025 (up from 2.5 billion
and 2.8 billion in 2017 respectively).
Executive Summary 3

Mobile essential to addressing social challenges
The large-scale societal adoption and use
of digital technologies is a key driver of
measurable economic, social and cultural
value, including increased productivity, a
rise in employment rates, improved security
and greater capacity to tackle social and
environmental issues.
Despite rapid growth in mobile internet
penetration in recent years, 2.4 billion people
in Asia Pacific remain offline, mostly in
low- and middle-income countries, unable
to benefit from the social and economic
opportunities of the internet. As challenges
around infrastructure, affordability, consumer
readiness and content are addressed, an
additional 1 billion people will gain access
to the mobile internet across the region by
2025, bringing the total to 2.7 billion, or 63%
of the population.
Mobile is also playing a key role in tackling
various social and economic challenges
as outlined by the UN’s Sustainable
Development Goals (SDGs). While the
mobile industry’s contribution can be seen
across all 17 SDGs, there are two areas of
particular relevance in Asia Pacific: firstly,
leveraging mobile operators’ big data
capabilities to address humanitarian crises,
including epidemics and natural disasters;
and secondly, supporting initiatives in low-
and middle-income countries to reduce the
gender gap in mobile internet and mobile
money. Mobile technology provides access
to tools and applications that help address
these issues, and enables new technologies
and innovations to build more efficient and
environmentally sustainable societies.
Mobile contributing to economic growth and enabling innovation
In 2017, mobile technologies and services
generated 5.4% of GDP across Asia Pacific, a
contribution that amounted to $1.5 trillion of
economic value added. In addition, the mobile
ecosystem supported more than 17 million
jobs and made a substantial contribution to
the funding of the public sector, with almost
$170 billion raised in the form of general
taxation. By 2022, the mobile economy
in the region will generate more than $1.8
trillion of economic value added as countries
continue to benefit from the improvements in
productivity and efficiency brought about by
increased take-up of mobile services.
The region has become the world’s largest
retail e-commerce market, driven by the
burgeoning economies in China, Japan and
South Korea, where payment platforms such
as Alipay, Apple Pay and Samsung Pay are
fast becoming ubiquitous. More recently,
however, a combination of market and
demographic factors has resulted in countries
in Southeast Asia, including Indonesia,
Thailand and Vietnam, becoming the key
drivers of growth. Mobile internet users in
these markets are among the most engaged
globally on e-commerce platforms such
as Lazada, Shopee and Tokopedia, which
provide scalable, readily accessible platforms
for smaller retailers to transact online with
their customers.
Meanwhile, the startup ecosystem in Asia
Pacific is growing rapidly, with the number
of active tech hubs in the region’s emerging
markets doubling over the last year and
venture funding into South/Southeast Asian
countries tripling since 2016. Most emerging
markets in the region are benefitting from
big deal flows and growing interest from
international investors, taking advantage of
the optimism to improve their ecosystems
and acting as alternative investment
destinations to the more established markets.
Executive Summary4

Advancing digital societies in Asia Pacific
As more countries continue to implement
their strategies for digital transformation,
proving identity online will become essential
to participation and inclusion. To create
digital societies, governments worldwide
recognise the importance of a digital
identity – being able to verify an individual’s
identity electronically. A digital identity acts
as a gateway to enable faster and easier
interaction with public institutions, and is
essential for individuals to participate in a full
digital lifestyle.
However, after the recent revelation that
Cambridge Analytica siphoned personal
data from millions of Facebook users, trust
in various forms of social media has been
shaken. Thus, data privacy and the security
of digital identities has assumed greater
importance. While mobile operators apply
high standards of privacy, data protection
and security for their customers’ data, the
inadequacy of legal frameworks can worsen
customer perceptions about operators’ use
of their data and potentially reduce their
willingness to use mobile devices to access
identity-linked services. A digital identity
system must have a foundation of trust if it is
to generate widespread acceptance among
users.
Concerted action between governments and
mobile operators can help reap the benefits
that stem from digital identity and address
the challenges presented by increasing cross-
border data flows and cyber-attacks that
affect digital commerce between countries
and overall trade. When governments develop
a national strategy underpinned by an
enabling policy environment, the prospects
are much better for mobile-enabled, digital
identity services to accelerate a country’s
digital transformation, support digital and
financial inclusion, and offer the benefits of
convenience and reach.
Executive Summary 5

61%
ASIA PACIFIC
Unique
mobile
subscribers
2.7bn
3.2bn
67%
1.8%
PENETRATION RATE
2017
2017
2017
2025
2025
CAGR 2017–25(% of population) 73%
SIM connections
Excluding licensed cellular IoT
4.2bn
4.8bn
2017
2025 1.9%
CAGR
2017–25
102%
PENETRATION RATE
(% of population) 111%
Operator total revenues
Data growth driving revenues and operator investments
Accelerating moves to mobile broadband networks and smartphone adoption
$416bn $454bn2025
Operator capex of over $188 billion for the period 2018–20
Growth of
1.4 billion
from the end
of 2017
3.9bn
Mobile broadband connections
of total connections Smartphones by 2025
93%

EmploymentPublic funding
6.8m
Jobs directly
supported by
the mobile
ecosystem
$1.8tn
$1.5tnMobile
industry
contribution
to GDP
$170bn
2017
2022
Mobile contributing to economic and
social development across the region
2017
2017
5.4%
2017
of GDP
DIGITAL INCLUSION INNOVATION
Mobile ecosystem contribution to
public funding (before regulatory
and spectrum fees)
41%
63%2025
2017 11bn
675m
by 2025
5G connections by 2025
Connecting the unconnected Delivering new services and apps
Mobile internet penetration Number of IoT connections
to reach
Plus an additional 10.5 million indirect jobs

Industry
overview
01
8 Industry overview

Major milestones in Asia Pacific
Source: GSMA IntelligenceFigure 1
Smartphones
= 59% of total
connections
CONNECTIONS
4G takes
the lead
TECHNOLOGY
4G becomes
dominant
technology
2G phased out in
20 of the 52 APAC
markets
2.7 billion
63% of
population
Half of
population are
mobile internet
users
1.7 billion
41% of
population
MOBILE
INTERNET
USERS
675 million
5G connections
Early 5G commercial launches
across Asia Pacific
11 billion
IoT connections
2017 2019 2020 2025
2.7 billion
67% of
population
UNIQUE
MOBILE
SUBSCRIBERS
3.2 billion
73% of
population
2.9 billion
70% of
population
TIMELINE
9Industry overview

Unique subscribers in Asia Pacific
At the end of 2017, there were 2.7 billion unique
subscribers1
in Asia Pacific, accounting for two thirds
of the region’s population. The region is home to
two of the most populous nations in the world –
China and India, which together account for two
thirds of the region’s subscribers, and well over a
third of the global total. More than half the world’s
mobile subscribers live in Asia Pacific.
Asia Pacific has been the biggest contributor to
global subscriber growth in recent years and still has
room for growth. Since 2012, when half the region’s
population subscribed to mobile services, the region
has gained 783 million subscribers, and by 2025
another 424 million will be added, bringing the total
to 3.2 billion (73% of the region’s population). With
an average 1.5 SIM cards per subscriber, there were
4.2 billion connections2
across Asia Pacific, equating
to connections penetration of 102% in 2017.
1.1
Mobile adoption growth slowing
2020 20232015201420132012 2022 20252021 20242016 2017 2018 2019
50%
67%
73%
2.0
2.2
2.3
2.5
2.6
2.7 2.8 2.9 2.9 3.0 3.0 3.1 3.1 3.2
Subscribers
(billion)
Penetration
%
1. Total unique users who have subscribed to mobile services at the end of the period, excluding M2M. Subscribers differ from connections such that a unique user can have multiple
connections.
2. Total unique SIM cards (or phone numbers, where SIM cards are not used), excluding cellular M2M, that have been registered on the mobile network at the end of the period.
Connections differ from subscribers such that a unique subscriber can have multiple connections.
10 Industry overview

