Emerging Asia Pacific telecoms market: trends and …Emerging Asia–Pacific telecoms market: trends...

© Analysys Mason Limited 2014

Emerging Asia–Pacific telecoms market: trends and forecasts 2014–2019

Research Forecast Report

Emerging Asia–Pacific telecoms market: trends and

forecasts 2014–2019

July 2014

Satvik Singhania, Nipun Jaiswal and Tom Mowat



About this report

This report provides:

a 5-year forecast of more than 100 mobile and fixed

KPIs for the emerging Asia–Pacific (EMAP) region as a

whole and for key countries

an in-depth analysis of the trends, drivers and

well-documented forecast assumptions for each type

of mobile and fixed service, and for key countries

an overview of operator strategies and country-specific

topics, in order to highlight similarities and differences by

means of a cross-country comparison

a summary of results, key implications and

recommendations for mobile and fixed operators.

Our forecasts are informed by on-the-ground regional market

experts from our topic-led Research programmes and

Consulting division, as well as external interviews.

In addition to our robust set of historical data, our forecasts

draw on a unique and in-house modelling tool, which applies

a rigorous methodology (reconciliation of different sources,

standard definitions, top-down and bottom-up modelling).

For the complete data set and our data series definitions, see

the accompanying Excel file at

www.analysysmason.com/EMAP-2014.

Geographical

coverage

Major KPIs

Regions modelled:

Emerging Asia–Pacific

Countries modelled individually

Bangladesh

China

India

Indonesia

Malaysia

Pakistan

Thailand

Vietnam

Connections Revenue

Mobile

Handset, mobile broadband1, M2M2

Prepaid, contract

2G, 3G, 4G

Smartphone, non-smartphone

Fixed

Voice, broadband, IPTV, dial-up

Narrowband voice, VoBB

DSL, FTTH/B, cable, BFWA

Mobile

Service3, retail

Prepaid, contract

Handset, mobile broadband1, M2M2

Handset voice, messaging, data

Fixed

Service3, retail

Voice, broadband, IPTV, dial-up, BNS

DSL, FTTH/B, cable, BFWA

ARPU

Voice traffic Mobile:

SIMs, handset

Prepaid, contract

Handset voice, data

Fixed and mobile

Outgoing minutes,

MoU

1 Includes USB modem, and mid- and large-screen, but not handset-based data.

2 M2M connections and revenue figures include mobile services only.

3 Service revenue is the sum of retail and wholesale revenue.

Figure 1: Summary of report coverage [Source: Analysys Mason, 2014]

2



Contents

9. Executive summary

10. Mobile voice revenue will plateau and mobile handset data will form an

increasing proportion of total telecoms retail revenue

11. Mobile messaging and fixed voice and narrowband will be the only two

service types to register negative revenue growth during 2013–2019

12. China and India will continue to be the two largest markets in EMAP,

together accounting for almost 78% of retail revenue in the region

13. Compared with our previous forecast, mobile handset data revenue will

be higher in 2018, but fixed broadband and IPTV, and mobile voice, are

lower

14. Key trends, drivers and assumptions for the mobile market

15. Key trends, drivers and assumptions for the fixed market

16. Key implications and recommendations for telecoms operators

17. Regional forecasts and cross-country comparison

18. Geographical coverage: Our forecasts include a detailed breakdown of

Vietnam for the first time

19. Market context: Most telecoms markets in EMAP are yet to reach

saturation

20. Fixed and mobile penetration: Fixed broadband penetration is low and

will increase to 9% by 2019, while mobile handset penetration will reach

96%

21. Mobile penetration: Penetration is at only 76.4% despite significant

multiple-SIM ownership and it will continue to increase

3

22. Mobile connections: China will drive the growth in LTE, although the

number of 3G connections will continue to increase

23. Smartphones and LTE: Smartphone take-up varies by country, but will

account for 52.4% of handsets in the region by 2019

24. Mobile ARPU: The rate of decline of mobile ARPU will slow down

because increased spend on data will partially offset the decline in voice

and SMS

25. Fixed services: Fibre broadband connections will drive growth and

mobile connections will continue to replace fixed voice

26. Fixed broadband: Penetration is low and growing in all markets,

particularly Indonesia

27. Revenue and ARPU: Mobile handset data will drive revenue growth and

fixed broadband will increase at slightly above the overall market rate

28. Service revenue: Distribution of telecoms service revenue will remain

largely constant during 2013–2019

29. Revenue mix: Mobile’s share of total service revenue will increase

during the next 6 years in every country except Indonesia

30. Individual country forecasts

31. Bangladesh: Solid growth is expected in mobile broadband revenue, but

growth in mobile voice revenue will subside

32. Bangladesh: Key trends, drivers and assumptions

33. Bangladesh – mobile: Rising mobile penetration is expected and

operators are trying to curb the mobile ARPU decline

Slide no. Slide no.



