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CAMBRIDGE, MA, July 23, 2007 – Leading global telecommunications intelligence firm Pyramid Research, at its second annual Asia-Pacific Telecom Summit, presented 10 key trends that will take place in the Asia-Pacific telecom sector in 2008.
More than 120 senior executives from the operator, vendor, and financial services communities in the region attended the Asia-Pacific Telecom Summit July 10-11, 2007. With two sessions held in Seoul and Tokyo, Pyramid Research presented an overview of developing trends and a strategic analysis of the future of WiMAX in the region.
Senior Analyst Marc Einstein presented the following 10 critical developments in the Asia-Pacific region for 2008:
1. Subscriber growth – Indonesia’s broadband market will have the highest growth rate in Asia at 45% per year for the next five years, leading the region’s subscriber growth. China, India, Indonesia, and Pakistan will hold 80% of Asia’s mobile subscribers in 2012, when regional subscriptions total 2.2bn. Expect higher churn, less revenue, and consolidation in 2008 in developed markets. Low ARPUs will facilitate a transition to IMS.
2. Mobile data – Asia-Pacific mobile data revenues will almost triple over the next five years to US$110bn, but increased broadband penetration and flat-rate plans will create significant threats to this growth. The mobile data market will grow, but the spending per user will start to decrease as broadband becomes more available in emerging markets.
3. Mobile advertising – Competition from free advertising models will serve as a litmus test for future business models in the region.
4. WiMAX – The scale of WiMAX deployment remains elusive in the region. Market activities in the US, Japan, and Korea will determine the ultimate role the technology will play in the pre-4G environment.
5. IPTV – Despite healthy take-up of IPTV in markets such as Hong Kong, Western Europe, and Korea, profitability with remain elusive. For established operators like PCCW and Telefónica, 2008 will be a crucial year.
6. Handset devices – China, India, and parts of Southeast Asia will be the few remaining markets driven by organic handset device growth in the Asia-Pacific region. Expect higher churn, less revenue, and consolidation in 2008 in developed markets.
7. Capital expenditures – Capex by the top 15 global mobile network operators will reach US$71bn in 2007 and gradually decrease by 2% per year. Like the number of mobile subscribers, Capex has peaked in most markets. Despite high profitability, emerging market operators must further reduce capex and opex spending as ARPUs dip below US$5. Vendors will rely less on large legacy accounts and increasingly look to markets like India, Indonesia, and Bangladesh.
8. Mergers and acquisitions – M&A opportunities will be limited in the region, and multiple bidders will drive up prices quickly. While diversification is important, beware of overbidding and regulatory issues in emerging markets.
9. Convergence – Convergence will be a driver of merger and acquisition activities. The entrance of telecom operators into the convergence space, however, has driven up the price of content, and expensive content can quickly ruin margins.
10. Mobile virtual network operators – Despite some major failures in the MVNO space, Pyramid Research still sees a niche for the business model. Above all, consumers are price-sensitive, and handsets are crucial. Pyramid Research predicts global MVNO subscribers to reach 129m by 2011.
About Pyramid Research
Pyramid Research is a leading market research firm for the communication, technology, and media industries. We have more than 8,000 industry connections to service providers, operators, vendors, regulators, governments, consumer associations, and financial institutions. For 20 years we have advised executives and decision-makers at these organizations on how to stay ahead of market trends, understand competitive threats, and capitalize on opportunities. For more information, visit www.pyramidresearch.com.
Safe Harbor Statement
This release contains forward-looking statements, which are made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are commonly identified by words such as “would,” “may,” “will,” “expects,” and other terms with similar meaning. Forward-looking statements are based on current beliefs, assumptions, and expectations and speak only as of the date of this release and involve risks and uncertainties that could cause actual results to differ materially from current expectations. Readers are strongly urged to read the full cautionary statements contained in those materials. We assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or any other reason.
Press Contact:
Dianne Liu
Pyramid Research
Tel: +1 617 494 1515 ext. 272
Email: dliu@pyr.com
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