Unique subscriber penetration by sub-region
Asia Pacific will account for just over half of new
subscribers globally by 2025. However, growth
has reached its peak and has started to taper out.
Between 2017 and 2025, the subscriber base will
increase by a CAGR of 1.8%, down from 6.0% over
the previous four years. Much of this slowdown
can be explained by the differing levels of market
maturity across the region and sub-regions.3
East Asia, for example, is home to some of the
most penetrated markets in the world (such as
Taiwan, Hong Kong and South Korea), with minimal
opportunity for further subscriber growth. On
average across East Asia, 81% of the population
subscribe to mobile services; this will increase
by just three percentage points between 2017
and 2025.
Meanwhile, South Asia is home to markets with
very low penetration levels (such as Pakistan and
Bangladesh), where socioeconomic issues such as
rapid population growth, poverty and inequality,
unplanned urbanisation and natural disasters have
limited growth in recent years. On average across
South Asia, just over half the population are mobile
subscribers. This does, however, leave room for
growth; penetration levels will rise to 61% by 2025.
Some markets (such as China, Indonesia and
Myanmar) have seen their previously strong growth
stagnate due to the challenges of connecting those
still unconnected, particularly poorer and rural
communities.
East Asia Southeast Asia Oceania South Asia
81% 84%
71%
76%
71% 74%
51%
61%
2017 2025
3. See Appendix for sub-region breakdown
11Industry overview

Despite this declining growth, four of the five
biggest growth markets across the world are in Asia
Pacific. India will be the primary driver: with only
around half the population currently subscribing
to mobile services, there is considerable room for
growth. As devices and data services become more
affordable, digital literacy improves and more locally
relevant content is made available, 208 million new
subscribers will be connected in the country by
2025, accounting for a quarter of global and half of
regional new subscribers over this period. By 2025,
the penetration rate will still only be 63%, leaving
even further room for growth.
China will add another 72 million subscribers by
2025, bringing its total to more than 1.2 billion,
or 85% of the population. However, this is a
considerable slowdown in growth compared to
that seen in the country over the last few years.
With the Chinese market approaching saturation
(at 82% subscriber penetration in 2017), expanding
connectivity into rural and poorer areas is becoming
increasingly challenging. Subscriber numbers will
see an average annual growth rate of just 0.8%
between 2017 and 2025, compared to 5.5% over the
last four years.
By the end of 2017, the number of smartphone
connections in Asia Pacific reached 2.5 billion, or
around 60% of total connections. Four of the top
seven markets globally in terms of smartphone
adoption are in Asia Pacific – namely, Singapore (at
86%, the highest adoption level in the world), South
Korea (82%), Macao (81%) and Australia (81%).
However, three other markets – China, India and
Indonesia – have been the main drivers of growth,
adding 350 million smartphone connections (54% of
new connections globally) between them in the last
year alone.
India will continue to be a primary driver of
smartphone growth in the region over the next few
years, adding more than 0.5 billion smartphone
connections by 2025 (22% of the global total). By
this time, smartphone connections in the country
will account for three quarters of total connections,
up from 45% in 2017.
Contribution to global new subscribers, 2017–2025
India China Pakistan Indonesia Bangladesh Rest of APAC Total APAC Rest of World World
208
72 36 26 22
60
424
418 842
Million

Local language support to fuel smartphone growth in India
One of the key drivers of smartphone growth in India over the next few years will be the availability
of devices and content in local languages. Some 29 languages are spoken by at least 1 million people
in India (with a further 1,600 distinct dialects). Although English is an official language, it is only
spoken by around 12% of the population,4
creating a major barrier to the uptake of smartphones and
the mobile internet. According to a 2017 KPMG and Google study, by 2021, almost three quarters
of internet users in India will connect in a language that is not English.5
Not only is this a barrier to
smartphone uptake in India; it could also limit growth of the digital economy as a whole, as well as
relationships with other countries across the region (affecting, for example, cross-border data flows
and e-commerce transactions).
In recent years, steps have been taken to try to address this issue. For example, Indus OS is an Indian
mobile operating system based on Android, currently available in English and 12 regional languages
spoken by more than 95% of the Indian population, and used by homegrown device manufacturers
such as Micromax, Intex Technologies and Karbonn Mobiles. Additionally, in 2017, Google announced
that it had doubled the number of Indian languages on its mobile keyboard to 22, and had enabled
nine Indian languages to work on Google Translate. Further, the Indian government mandated
support for regional languages in all mobile phones sold in the country from July 2017.
4. The Most Widely Spoken Languages In India, World Atlas, 2018, based on 2001 census data. Includes speakers of English as a first, second or third language
5. Indian languages – defining India’s Internet, KPMG/Google, 2017
We forecast Indonesia will overtake the US
during 2018 to become the world’s third largest
smartphone market (behind China and India).
Several factors are driving this growth, including
overall economic expansion, availability of affordable
4G smartphones, further development of 4G
infrastructure, rapid urbanisation and an expanding
middle class increasingly using smartphones in their
daily activities (for e-commerce, video calling and
streaming). By 2025, we expect Indonesia to have
among the highest smartphone adoption rates in
the world, at just under 90% of total connections.
Other markets that should see rapid smartphone
growth over the next few years include Bangladesh,
Vietnam and Pakistan, where we expect adoption
rates to rise by between 37 and 44 percentage
points between 2017 and 2025.
By 2025 there will be just under 4 billion
smartphone connections in Asia Pacific (an increase
of 1.4 billion on 2017), accounting for 55% of the
global total, and more than 80% of the region’s total
connections (the highest adoption rate globally
behind North America and Europe).
13Industry overview

Note: numbers may not add up to 100% due to rounding
INDIA
JAPAN
SOUTH KOREA
CHINA
MALAYSIA
PHILIPPINES
MYANMAR
INDONESIA
KEY MARKETS IN ASIA PACIFIC

India
Japan
South Korea
2017
2017
2017
2017
2017
2017
2017
2017
2025
2025
2025
2025
2025
2025
2025
2025
82%
53%
84%
87%
76%
45%
61%
82%
85%
63%
87%
89%
89%
74%
83%
91%
China
SMARTPHONE ADOPTION
SMARTPHONE ADOPTION
SMARTPHONE ADOPTION
SMARTPHONE ADOPTION
SUBSCRIBER PENETRATION
Malaysia
Philippines
Myanmar
Indonesia
2017
2017
2017
2017
2017
2017
2017
2017
2025
2025
2025
2025
2025
2025
2025
2025
73%
79%
63%
49%
61%
73%
63%
72%
77%
82%
71%
60%
89%
83%
79%
79%
SMARTPHONE ADOPTION
SMARTPHONE ADOPTION
SMARTPHONE ADOPTION
SMARTPHONE ADOPTION
TECHNOLOGY MIX
2017
2025 2025
TECHNOLOGY MIX
TECHNOLOGY MIX
2017
2025 2025
2017
2025 2025
TECHNOLOGY MIX
2G
3G
2G
3G
2G
3G
5G
5G
5G
5G
4G
4G
4G
4G
2G
3G
2G
3G
2G
3G
2G
3G
5G
5G
5G
5G
4G
4G
4G
4G
2G
3G
1%
18%
12%2017
2025 2025
71%
71%
28%
TECHNOLOGY MIX
2017
TECHNOLOGY MIX
TECHNOLOGY MIX
2017
TECHNOLOGY MIX
2017
2017
5%
25%62%
5%1%
12%59%
26%
47%21%
10%75%
16%82%
27%
15%
15%
50%
24%
44%
47%
38%
65%
40%
2%
41%
17%
10%
16%
51%
21%
18%
75%
21%
50%
39%
67%
1%
44%
48%
67%
1%
Note: totals may not add up to 100% due to rounding.
15Industry overview

Asia Pacific is rapidly migrating to higher speed
mobile networks, with mobile broadband (3G and
above) becoming the dominant technology (over
50% share of connections) at the end of 2016. 4G
is the primary source of this shift, overtaking 2G to
become the leading mobile technology by share of
connections in 2017.
The region is home to some of the world’s most
advanced markets in terms of 4G adoption, such
as South Korea (82% of total connections in
2017), Japan (75%) and Australia (73%). However,
emerging markets will be the key drivers of 4G
growth over the next few years. In India, a number
of factors mean another 669 million 4G connections
will come online by 2025, accounting for over half
of the region’s new 4G connections. These factors
include ongoing network investments by mobile
operators, increased competition (e.g. Reliance
Jio offering free data on its 4G-only tariffs),
falling device prices (led by local vendors such
as Micromax) and growing consumer appetite
for higher speed mobile. Additionally, thanks to
the much-awaited auctions of 4G spectrum in
Bangladesh of February 2018, and an expected
launch of services later in the year, 4G connections
will grow rapidly, reaching half of Bangladesh’s total
connections by 2025. Other previously ‘laggard’ 4G
markets such as Indonesia, Thailand and Vietnam
are now also experiencing an accelerating migration
to 4G.
Across the region as a whole, 4G is expected to
surpass 50% of connections by 2019, and will then
dominate to 2025. By this time, mobile broadband
will account for 93% of total connections, with 2G all
but obsolete and phased out in 20 of the region’s 52
markets.
Although 4G will continue to be the primary
technology over the next few years, 5G will gain a
foothold in the region by the end of the decade.
With launches expected from 2019 and networks
covering 37% of the population by 2025, we expect
5G connections to scale rapidly, reaching 675 million
by 2025, accounting for more than half of the global
5G total. China will be key to this growth, accounting
for nearly two thirds of the region’s 5G connections
by 2025. Other countries in which 5G should grow
rapidly include South Korea, Australia and Japan, as
networks are rolled out in urban areas and handset
vendors integrate 5G chipsets into flagship devices.
In these markets, 5G connections will account for
around 50–60% of total connections by 2025. 5G is
discussed more in Chapter 2.1.
1.2
4G takes the lead, while 5G commercialisation
approaches
17Industry overview

