SINGAPORE-With the worst effects of the economic crisis over, telecommunications companies in countries throughout the Asia-Pacific region are likely to advance rapidly in these promising cellular markets, said research firm Frost & Sullivan.
The firm’s new report, “Pan-Asian Cellular Service Markets,” said the region’s cellular subscriber base is expected to expand to 167 million by 2005 at a compound annual growth rate of 22.6 percent. The region includes Australia, New Zealand, India, China, Malaysia, Indonesia, the Philippines, Singapore and Thailand.
It is likely that the number of mobile subscribers will exceed the number of fixed-line subscribers sometime in the middle of this decade, according to the report.
Government regulations and natural attrition are causing most of the analog networks to be phased out, although the Philippines is expected to have a significant number of analog subscribers by the end of the forecast period, the report said. Global System for Mobile communications 900 is the dominant digital technology in the region.
Prepaid has become one of the key market drivers in the Pan-Asian region, where prepaid customers account for nearly 40 percent of subscribers in some markets.
“By providing the prepaid option … cellular services companies can bring a new segment of the population to the cellular services market,” said Anil Joseph, analyst with Frost & Sullivan. “Prepaid subscribers are expected to constitute more than 50 percent of the total cellular subscriber base by the end of the forecast period,” Joseph said.
Other market drivers include lower handset prices, increased market expansion and the introduction of value-added services, such as voice mail and roaming. The regulatory authority in Singapore has already come out with a consultation paper about the introduction of third-generation technology-based networks, and cellular service providers in Australia and New Zealand also are expected to begin operating 3G networks by 2005, said the report.
Price remains a primary differentiating factor between services, Frost & Sullivan said. High fixed costs and relatively small gains for each new cellular customer are creating a scramble among service providers for new subscribers.
Many carriers are using low prices as a means of distinguishing their products from their competitors, but the strategy will be difficult to maintain in the long run, said the report. Until a better strategy is found, however, competition will continue to play a major role in forcing prices down.