Contents

34. Bangladesh – fixed: Penetration of fixed broadband will continue to be

low because consumers prefer mobile broadband

35. China: Telecoms revenue growth will continue to be driven by handset

data spend, as fixed voice faces increased pressure

36. China: Key trends, drivers and assumptions

37. China – mobile: The launch of 4G will continue to drive growth,

increasing handset data spend and stabilising ARPU

38. China – fixed: Voice continues to be under pressure from increasing

mobile penetration, while broadband growth slowed

39. India: Service revenue growth slowed in 2013, because of a sharp

decline in mobile voice revenue growth, and this will persist

40. India: Key trends, drivers and assumptions

41. India – mobile: Mobile penetration will continue to increase, as will

smartphone adoption, although 4G will not make any impact

42. India – fixed: Broadband penetration growth halted in 2013, but is

expected to resume in 2015, while voice continues to decline

43. Indonesia: Telecoms retail revenue growth continues across all

segments apart from mobile voice and fixed voice

44. Indonesia: Key trends, drivers and assumptions

45. Indonesia – mobile: Penetration will continue to grow as operators push

and promote affordable mobile devices and services

46. Indonesia – fixed: Telkom’s ambitious plans for extensive fibre roll-out

are expected to boost fixed broadband adoption in the country

4

47. Malaysia: Total telecoms service revenue growth will flatten out before

2019 as the market approaches maturity and saturation

48. Malaysia: Key trends, drivers and assumptions

49. Malaysia – mobile: LTE adoption is expected to rise as operators boost

coverage and seed the market with 4G handsets

50. Malaysia – fixed: Fibre will be the major driver of fixed broadband

growth and will boost IPTV adoption

51. Pakistan: Handset data revenue will drive growth since 3G services

were launched in May 2014, while voice revenue will stagnate

52. Pakistan: Key trends, drivers and assumptions

53. Pakistan – mobile: The market has significant room for growth, although

increased competition for 3G will drive down ARPU

54. Pakistan – fixed: Service penetration is low, but voice connections are

declining and broadband growth is slowing

55. Thailand: Almost all telecoms market areas will grow during

2013–2019, particularly mobile data services and fixed broadband

56. Thailand: Key trends, drivers and assumptions

57. Thailand – mobile: High mobile penetration will continue to grow further

propelled by rising smartphone take-up and 3G adoption

58. Thailand – fixed: DSL connections will continue to increase but growth

will be mostly driven by fibre broadband

59. Vietnam: Service revenue decreased significantly in 2013 because of a

decline in mobile voice, but is expected to stabilise in 2015

Slide no. Slide no.



Contents

5

60. Vietnam: Key trends, drivers and assumptions

61. Vietnam – mobile: Growth in mobile connections slowed in 2013 as

operators increased 3G prices and SIM restrictions were imposed

62. Vietnam – fixed: Fibre broadband connections will provide limited

growth while voice connections are declining slowly

63. About the authors and Analysys Mason

64. About the authors

65. About Analysys Mason

66. Research from Analysys Mason

67. Consulting from Analysys Mason

Slide no.