The growth in high-speed network coverage and
smartphone adoption is leading to a surge in the use
of mobile data in Asia Pacific. According to Ericsson,
mobile data traffic reached 6 exabytes6
(EB) per
month in 2017, a 57% increase on 2016. A key driver
of this was the launch of Reliance Jio in India, which
offered free data in its tariffs; the country now has
the highest total data usage in the world.7
Further,
with one of the fastest growing digital footprints
in the world – over 200 million people already
regularly use social media and other digital services
such as mobile banking and digital payments –
mobile data traffic is expected to grow by 11 times in
the country by 2023.
Overall, growth in high-speed mobile broadband
connections, improved device capabilities, more
affordable data plans and an increase in data-
intensive content will push total mobile data traffic
in Asia Pacific to 47 EB per month by 2023. By
this time, a mobile subscriber in the region will
on average consume more than 15 GB of data per
month, up from just over 2 GB per month in 2017.
Technology migration in Asia Pacific
2020 20232015 2022 20252021 20242016 2017 2018 2019
5G
4G
3G
2G
55%
28%
16%
19%
7%
23%
17%
62%
58%
14%
1%
Percentage of connections
6. One exabyte = approximately 1 billion gigabytes
7. Draft National Digital Communications Policy-2018, Indian Department of Telecommunications, 2018

Mobile data in Asia Pacific to grow rapidly
Source: Ericsson, GSMA IntelligenceFigure 6
The number of Internet of Things (IoT) connections8
in Asia Pacific will increase almost four-fold between
2017 and 2025, reaching 11 billion. The region will
continue to be the largest regional IoT market
by number of connections in 2025, as a result of
strong growth in industrial IoT connections, which
will be almost double that for consumer IoT. Smart
cities and smart manufacturing will be the fastest
growing applications in terms of connections (33%
on average annually between 2017 and 2025). This
will be driven by a number of smart city initiatives
across the region (for example, the 13th Five Year
Plan in China, Smart Nation in Singapore and India’s
100 Smart Cities Mission) and a focus on factory
automation and deploying IoT in a manufacturing
context in a number of countries (such as Japan,
Taiwan and China).
The region’s IoT revenue9
will rise at an average
annual rate of 28% between 2017 and 2025 to
reach $386 billion, overtaking Europe in 2018 and
North America in 2023 – regions that currently
have the most mature and vibrant IoT ecosystems.
Professional services, including managed services,
systems integration and consulting, will record the
fastest revenue growth over the forecast period
(37% on average annually between 2017 and 2025)
as organisations across the region continue to
digitise their operations.
1.3
Scaling the Internet of Things: 11 billion connections
in Asia Pacific by 2025
15.3
2.1
2023
2017
(GB per subscriber per month)
Mobile data traffic
7x
8. IoT connections include cellular and non-cellular connections. IoT connections are IP-enabled devices capable of two-way data transmission (excluding passive sensors and
RFID tags). This includes connections using multiple communications methods such as cellular, short range and others. It excludes PCs, desktops, tablets, laptops, e-readers and
smartphones.
9. For GSMA Intelligence, IoT revenue excludes device and module chipset revenue but includes revenue associated with the provision of connectivity, applications, platforms and
services, and professional services. For more information, see the GSMA Intelligence report, IoT: the $1 trillion opportunity
19Industry overview

Asia Pacific is also leading in terms of mobile IoT10
adoption. In 2018, it will account for almost 60% of
the world’s licensed, low power wide area (LPWA)
connections, and this will continue throughout
the forecast period, totalling over 1 billion of the
world’s 1.9 billion licensed LPWA connections by
2025. China is one of the main factors behind
this growth; the country will record 860 million
licensed LPWA connections in 2025, associated
with various industry vertical applications including
smart metering, connected bikes and connected
agriculture.11
However, other countries in the region are also
rolling out narrowband (NB)-IoT and LTE-M (mobile)
networks. For example, in Sri Lanka Dialog Axiata
has a commercial mobile IoT network, supporting
LTE-M and NB-IoT technologies, in partnership with
Ericsson. To facilitate development of applications
for NB-IoT, Dialog Axiata has conducted an NB-IoT
hackathon, followed by the launch of an NB-IoT lab
in partnership with the GSMA. A well-developed
IoT ecosystem will be necessary for operators to
enable and develop new services, revenue streams
and scalability. As such, Dialog Axiata launched an
IoT service portfolio called Smartlife in early 2017,
introducing a suite of digital lifestyle applications
supporting IoT solutions such as Connected Home
and Car Connect. Most recently, it partnered with
Orange Electric, a manufacturer of electrical and
lighting products in Sri Lanka, to launch the Orange
Electric Smart Socket.
As an example of a broad ecosystem elsewhere in
the region, South Korea in 2017 had 2,118 businesses
working in IoT, for which 351 companies offered
platforms or software, 126 managed networks, 543
sold devices and 1,098 acted as service companies.12
To address this, KT launched the GiGA IoT Alliance in
2015, with Samsung Electronics, Nokia, China Mobile
and Microsoft as key members.
Growth
2017-2025
Asia Pacific IoT connections
2020 20232022 20252021 20242016 2017 2018 2019
1.3 1.6 1.9 2.3 2.6 3.0 3.4 3.8 4.3 4.7
1.0 1.2 1.5
1.9
2.5
3.0
3.8
4.5
5.4
6.3
Consumer Industrial
5.2x
2.9x
Billion
10. Mobile IoT refers to 3GPP-standardised, secure, operator-managed IoT networks using LPWA in licensed spectrum – in particular, LPWA networks designed for IoT applications that
are low cost, use low data rates, require long battery lives and often operate in remote and hard-to-reach locations.
11. For more information see the GSMA report Mobile IoT Case Study – Greater China
12. “South Korean IoT sales grew 23 percent in 2017”, ZDNet, February 2018

Mobile revenue outlook for Asia Pacific
Revenue growth in Asia Pacific continues to be
under pressure due to declining subscriber growth
(particularly in the region’s developed markets),
increasing competition in certain markets, growing
adoption of IP messaging services and a challenging
macroeconomic environment. Regional mobile
revenue will grow by an average annual rate of
2% between 2017 and 2020, with only negligible
growth after that – even declining across developed
markets, due to limited subscriber growth and
intense competition from the wider digital
ecosystem (IP messaging platforms, for example).
China offers the largest revenue growth opportunity
for its three mobile operators. Despite slowing
growth, especially beyond 2020, China will account
for around 40% of global growth in mobile revenue
between 2017 and 2025.
India’s market is still adjusting to the entry of
Reliance Jio, whose aggressive, low-cost pricing of
data led to a price war and a 16% decline in India’s
mobile revenues in 2017, with a further 12% decline
expected in 2018. We expect the Indian market to
stabilise in 2019 and revenues to return to growth
from 2020.
There is a potential large upside to these revenue
forecasts if mobile operators can build successful
business cases around 5G, particularly using IoT,
immersive AR/VR content and software-based
network optimisation. By expanding portfolios of
non-core services to compete against internet and
wider ecosystem players, mobile operators can
benefit from the 5G era and reverse the declines
experienced under 4G.
1.4
Muted revenue outlook, while capex sees calm before
5G storm
Challenging revenue outlook for traditional mobile services
2020 20232022 20252021 202420162015 2017 2018 2019
Developed Developing
$ billion
165
239
169
272
161
252
169
275
162
255
168
279
169
263
167
282
169
271
167
285
167
287
21Industry overview

