Fixed Telecommunications Infrastructure Market in Asia Underpins its Booming Mobile & Broadband Sectors

Share Article adds new market research report "Asia - Fixed Telecommunications Infrastructure" to its store. Markets covered include: Afghanistan, Armenia, Azerbaijan, Bangladesh, Bhutan, Brunei Darussalam, Cambodia, China, East Timor, Georgia, Hong Kong, India, Indonesia, Japan, Kazakhstan, Kyrgyzstan, Laos, Macau, Malaysia, Maldives, Mongolia, Myanmar (Burma), Nepal, North Korea, Pakistan, Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Tajikistan, Thailand, Turkmenistan, Uzbekistan, Vietnam.

In 2011, 30 million fixed (wired) broadband subscriptions were added in China alone, this being about half of total such subscribers added worldwide

The changing nature of the telecom market has had a major impact on the approach to investment in Asian telecom infrastructure. With shifting revenue patterns across the market segments and falling ARPUs on many services, operators have been more selective about what they actually invest in. In many of the developing nations of the region, the building of fixed-line infrastructure was not far advanced before it was overwhelmed by the introduction of mobile infrastructure. This created the phenomenon of ‘substitution’ in many of the markets of Asia (where mobile services perform the function of the non-existent fixed services). Most importantly, the fixed-line numbers have only been increasing marginally in recent years, with a significant number of countries in Asia starting to see a decline in fixed-line numbers.

The focus of infrastructure building has been shifting. There has been a major push to upgrade domestic telecoms networks to Next Generation Networks (NGNs). This process is seeing large scale investment by Asia’s leading telecoms markets in new-generation IP-based telecommunications networks. At the same time there has been a major surge in infrastructure building as mostly developed economies roll out National Broadband Networks (NBNs). These networks come in various ‘shapes and sizes’ as governments work with operators to tackle the strategic challenge of delivering high speed to the nation. Not surprisingly the NBNs rely heavily upon fibre; in some cases it is Fibre to the Premises (FttP), while in others it might be Fibre to the Node (FttN). And the cost varies accordingly. Those countries that have government backing for NBN roll-out are the ones that are setting the pace.

In addition to the national networks, international connectivity remains central to the overall effectiveness of the region’s telecommunications services. Submarine cable routes criss-cross the Asia Pacific area, providing both intra-regional and inter-regional networks. This sector of the market has been characterized by widely fluctuating supply and demand, which in turn has seen somewhat erratic investment strategies. Submarine projects are subject to this boom and bust market phenomena, with planned projects commonly being delayed or abandoned, consortia being reshaped, etc. In fact, over-supply of capacity has been common in the Asian market. More recently investments have been less speculative and more focused on predicted growth.
As the demand for wholesale services continues to rise in Asia, still driven in the short term by voice, but in the longer term by data, there has been a boom in IP-based services, with the volume of international Voice over Internet Protocol (VoIP) traffic into and out of Asia having increased at a rapid rate at the expense of the traditional International Direct Dial (IDD) traffic. The industry will watch closely to see how this settles into a pattern of more predictable growth in demand.

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Asia – key developments in infrastructure

  •     Asia’s networks and infrastructure supported a total of more than 3.5 billion telephone subscribers coming into 2012; of these, an estimated 580 million were fixed-line subscribers and 2.9 billion were mobile subscribers;
  •     Asia’s developed markets had built or were building their NGNs, with IP shaping as the primary delivery platform for telecom services across the region;
  •     After annual growth of 20%-30% in the region’s mobile market during the 2005/2010 period, 2011 saw growth fall to around 10%, with looking likely to continue for the next few years;
  •     Most tellingly, coming into 2012 Asia claimed 49% of the world’s total mobile subscriber base;
  •     Two of Asia’s markets – South Korea and Singapore – had more mobile broadband subscribers than population by end 2011; Japan was not far behind on 90% mobile broadband penetration at the time;
  •     While mobile broadband was expanding rapidly, fixed (wired) broadband remained a key component of the infrastructure in Asia; in 2011 30 million fixed (wired) broadband subscriptions were added in China alone, this being about half of total such subscribers added worldwide;
  •     Asia’s all-important submarine cable market continues to attract interest from investors anticipating an increased demand for bandwidth that will put pressure on capacity;
  •     With a series of system outages drawing attention to the highly vulnerable nature of these key systems, redundancy has become a critical issue for submarine cable systems in the region and provides further incentive for investment in this type of infrastructure;

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