List of figures

Figure 1: About this report

Figure 2: Telecoms retail revenue by service type and total service revenue

(retail and wholesale), emerging Asia–Pacific, 2009–2019

Figure 3: Telecoms retail revenue growth by service type, emerging Asia–

Pacific, 2013–2019

Figure 4: CAGRs for fixed and mobile retail revenue (2013–2019) and

market size by total retail revenue (2019), by country, emerging

Asia–Pacific

Figure 5: Telecoms retail revenue by service type and total service

revenue, previous and new forecasts, emerging Asia–Pacific,

2013 and 2018

Figure 6: Summary of key drivers and assumptions for the mobile market,

emerging Asia–Pacific

Figure 7: Summary of key drivers and assumptions for the fixed market,

emerging Asia–Pacific

Figure 8: Mobile connections by technology generation and fixed

broadband household penetration, by country, 2019

Figure 9: Metrics for the eight countries modelled individually in emerging

Asia–Pacific, 2013

Figure 10: Fixed and mobile penetration rates by service type, emerging

Asia–Pacific, 2009–2019

Figure 11: Connections by service type, and growth rates, emerging Asia–

Pacific, 2013–2019

Figure 12: Active mobile SIM penetration by country (excluding M2M),

emerging Asia–Pacific, 2009–2019

6

Figure 13: Mobile connections by technology generation (excluding M2M),

and 3G and 4G’s share of connections, emerging Asia–Pacific,

2009–2019

Figure 14: Smartphones as a percentage of handsets, and LTE’s share of

total connections (excluding M2M), emerging Asia–Pacific, 2013

and 2019

Figure 15: Mobile ARPU by country, emerging Asia–Pacific, 2009–2019

Figure 16: Fixed broadband connections by type, and fixed voice, IPTV and

mobile broadband connections, emerging Asia–Pacific, 2009–

2019

Figure 17: Fixed broadband penetration of households by country, emerging

Asia–Pacific, 2009–2019

Figure 18: Telecoms retail revenue by service type, fixed voice and fixed

broadband ASPU, and mobile ARPU, emerging Asia–Pacific,

2009–2019

Figure 19: Telecoms retail revenue by service type, total service revenue

and growth rates, emerging Asia–Pacific, 2013–2019

Figure 20: Service revenue by country, emerging Asia–Pacific, 2013

Figure 21: Service revenue by country, emerging Asia–Pacific, 2019

Figure 22: Telecoms retail revenue by service type, and total service

revenue (retail and wholesale), by country, emerging Asia–

Pacific, 2013 and 2019


(retail and wholesale), Bangladesh, 2009–2019


and growth rates, Bangladesh, 2013–2019


Emerging Asia–Pacific telecoms market: trends and forecasts 2014–2019 7

List of figures

Figure 25: Connections by type, and growth rates, Bangladesh, 2013–2019

Figure 26: Summary of key drivers and assumptions, Bangladesh

Figure 27: Mobile, smartphone and 4G penetration rates, Bangladesh,

2009–2018

Figure 28: ARPU rates by type, Bangladesh, 2009–2018

Figure 29: Fixed penetration rates by service type, Bangladesh, 2009–2018

Figure 30: Fixed ASPU rates by service type, Bangladesh, 2009–2018


(retail and wholesale), China, 2009–2019


and growth rates, China, 2013–2019

Figure 33: Connections by type, and growth rates, China, 2013–2019

Figure 34: Summary of key drivers and assumptions, China

Figure 35: Mobile, smartphone and 4G penetration rates, China, 2009–2019

Figure 36: ARPU rates by type, China, 2009–2019

Figure 37: Fixed penetration rates by service type, China, 2009–2019

Figure 38: Fixed ASPU rates by service type, China, 2009–2019


(retail and wholesale), India, 2009–2019


and growth rates, India, 2013–2019

Figure 41: Connections by type, and growth rates, India, 2013–2019

Figure 42: Summary of key drivers and assumptions, India

Figure 43: Mobile, smartphone and 4G penetration rates, India, 2009–2019

Figure 44: ARPU rates by type, India, 2009–2019

Figure 45: Fixed penetration rates by service type, India, 2009–2019

Figure 46: Fixed ASPU rates by service type, India, 2009–2019


(retail and wholesale), Indonesia, 2009–2018


and growth rates, Indonesia, 2013–2019

Figure 49: Connections by type, and growth rates, Indonesia, 2013–2019

Figure 50: Summary of key drivers and assumptions, Indonesia

Figure 51: Mobile, smartphone and 4G penetration rates, Indonesia, 2009–

2018

Figure 52: ARPU rates by type, Indonesia, 2009–2018

Figure 53: Fixed penetration rates by service type, Indonesia, 2009–2018

Figure 54: Fixed ASPU rates by service type, Indonesia, 2009–2018


(retail and wholesale), Malaysia, 2009–2018


and growth rates, Malaysia, 2013–2019

Figure 57: Connections by type, and growth rates, Malaysia, 2013–2019

Figure 58: Summary of key drivers and assumptions, Malaysia

Figure 59: Mobile, smartphone and 4G penetration rates, Malaysia, 2009–

2018

Figure 60: ARPU rates by type, Malaysia, 2009–2018