Between 2018 and 2020, mobile operators in Asia
Pacific are expected to invest 14% of revenues or
$188 billion in mobile capex (excluding one-time
spectrum acquisitions). In the most developed
markets, while 5G remains nascent, mobile
operators will mostly be focussing on upgrading 4G
networks to faster speeds and lower latencies. In
developing countries, operators’ priority will be to
increase the coverage and capacity of their existing
networks.
Over the next few years, network investments
will increasingly shift to 5G – though there is little
guidance on the likely outlays necessary for 5G
operators’ mobile capex. Cost estimates vary wildly:
for example, forecasts for capex in China between
2020 and 2030 range from $280 billion (by the
China Telecom Group) to $411 billion (by the Ministry
of Industry and Information Technology, China’s
national regulator).
Ultimately, total costs will depend on a number of
factors including the type of model used for 5G
deployment (standalone, non-standalone or phased
approach), the amount of targeted coverage, the
range of spectrum bands allocated to 5G, and the
availability of fibre infrastructure and nationwide
LTE networks. Nevertheless, 5G should cost less
per unit of data than 4G, largely due to potential
cost savings from network optimisation and more
efficient use of energy by the newer technology.
Capex has peaked for 4G, but 5G is on the horizon
Asia Pacific capex and coverage outlook
Networkcoverage(%ofpopulation)
Capex($billion)
100
80
60
40
20
0
2020201520142013201220112010 2016 2017 2018 2019
Capex 4G coverage 5G coverage
89%
50%
0%
9%
10%

The mobile ecosystem consists of mobile operators;
infrastructure service providers; retailers and
distributors of mobile products and services;
mobile handset manufacturers; and mobile
content, application and service providers. The
direct economic contribution to GDP of these firms
is estimated by measuring their value added to
the economy, including employee compensation,
business operating surplus and taxes.
In 2017, the total value added generated by the
mobile ecosystem in Asia Pacific was $480 billion
(or 1.8% of GDP), with network operators accounting
for more than 50% of this.
The mobile ecosystem makes a significant contribution to the economy
in Asia Pacific, with an economic value added of $1.5 trillion (or 5.4% of
GDP). This includes the direct impact of the mobile ecosystem as well as
the indirect impact and the boost in productivity brought about by the
increased use of mobile services and technologies.
The direct economic contribution of the mobile ecosystem
Direct contribution of the mobile ecosystem to GDP
1.5
Mobile delivering economic growth
29
122
270
15
44
0.1%
0.2%
0.5%
1.0%
0.1%
Infrastructure
providers
Mobile
operators
Device
manufacturers
Distributors and
retailers
Content, applications
and other services
Note: totals may not add up due to rounding.
$ billion, % 2017 GDP
23Industry overview

In addition to their direct economic contribution,
firms in the mobile ecosystem purchase inputs from
their providers in the supply chain. For example,
handset manufacturers purchase inputs from
microchip providers, and mobile content providers
require services from the broader IT sector. Some
of the profits and earnings generated by the mobile
ecosystem are spent on other goods and services,
stimulating further economic activity in those
sectors. We estimate that in 2017, this additional
economic activity generated a further $160 billion in
value added in the region (or 0.6% of GDP).
The use of mobile technology also drives
improvements in productivity and efficiency
for workers and firms. Different types of mobile
technology have their own impact on the
productivity of the regional economy:
• Basic mobile voice and text services allow workers
and firms to communicate more efficiently and
effectively (for example, reducing unproductive
travel time).
• 3G and 4G technology allows workers and firms
to use mobile data and internet services. This
improves access to information and services,
which in turn drives efficiency in business
processes across many industries, including
finance and health. The impact of mobile internet
is particularly significant in developing countries,
where fixed infrastructure is poor and mostly
confined to large cities and business/industrial
districts.
• M2M and IoT allow for the digitisation of services
and improvement of industrial processes. As
these technologies are increasingly adopted, we
expect them to create significant benefits by
driving cost savings and operational efficiency
gains in areas such as manufacturing, logistics
and retail.
We estimate that, together, these productivity
impacts generated $810 billion in 2017 (or 3%
of GDP). Overall, taking into account the direct,
indirect and productivity impacts, in 2017 the mobile
industry made a total contribution of $1.5 trillion
in value added terms, equivalent to 5.4% of the
region’s GDP.
Indirect and productivity impacts of mobile technology
MOBILE
OPERATORS
INDIRECTRELATED
INDUSTRIES
PRODUCTIVITY TOTAL
IMPACT
270
210
160
810 1,460
5.4%
3.0%
0.6%
0.8%
1.0%
MOBILE ECOSYSTEM
Total (direct, indirect and productivity) contribution to GDP
$ billion, % 2017 GDP

In 2017, mobile operators and the wider mobile
ecosystem provided direct employment to almost
7 million people across Asia Pacific. In addition
to this, economic activity in the ecosystem
generated jobs in other sectors. Firms that provide
goods and services as production inputs for the
mobile ecosystem (for example, microchips or
transport services) will employ more workers as
a result of the demand generated by the mobile
sector. Furthermore, the wages, public funding
contributions and profits paid by the mobile
industry are spent in other sectors, which provide
additional jobs.
We estimate that in 2017, 10.5 million additional jobs
were indirectly supported in this way, bringing the
total impact (both direct and indirect) of the mobile
industry to more than 17 million jobs.
Employment
Employment impact
Source: GSMA Intelligence analysisFigure 12
DIRECT
Jobs (million), 2017
CONTENT,
APPLICATIONS
AND SERVICES
DIRECT
INDIRECT
TOTAL
DISTRIBUTORS
AND RETAILERS
DEVICE
MANUFACTURERS
MOBILE
OPERATORS
INFRASTRUCTURE
PROVIDERS
0.4
1.7
1.9
2.5
0.3
17.310.5
6.8
25Industry overview

The mobile ecosystem also makes a significant
contribution to the funding of the public sector
through general taxation. In most countries, this
includes value added tax or sales tax, corporation
tax, income tax and social security from the
contributions of firms and employees. We estimate
that the ecosystem made a tax contribution to the
public finances of governments of $170 billion in
2017.
Besides the public funding contributions through
general taxation above, mobile operators made
further contributions via two additional channels. In
2017, revenue gained from the auction of spectrum
for mobile services was over $3.5 billion, including
from major auctions in Australia ($1.2 billion from
two auctions), Taiwan ($940 million) and Singapore
($845 million). Additionally, in some countries,
mobile operators are subject to sector-specific
taxes such as revenue share taxes, universal service
obligation fund contributions, SIM and airtime
vouchers taxes and annual spectrum fees.
Public funding contribution
Contribution to public funding by the mobile industry
$ billion, 2017
Source: GSMA Intelligence analysisFigure 13
MOBILESERVICESVAT,SALES
TAXESANDEXCISEDUTIES
HANDSETVAT,SALESTAXESAND
CUSTOMSDUTIES
CORPORATION
TAX
EMPLOYEEINCOMETAXAND
SOCIALSECURITY
TOTAL
50
50
30
40 170

We expect the economic contribution of the mobile
ecosystem in Asia Pacific to continue to increase
in both relative and absolute terms. In value added
terms, we estimate that mobile will contribute $1.8
trillion to the Asia Pacific economy by 2022, up from
$1.5 trillion in 2017.
Most of this value added increase will be due
to productivity gains, which will increase from
$810 billion in 2017 to more than $1 trillion by 2022.
In a region as diverse as Asia Pacific, productivity
will increase for various reasons. In some countries,
the adoption of M2M and IoT solutions will drive
increased productivity. In developing countries,
productivity growth will be mostly driven by the
adoption of mobile internet services.
Outlook and trends for the next five years
27Industry overview

Mobile driving
and enabling
innovation in a
fast-evolving
ecosystem
02
28
Mobile driving and enabling innovation in
a fast-evolving ecosystem

CHINA
HONG
KONG
JAPANKOREA, SOUTH
TAIWAN
BANGLADESH
BHUTAN
INDIA
NEPALPAKISTAN
SRI LANKA
CAMBODIA
INDONESIA
LAOS
MALAYSIA
MYANMAR
PHILIPPINES
SINGAPORE
THAILAND
AUSTRALIA
NEW ZEALAND
The Asia Pacific region will be a global leader
in 5G deployments, competing with the US and
some European markets to be the first to launch
commercial services. Countries in the region form
three tiers:
• those aiming to be the first in the world to launch
(Australia, Philippines and South Korea)
• early adopters hoping to ride the initial wave
of global deployments (including China, Japan
and India)
• late adopters intending to launch but without
official timelines.
5G plans in Asia Pacific
Source: GSMAFigure 14
2.1
Asia Pacific taking the lead on 5G
2020
2019
Intentions
announced
but details
unclear
29

Some of the early-adopter markets are approaching
5G commercialisation from unique angles to gain
a competitive edge, while others have specific
motives to launch 5G services as soon as possible.
• South Korea’s Ministry of Science and ICT
recently announced an extension to mobile
networks of the current infrastructure-sharing
regulation for fixed networks.13
The regulation will
require all three mobile operators to participate in
the co-deployment of network infrastructure and
opening up of facilities for infrastructure sharing,
with details not yet finalised. The government
wants to support the early commercialisation
of 5G technology and accelerate 5G take-up,
while reducing the cost of network deployment.
Potential savings are estimated at $40 million in
annual deployment costs and $1 billion in capex
over the next 10 years.
• Mobile operators in China are pursuing
a standalone model for 5G, involving the
construction of a new network, including new
base stations, backhaul links and a core network.
A standalone 5G network will allow 4G and
5G services to run in parallel and remove the
complexity of LTE integration, while providing
economies of scale. Additionally, mobile operators
can exploit the capabilities of the new technology
to the full and open new revenue streams besides
mobile broadband (which will be served by the
existing 4G network). However, this option is likely
to be more expensive, at least in the early stages,
despite expectations of network optimisation,
spectrum sharing, and open network initiatives
resulting in a lower cost per unit of data for 5G
than for 4G.
• India has announced plans to launch widespread
commercial 5G networks in 2020 to boost the
performance and capacity of its existing mobile
broadband networks. India’s 4G services only
took off in 2017 after the data price war sparked
by Reliance Jio. While India’s mobile coverage
has reached around 90% of the population,
network speeds have not met expectations. In
fact, OpenSignal’s February 2018 global report
of average LTE speeds by country ranked India
last.14
In preparation for 5G, and in response to
rising consumer demand and cost to increase
capacity and coverage, Indus Towers, controlled
by Vodafone and Idea, announced a merger with
Bharti Infratel to create the world’s largest tower
company outside China.15
The combined entity will
control more than 163,000 towers across India’s
22 telecoms circles. Airtel also recently entered
into a strategic alliance with South Korea’s SK
Telecom to leverage the latter’s expertise in
developing 5G technology, network-function
virtualisation (NFV), software-defined networking
(SDN) and IoT solutions.16
With launches expected in 2019, hype around the
potential opportunities of the 5G era is at an all-
time high, often with visions spanning decades and
bordering on the realm of science-fiction. Actual
business cases are more restrained, with limited
applications for support by 5G alone, at least initially.
Indeed, some players are dialling back the hype as
deployments get closer: Huawei for example has
said that, apart from speed bumps [increases] over
4G, it doesn’t expect consumers will find a material
difference between the two technologies.17
Early launches (based on 3GPP Release 15) will
largely focus on enhanced mobile broadband
services, supplementing the capacity and
capabilities of existing 3G and 4G networks,
particularly in dense urban areas. 5G’s next
phase, based on 3GPP Release 16 and aiming
to be complete by December 2019, will bring
further enhancements to mobile data and lay
the foundation to support massive connectivity
and/or low-latency services such as IoT, critical
communication services (e.g. remote surgery,
autonomous vehicles, smart grids), virtual reality
and a diverse wishlist of future use cases and
innovations.
Standardisation is only one step in the process. It
will take time even once the standards are agreed to
deploy the networks to support them. Other issues
need to be tackled, including technical hurdles (such
as security, interconnect and roaming) and the
identification of business models. Only once these
are addressed will some of the more sensationalised
and ambitious services become a reality.
13. “Korea operators to build shared 5G infrastructure”, Mobile World Live, April 2018
14. The State of LTE, OpenSignal, 2018
15. “Bharti Airtel seals Infratel, Indus Tower deal”, Mobile World Live, April 2018
16. “Bharti Airtel partners SK Telecom to upgrade network”, Mobile World Live, September 2017
17. “Under scrutiny, Huawei downplays 5G while slating phone for mid-2019”, VentureBeat, April 2018
30

10% 20% 30% 40% 50% 60% 70% 80% 90%
E-commerce in Asia Pacific is booming. The region
has become the world’s largest retail e-commerce
market, driven by the burgeoning economies in
China, Japan and South Korea. In these markets,
payment platforms such as Alipay, Apple Pay and
Samsung Pay are fast becoming ubiquitous. For
these three countries, as shown in Figure 15, 59–77%
of smartphone owners use their devices to purchase
goods and services online every month, with a
further 14–25% doing so less frequently.18
More recently, however, a combination of market
and demographic factors has resulted in countries in
Southeast Asia becoming the key drivers of growth.
A 2017 Google study estimates that the total first-
hand e-commerce market19
in Southeast Asia has
doubled over the last two years, reaching around
$11 billion by the end of 2017.20
In some of these
markets, such as Indonesia, Thailand and Vietnam,
35–40% of smartphone owners purchase goods
online using their devices.21
By 2025, the market is
forecast to reach $88 billion.22
Based on the question “How often do you order and/or purchase goods online on a mobile phone?”
Mobile commerce usage in Asia Pacific
2.2
Digital commerce is on the rise
77%
5%
27%
4%
59%
59%
9%
16%
14%
44%
12%
17%
14%
8%
19%
8%
25%
18%
16%
20%
26%
30%
10%
20%
8%
87%
55%
87%
17%
24%
75%
64%
60%
26%
78%
63%
South Korea
China
India
Thailand
Philippines
Bangladesh
Japan
Australia
Vietnam
Indonesia
Pakistan
Myanmar
Monthly Less than once a month Never use
Percentage of smartphone owners
18. GSMA Intelligence Consumer Survey 2017
19. Business to consumer (B2C) transactions only, i.e. excluding consumer to consumer (C2C)
20. e-Conomy SEA Spotlight 2017, Google/Temasek, 2017
22. e-Conomy SEA Spotlight 2017, Google/Temasek, 2017
0% 100%
31

This rapid growth has been driven by the surge
of marketplaces where small businesses sell to
consumers on mobile-first platforms such as
Lazada, Shopee and Tokopedia, which provide
scalable, readily accessible platforms for smaller
retailers to transact online with their customers.
Southeast Asia’s mobile internet users are among
the most engaged globally on these e-commerce
platforms, where they spend an average of 140
minutes per month, compared to 80 minutes
per month for Amazon in the US. Another area
of growth is mobile money – financial services
delivered over mobile phones. According to a recent
GSMA report,23
in 2017, South Asia was the fastest
growing region for mobile money: active24
mobile-
money accounts grew more than 50% to 86 million
between 2016 and 2017.
Singapore’s strength in digital commerce
With well-developed infrastructure and a high-income, digitally savvy population, Singapore
is a mature market for e-commerce. Its integrated, holistic approach and alignment between
government and industry make Singapore a model for others to emulate in creating a business-
friendly environment and a culture of innovation and progress, especially for small businesses.
Singapore’s strength in online commerce has been reinforced by the government’s decision to take
a cautious, ‘wait and see’ approach to taxing e-commerce in its 2018 budget, while providing grants
and programmes to support SMEs. Various taxes might increase governmental revenues in the short
term, but short-sighted tax structures can also harm longer term development of e-commerce and
SMEs. While neighbouring countries such as Thailand and Indonesia are considering whether to tax
e-commerce, Singapore’s measured, long-term view offers a stable environment for businesses to
continue investing in, and growing, the local economy.
E-commerce revenue in Singapore is expected to grow at an average annual rate of 10% over the
next four years, reaching $5.5 billion by 2022.25
23. 2017 State of the Industry Report on Mobile Money, GSMA, 2018
24. On a 90-day basis
25. Statista
32

33

BANGLADESH
NEPAL
INDIA
SRI LANKA
INDONESIA
Incubators & Accelerators Coworking Spaces Other Tech Hubs
MALAYSIA
MYANMAR
>50 Tech Hubs
20-49 Tech Hubs
10-19 Tech Hubs
5-9 Tech Hubs
1-4 Tech Hubs
No active hubs
PHILIPPINES
PACIFIC
THAILAND
CAMBODIA
PAKISTAN
VIETNAM
43% 37% 20%
Over the last year, Asia Pacific has seen a dramatic
increase in invested capital, particularly into
emerging markets: TechInAsia recently estimated
that tech startups in South/Southeast Asian
countries were recipients of nearly $8 billion of
venture funding in 2017, more than three times that
in 2016.26
GSMA research shows that the startup ecosystem
in the region’s emerging markets, excluding China,
doubled in 2017, with 565 active tech hubs27
compared to 287 in 2016. Of these, more than
250 are in India.28
Other vibrant tech markets
include Indonesia, Malaysia, Thailand and Vietnam.
Countries such as Malaysia, the Philippines and
Nepal have also shown particularly high levels of
growth in startup ecosystems, with the number
of tech hubs more than doubling since 2016.
Landscape analysis of 565 active tech hubs in
South/Southeast Asia
Source: GSMA Ecosystem AcceleratorFigure 16
2.3
Tech startup ecosystem is growing rapidly
26. “Southeast Asia sees record startup funding in 2017”, TechInAsia, January 2018
27. We define tech hubs as physical spaces designed to foster and support tech start-ups, including incubators, accelerators, co-working spaces, fab labs, makerspaces, hackerspaces,
and other innovation centres.
28. Incubators/accelerators driving growth of Indian start-up ecosystem, NASSCOM, 2017
34

Indonesia has the fifth largest ecosystem in
the region with more than 50 active tech hubs,
over half of which are in the capital Jakarta. A
joint commitment by the government, banks,
corporations and mobile operators to develop
appropriate infrastructure that is able to absorb
and foster tech startups has helped Indonesia’s
ecosystem grow. Mobile operators have supported
the start-up scene since the early 2010s by providing
start-ups with funding and market resources. Today,
Indigo Incubator, backed by Telkom Indonesia, and
Ooredoo’s IdeaBox are among the country’s leading
hubs. The Indonesian government and educational
institutions have also promoted initiatives such as
1000 Digital and installed dedicated bodies such as
the Indonesia Creative Economy Agency (BEKRAF)
and BINUS, a university-based accelerator
supported by Kejora, Microsoft and Telkomsel. A
number of international accelerators such as Plug
and Play, Google, Founder Institute and MaGIC have
also launched programmes in the country.
Malaysia is home to key entities such as MaGIC’s
Global Acceleration Programme, and Cyberjaya,
a tech city in the outskirts of Kuala Lumpur, which
itself is home to 27 tech hubs. In Thailand, mobile
operator True launched its $637 million True Digital
Park in Bangkok, as the largest tech park in the
region. Bangkok is home to 27 tech hubs. Moreover,
a growing number of Singapore and Hong Kong-
based venture firms such as 500 Startups, East
Ventures and Golden Gate Ventures have increased
their operations in Malaysia and Thailand. Similarly,
accelerators such as MuruD and ImpactTech have
launched programmes in Thailand, while the Hong
Kong-based SuperCharger FinTech Accelerator
started a second round in Kuala Lumpur in
early 2018.
Surrounded by the economic engines of mainland
China, Hong Kong, India, Singapore and Australia,
which provide resources and access to international
markets and capital, the technology landscape in
South and Southeast Asia has strong potential for
growth. Most emerging markets are benefitting
from big deal flows and growing interest from
international investors, taking advantage of the
optimism to improve their ecosystems and acting as
alternative investment destinations compared to the
more established markets.29
GSMA’s Ecosystem Accelerator Innovation Fund30
aims to foster collaboration between start-ups
and mobile operators, helping mobile operators
overcome barriers to innovating in emerging
markets, and start-ups tackle the challenges of
scaling up. Two rounds of funding have supported
nine start-ups from Asia Pacific: Ruangguru
(an education startup from Indonesia), eSewa
(a payment platform from Nepal), Field Buzz
(operations management software in Bangladesh),
Joonaak (an e-commerce logistics service in
Cambodia), Neh Thit (a job-matching platform in
Myanmar), Kargo (a truck-sharing marketplace
also in Myanmar), Sehat Kahani (mHealth services
provided by women doctors in Pakistan), EFishery
(IoT-based, smart fish-feeding machines in
Indonesia) and Tootle (a motorbike ride-sharing
platform in Nepal).
29. For more information, see the GSMA Ecosystem Accelerator blog “Asia Pacific: a look at the 565 active tech hubs of the region’s emerging economies”
30. The Ecosystem Accelerator programme is supported by the UK Department for International Development (DFID), the Australian Government, the GSMA and its members. For more
information, see www.gsma.com/eainnovationfund
35

Mobile
addressing
social
challenges
03
Despite rapid growth in mobile internet penetration
in recent years, 2.4 billion people in Asia Pacific
remain offline, mostly in low- and middle-income
countries, unable to benefit from the social and
economic opportunities of the internet. The digital
divide is greatest in markets such as Bangladesh,
Pakistan and India, where 70–80% of the population
are not yet online.
3.1
Connecting the unconnected
36 Mobile addressing social challenges

10% 20% 30% 40% 50% 60% 70% 80% 90%
According to the GSMA’s Mobile Connectivity
Index,31
countries require four enablers to mobile
internet adoption to create the drivers of supply and
demand for mobile internet connectivity to flourish:
• infrastructure: the availability of network
coverage for high-performance mobile internet
• affordability: mobile services and devices at
price points commensurate with average levels of
national per-capita income
• consumer readiness: the awareness and digital
skills to value and use the internet and a cultural
environment that promotes gender equality in use
of mobile
• content: the availability of online content and
services that are accessible and relevant to the
local population.
Of the 2.4 billion unconnected across Asia Pacific,
the vast majority (85%) live in five countries – India,
China, Pakistan, Indonesia and Bangladesh. Each
of these countries faces challenges in fostering the
four enablers of mobile internet connectivity.
21%
21%
47%
54%
59%
29%
49%
41%
64%
39%
42%
39%
18%
30%
18%
27%
26%
23%
25%
25%
20%
35%
37%
24%
61%
49%
35%
18%
15%
47%
26%
33%
16%
27%
21%
37%
Asia Pacific
China
India
Malaysia
Thailand
Philippines
Bangladesh
Japan 46
2,403
28
49
65
156
644
18
950
163
131
153
Vietnam
Indonesia
Pakistan
Rest of APAC
Mobile internet Voice & text only Non-mobile
Subscriber breakdown in Asia Pacific, 2017
Percentage of population
Population
without mobile
internet (m)
31. http://www.mobileconnectivityindex.com/
0% 100%
37Mobile addressing social challenges

GSMA Mobile Connectivity Index
Mobile Connectivity Index
4 Enablers
Infrastructure Affordability Consumer
readiness
Content
13 Dimensions
• Mobile
infrastructure
• Network
performance
• Other enabling
infrastructure
• Spectrum
• Mobile tariffs
• Handset price
• Income
• Inequality
• Taxation
• Basic skills
• Gender equality
• Local relevance
• Availability
39 Indicators
Regional scores for 2016 on a scale of 0–100
Mobile
Connectivity
Index
Infrastructure Affordability
Consumer
readiness
Content
Mobile
internet
penetration
People
without
mobile
internet (m)
Asia Pacific
61 53 66 68 60 41% 2,403
China
71 64 70 73 76 54% 644
Indonesia
53 41 58 69 46 39% 163
India
49 40 63 45 49 29% 950
Bangladesh
48 38 51 52 54 21% 131
Pakistan
37 35 54 26 39 21% 156

Many countries in Asia Pacific lack adequate mobile
infrastructure, resulting in lagging connectivity in the
region. The challenges, however, differ from market to
market, as highlighted by the five countries in Figure 18:
Low 2G coverage:
Idea Cellular in India reported 2G population coverage of only 83% in Q4 2017, well
below the 95–100% of most countries. Jazz Pakistan reported 80% 2G coverage in Q2
2016, but no details of 2G coverage expansion have been announced since.
Low 4G coverage:
Despite progress over the last year, some markets still lag regional peers in the
availability of high-speed mobile networks. In Pakistan and Bangladesh, for example,
only 46% and 11% of the population, respectively, have access to 4G services, compared
to the regional average of 84%.32
4G speeds in India also fall well short of expectations.
Inadequate spectrum:
All five countries have still not completed the process of freeing up analogue television
spectrum in the 700 MHz band for use by mobile operators by switching to digital
TV signals. This 700 MHz band is needed to extend affordable 4G mobile broadband
services across all parts of countries in Asia Pacific – from urban centres to rural
villages. These five countries, and many others across the region that have failed
to make the digital switchover of analogue TV signals, now face a disadvantage in
supporting the rapidly growing uptake of mobile broadband as well as advanced 4G,
and in future, 5G services.
32. While India scores low in infrastructure, 4G networks have rolled out rapidly to cover almost 90% of the population, which should boost the country’s future score on infrastructure
and its overall index score.

Affordability is less of an issue in these five
countries compared to the regional average, as
ARPU levels are low. Bangladesh, India, Indonesia
and Pakistan have among the lowest ARPU levels
in the world, and smartphones are available for
less than $50. Nevertheless, due to wide income
disparities and high rates of poverty in some of
these countries, particularly India and Pakistan,
affordability remains a critical issue for the poor, for
whom the cost of mobile ownership far exceeds the
UN’s affordability threshold recommendation of 5%
of average monthly income (decreasing to 2% by
2025).33
Without the necessary digital skills and supporting
environment, individuals will not understand how
to use the mobile internet nor appreciate how it can
benefit them. The disadvantaged, and especially
women in countries of South Asia, might face
cultural obstacles preventing them from mobile
ownership and accessing the mobile internet.
It is therefore important to consider the skills
and education levels of a country, as well as the
degree of gender equality in education, finance
and the labour market: these factors influence
the Consumer readiness indicator of the Mobile
Connectivity Index.
India and Pakistan have particular challenges in
this regard. In these countries, the overall literacy
rate is between 55% and 70%, and only half the
population have at least some secondary education
or participate in the labour market. Furthermore,
gender inequality affects take-up in these countries:
female literacy is between 40% and 60%, the
male-to-female ratio of secondary education is
nearly 2:1, and the participation rate of women in
the labour force is below 25%.34
In terms of digital
literacy, 51% and 63% of mobile phone owners who
do not use the mobile internet in Pakistan and India,
respectively, state that they do not know what the
internet is, and a further 20% and 23% know what
the internet is but not that they could access it on
a mobile phone. In addition, around 20% of phone
owners in both countries say they do not use the
mobile internet because they find it difficult to use a
mobile handset.35
A lack of relevant content is another major issue,
particularly in Indonesia and Pakistan. Indonesia
has more than 700 languages (with 21 each spoken
by at least 1 million people),36
so availability of
content in an appropriate local language is a
particular shortcoming: for example, the GSMA
Mobile Connectivity Index highlights that only
16% of the population have access to apps in their
first language. Nearly half of phone owners in
Indonesia also say that they do not consider the
internet relevant to their needs.37
In Pakistan, the
Index reflects a low number of country-code, top-
level domains (ccTLDs), which means the country
has only a low level of domestic website creation.
Moreover, the top apps on the Google and Apple
app stores are only accessible to around 10%
of Pakistan’s population in a language they can
understand, and over half of phone owners claim
they do not find the internet sufficiently relevant.38
Engagement in social media is also low in Pakistan,
with only 14% of the population using social
networking services on their mobile phones,
versus an average of 34% across South Asia, and
57% in China.39
China outperforms the regional average in all
indicators. However, despite its relatively high
mobile internet penetration, China still has the most
mobile subscribers without access to the mobile
internet. Based on the country’s population of 1.4
billion; every percentage increase in mobile internet
penetration connects an extra 14 million people.
As these challenges around infrastructure,
affordability, consumer readiness and content are
addressed, we expect an additional 1 billion people
will gain access to the mobile internet across the
region by 2025, bringing the total to 2.7 billion, or
63% of the population.
33. For more information see the GSMA Intelligence report, Taxing mobile connectivity in Asia Pacific
34. World Bank
36. Ethnologue
39. We Are Social

At GSMA’s 2016 Mobile World Congress in
Barcelona, the mobile industry became the
first sector to commit to the United Nations’
Sustainable Development Goals (SDGs) – a
universal plan unanimously adopted in 2015 by
all 193 countries in the United Nations General
Assembly to end poverty, protect the planet
and ensure that all people enjoy peace and
prosperity.
Now two years into the UN’s 2030 Agenda for
Sustainable Development, the mobile industry
is having a big impact, as shown by its growing
contribution to all 17 SDGs.40
There are, however,
two areas of particular relevance to improved
SDGs in the Asia Pacific region.
3.2
Delivering greater impact for social initiatives
40. 2017 Mobile Industry Impact Report: Sustainable Development Goals, GSMA, 2017

To respond effectively and efficiently to the spread
of infectious diseases, pollution, earthquakes and
other disasters, governments and NGOs need
to know where the affected people are, in which
direction they are moving, and how the environment
is changing. Mobile operators can help provide that
information, while respecting individuals’ privacy
and safeguarding personal data. Through the
GSMA, mobile operators are establishing a common
framework and ecosystem approach that can
support strategic planning, decision-making, and
preparedness and response to help people recover
from a disaster, contain an epidemic and contend
with environmental pollution.
Backed worldwide by 20 operators, 11 of whom have
operations in Asia Pacific, the GSMA’s Big Data for
Social Good initiative is developing a consistent
approach and processes that mobile operators
can use to share insights with public agencies and
NGOs while building an ecosystem to support timely
planning and response.
Mobile operators in India, Bangladesh, Myanmar,
Thailand and Japan are currently testing pilot
projects of Big Data for Social Good:
• In India, Bharti Airtel and the GSMA are working
with Be He@lthy, Be Mobile (a joint initiative
by the WHO and the ITU) to identify whether
insights from mobile data can support national
health systems. The trial project is looking at
how a better understanding of the volume and
patterns of population movements can improve
planning to control tuberculosis (TB), one of the
biggest killers in India. In the pilot, mobile data
is providing detailed, up-to-date behavioural
insights across a population of 280 million people,
delivering a combination of scale and granularity
that is unattainable from any other data source.
The trial is identifying potential hotspots at higher
risk of TB, which could help target interventions
such as vaccination programmes, initiatives to
curtail smoking, awareness campaigns and the
deployment of mobile clinics.
• After Telenor’s successful collaboration with
Harvard’s School of Public Health to address
the spread of dengue fever in Pakistan, Telenor,
Harvard, and the Mahidol Oxford Tropical
Medicine Research Unit in Bangkok are now
addressing Multi-Drug-Resistant (MDR) malaria,
which is spreading in Asia. In 2017, preparatory
work began for studies on the spread of MDR
malaria in a contiguous, three-nation area of
Thailand, Bangladesh and Myanmar.
• In Japan, mobile operators are working with the
Disaster Management Bureau of Japan’s Cabinet
to allow rescue teams to act quickly and prioritise
the deployment of resources in the event of a
large-scale disaster.
In these trials, operators are capturing anonymised
and aggregated mobile indicators in a consistent
format, while protecting the privacy of individuals
via an agreed code of conduct, before combining
the data with other forms of information to
provide useful insights for public officials and non-
governmental organisations.
Big Data for Social Good:
Leveraging mobile operators’ big data capabilities to address humanitarian
crises, including epidemics and natural disasters
1

2
While mobile connectivity is spreading quickly, it
is not spreading equally – and women are being
left behind. In low- and middle-income countries,
women have less access than men to technology,
and especially to mobile telephony. For example,
women in Southern Asia are 26% less likely to own
a mobile phone than men and 70% less likely to
use the mobile internet.41
This is by far the largest
gender gap of any region in the world. The gap is
especially large in Pakistan, Bangladesh and India.
Unequal access to mobile technology threatens to
exacerbate the inequalities that women already
experience, and concerted action is needed to
reduce and eliminate the gender gap in mobile
ownership and use. Successfully doing so will
benefit women, their families and their communities,
while helping achieve some of the UN’s SDGs.
Closing the mobile gender gap will also help the
mobile industry and provide an effective catalyst
for economic growth: for instance, a 10% increase in
a country’s internet penetration42
results in a 0.25–
1.38% increase in its GDP.43
Furthermore, if mobile
operators in low- and middle-income countries
could close the gender gap in mobile ownership and
mobile internet use today, this would generate an
estimated incremental revenue of $15 billion over
the coming year.44
In South Asia, the following mobile operators have
made a formal Connected Women commitment to
improve female digital inclusion: Aircel India, Airtel
India, Dialog Axiata, Mobitel Sri Lanka, Ooredoo
Maldives, Robi Axiata, Telenor Pakistan and
Vodafone India.
The wider ecosystem has also been trying to close
the gender gap:
• In Bangladesh, the Infolady Social Enterprise (or
iSocial) empowers communities through female
entrepreneurship. The women, known as Kallyani,
travel between villages on bicycles and come
equipped with sample devices that villagers can
use such as laptops, tablets, smartphones, Wi-Fi
hotspots and digital cameras. The women act
as entrepreneurs by charging for digital services
to these communities, and the same Infoladies
are trained to provide simple legal and medical
advice, supporting marginalised communities
to improve their well-being and make informed
choices. Since the launch of the initiative, via a
four-phase pilot, over 100 women in Bangladesh
have become such entrepreneurial, digital village
itinerants.
• In India, Google Internet Saathis, launched by
Google India and the Tata Trusts Collectives for
Integrated Livelihood Initiatives, addresses the
digital gender gap by promoting digital literacy
among rural women. The programme trains
women to become master trainers, or “saathis”
(companions), equipped with a smartphone or
tablet and a bicycle to help dispersed women
in their villages experience the benefits of the
internet. By August 2017, 25,000 internet Saathis
reached 100,000 villages across 10 Indian states.
Almost 90% of the female participants in the
training sessions claimed a better understanding
of the internet from the experience.45
Connected women:
Supporting initiatives in low- and middle-income countries to reduce the gender
gap in mobile internet and mobile money
41. The Mobile Gender Gap Report 2018, GSMA
42. For most developing countries, users access the internet mainly via mobile technology.
43. The increase in GDP depends on a country’s level of development and market conditions. A range of sources address the topic of the economic impact of internet access. See, for
example: What is the impact of mobile telephony on economic growth? A report for the GSM Association, Deloitte, 2012; and The Impact of Broadband on the Economy: Research to
Date and Policy Issues, ITU, 2012
44. The GSMA estimates that, in low- and middle-income countries, 184 million and 327 million fewer women than men own a mobile phone and use the mobile internet respectively. The
$15 billion estimate assumes that this gender gap would be closed during 2018, and represents the subsequent 12-month incremental revenue opportunity. For more information, see
the GSMA report, The Mobile Gender Gap Report 2018
45. “Empowering women in 100,000 villages with Internet Saathi program”, Google Blog, August 2017

Advancing
digital societies
in Asia Pacific
04
Mobile internet uptake is spreading rapidly across
Asia Pacific. The broader mobile ecosystem now
makes an important contribution to economic
growth and helps address a range of social and
developmental issues. This large and diverse region
encompasses a range of countries at different
stages of digital development; each has its own
unique challenges and outlook and therefore its own
pathway to digital transformation.
Recognising the value of mobile to society,
many governments are promoting their digital
economy and the protection of consumers in the
online environment, while ensuring the benefits
of connectivity reach remote and underserved
communities. As the mobile industry looks to 5G to
meet the demands of a digitised world, the need for
pro-investment policies and modernised regulatory
regimes has never been greater.
A digital society refers to the seamless interaction
among all aspects of an individual’s life via digital
platforms, using a network of intelligently connected
devices and interoperable services. Citizens in a
digital society can access and interact anytime and
anywhere with public and private services, such as
utilities, education, healthcare, retail and transport,
leading to increased efficiency and productivity
for themselves and their institutions, resulting in
a better quality of life. Services within a digital
society fall into three broad categories: digital
citizenship, digital lifestyle and digital commerce,
with connectivity and digital identity as foundational
components.46
46. For more information see the GSMA Intelligence reports Building digital societies in Asia and Advancing digital societies in Asia.
44 Advancing digital societies in Asia Pacific

Key components of a digital society
Interaction between
government, businesses and
citizens speciﬁcally in the
provision and use of public
services over digital channels
Use of smart devices to
access locally relevant content
and non-core communication
solutions that offer a much
more convenient experience
Simpliﬁes a commerce
activity by expanding access
to marketplaces, replacing
physical cash, and facilitating
the processing and delivery of
orders over digital channels
DIGITAL
CITIZENSHIP
DIGITAL
LIFESTYLE
DIGITAL
COMMERCE
Proof of identity is a prerequisite to socioeconomic
development and essential to accessing basic
services. Mobile technology is uniquely positioned
to enable accessible and inclusive digital identity
Fast, reliable and continuous individual access
to the internet is the foundation for the creation,
distribution and consumption of digital applications
and services
DIGITAL IDENTITY
CONNECTIVITY
45Advancing digital societies in Asia Pacific

As more countries continue to implement their
strategies for digital transformation, proving identity
online will become essential to participation and
inclusion. To create digital societies, governments
worldwide recognise the importance of being able
to verify an individual’s identity electronically in
compliance with regulations around Know Your
Customer (KYC) and for anti-money-laundering.
Governments can help establish digital identity
systems. Increasing governmental use of digital
technology can deliver benefits to both citizens
and the state. From the individual’s perspective, a
digital identity acts as a gateway to enable faster
and easier interaction with public institutions.
Moving essential services such as healthcare and
education to digital platforms can help develop
citizens’ interest and involvement in digital identity
programmes and fuel a virtuous circle that boosts
economic growth, creates more jobs, reduces
poverty and improves quality of life. Additionally,
a digital identity is essential for individuals to
participate in a full digital lifestyle – particularly
the use of smart devices to access a wide
range of locally relevant content and non-core
communication solutions. Meanwhile, governments
can move specific services online, such as the
delivery of transfer payments from the state, to
foster the digitisation of identities, creating a
platform for the various agents in an economy to
engage, communicate and share information more
effectively.47
Having a digital identity is vital in countries where
SIM registration is mandatory. However, of the 29
countries in Asia Pacific mandating SIM registration
and requiring mobile operators to capture and store
personal data when registering customers, 15 do not
have a comprehensive legal framework in place to
guarantee mobile users’ privacy and to protect their
data from improper use. Three are considering such
an implementation.48
4.1
Identity as the cornerstone for a digital society
After the recent revelation that Cambridge
Analytica siphoned personal data from millions
of Facebook users, trust in various forms of social
media has been shaken. Thus, data privacy and the
security of digital identities has assumed greater
importance. While mobile operators apply high
standards of privacy, data protection and security
to their customers’ data, the inadequacy of legal
frameworks can worsen customer perceptions
of operators’ use of their data and potentially
reduce their willingness to use mobile devices to
access identity-linked services. A digital identity
system must have a foundation of trust if it is to
generate widespread acceptance among users.
As highlighted by GSMA research, the public
increasingly appreciates the importance of a robust
‘trust framework’ (as illustrated in Figure 20).49
4.2
Fostering trust in the digital environment
47. For more information, see the forthcoming GSMA Intelligence report Digital identities: advancing digital societies in Asia Pacific
48. Access to Mobile Services and Proof-of-Identity: Global policy trends, dependencies and risks, GSMA, 2018
49. Regulatory and policy trends impacting Digital Identity and the role of mobile: Considerations for emerging markets, GSMA, 2016

The rules of a typical trust framework for identity systems
For their part, mobile operators are a trusted party
and are able to provide convenience, privacy and
security through identity management in the digital
world. The GSMA has worked with mobile operators
to develop Mobile Connect – a federated identity
management system that links a person’s electronic
identity and attributes across multiple, distinct
identity management systems. A secure and trusted
digital identity can deliver value across economies,
society and industry, and can save time and money.
Digital identity is an example of a readily accessible
agenda that can turn into shared goals for countries
in Asia Pacific. For example, working together on
harmonising regulatory frameworks or systems for
digital IDs can introduce seamless ways of travelling,
provide convenience for consumers and businesses
by removing barriers between countries, and
enhance trust in the overall online system. This kind
of concerted action can help governments reap the
benefits that stem from digital identity and address
the challenges presented by increasing cross-border
data flows and cyber-attacks that affect digital
commerce between countries and overall trade.
When governments develop a national strategy
underpinned by an enabling policy environment,
the prospects are much better for mobile-enabled,
digital identity services to accelerate a country’s
digital transformation, support digital and financial
inclusion, and offer the benefits of convenience
and reach.
Private rules adopted
by scheme participants
by contract or unilateral
undertaking or imposed
by government
ID scheme
specifications,
standards and
procedures
Identity, data protection and
privacy laws (e.g. eIDAS),
and sector specific identity
laws and regulations
Wider range of relevant laws
(e.g. warranty, contract, tort,
competition law, dispute
resolution, law of damages)
General
publicly
applicable
law
The combination
must result in an
operationally effective
system that protects
customers and ensures a
reasonable allocation of risk
and opportunity through
rights and liabilities

GUAM
NORTHERN
MARIANA
ISLANDS
PALAU
CHINA
HONG
KONG
JAPAN
KOREA, NORTH
KOREA, SOUTH
MACAO
MONGOLIA
TAIWAN
BANGLADESH
BHUTAN
DIEGO GARCIA
INDIA
MALDIVES
NEPALPAKISTAN
SRI LANKA
BRUNEI DARUSSALAM
CAMBODIA
INDONESIA
LAOS
MALAYSIA
MYANMAR
PHILIPPINES
SINGAPORE
THAILAND
TIMOR-LESTE
VIETNAM
COCOS (KEELING) ISLANDS
AUSTRALIA
PAPUA
NEW GUINEA
Sub-regions in Asia Pacific
South Asia
East Asia
Oceania
Southeast Asia

AMERICAN
SAMOA
COOK ISLANDS
FIJI
FRENCH POLYNESIA
KIRIBATI
MARSHALL
ISLANDSMICRONESIA
NAURU
NEW
CALEDONIA
NIUE
NORFOLK
ISLAND
SAMOA
SOLOMON
ISLANDS TOKELAU
TONGA
TUVALU
VANUATU
WALLIS AND
FUTUNA ISLANDS
NEW ZEALAND

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Tel: +44 (0)20 7356 0600
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Mobile Economy Report Highlights Slowing Growth in Asia Pacific

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