Figure 61: Fixed penetration rates by service type, Malaysia, 2009–2018



List of figures

8

Figure 62: Fixed ASPU rates by service type, Malaysia, 2009–2018


(retail and wholesale), Pakistan, 2009–2019


and growth rates, Pakistan, 2013–2019

Figure 65: Connections by type, and growth rates, Pakistan, 2013–2019

Figure 66: Summary of key drivers and assumptions, Pakistan

Figure 67: Mobile, smartphone and 4G penetration rates, Pakistan, 2009–

2019

Figure 68: ARPU rates by type, Pakistan, 2009–2019

Figure 69: Fixed penetration rates by service type, Pakistan, 2009–2019

Figure 70: Fixed ASPU rates by service type, Pakistan, 2009–2019


(retail and wholesale), Thailand, 2009–2019


and growth rates, Thailand, 2013–2019

Figure 73: Connections by type, and growth rates, Thailand, 2013–2019

Figure 74: Summary of key drivers and assumptions, Thailand

Figure 75: Mobile, smartphone and 4G penetration rates, Thailand, 2009–

2019

Figure 76: ARPU rates by type, Thailand, 2009–2019

Figure 77: Fixed penetration rates by service type, Thailand, 2009–2019

Figure 78: Fixed ASPU rates by service type, Thailand, 2009–2019


(retail and wholesale), Vietnam, 2009–2019


and growth rates, Vietnam, 2013–2019

Figure 81: Connections by type, and growth rates, Vietnam, 2013–2019

Figure 82: Summary of key drivers and assumptions, Vietnam

Figure 83: Mobile, smartphone and 4G penetration rates, Vietnam, 2009–

2019

Figure 84: ARPU rates by type, Vietnam, 2009–2019

Figure 85: Fixed penetration rates by service type, Vietnam, 2009–2019

Figure 86: Fixed ASPU rates by service type, Vietnam, 2009–2019



Geographical coverage: Our forecasts include a detailed breakdown of

Vietnam for the first time

Figure 8: Mobile connections by technology generation and fixed broadband household penetration, by country, 2019 [Source: Analysys Mason, 2014]1

1 For a full list of countries modelled as part of the emerging Asia–Pacific region, please see the accompanying data annex. Mobile connections exclude M2M connections. Fixed broadband household

penetration is calculated as total fixed broadband connections (residential and business) divided by the number of households.

18

Pakistan

Thailand

China

Mobile connections by

technology generation

Fixed broadband

household penetration

2011

2G

3G

4G

Year of

LTE launch

74%

Key

Countries modelled individually

Countries modelled as part of the region

Vietnam

Bangladesh

India

Indonesia

60%

2012 10%

2015 10%

2016 37%

2014 8% 2014 25%

2014 36%

Malaysia

2013 64%

2014



Mobile penetration: Penetration is at only 76.4% despite significant

multiple-SIM ownership and it will continue to increase

EMAP will have just over 4 billion mobile connections in

2019. Mobile SIM penetration is expected to increase from

76.4% in 2013 to 101.4% in 2019. Unlike the telecoms

markets in developed Asia–Pacific (DVAP), EMAP is

dominated by prepaid subscriptions. Contract SIMs

accounted for only 16.5% of handset connections in 2013,

and this will remain relatively constant till 2019 (16.7%).

Consumers in EMAP countries are extremely price-sensitive,

and competition among operators often leads to price wars

and frequent promotions. This has led to a high degree of

multiple-SIM ownership and churn in the region.

Mobile take-up increased dramatically in Thailand in 2013

thanks to the National Broadcasting and Telecommunications

Commission’s (NBTC’s) new regulation to extend prepaid

validity. Mobile penetration is already high in Thailand, and

we expect the growth in 2013 to be an anomaly, so have

forecast slower growth in the coming years. The expiry of

licences and changing market structure should encourage

operators to switch off a significant number of dormant SIMs.

Vietnam has a high rate of multiple-SIM ownership. The

sharp decline in the number of SIMs in 2013 is because the

Ministry of Information and Communications (MIC)

introduced several measures to limit the number of SIMs per

owner, including a VND25 000 (USD1.25) SIM registration

fee in January 2013.

Figure 12: Active mobile SIM penetration by country (excluding M2M),

emerging Asia–Pacific, 2009–2019 [Source: Analysys Mason, 2014]

21

0%

20%

40%

60%

80%

100%

120%

140%

160%

180%

200

9

201

0

201

1

201

2

201

3

201

4

2015

2016

201

7

201

8

201

9

Pe

rce

nta

ge

of

the

po

pu

latio

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Bangladesh China

India Indonesia

Malaysia Pakistan

Thailand Vietnam

Emerging Asia–Pacific


Emerging Asia–Pacific telecoms market: trends and forecasts 2014–2019 63

Executive summary

Regional forecasts and cross-country comparison

Individual country forecasts

About the authors and Analysys Mason



About the authors

Satvik Singhania (Research Analyst) joined Analysys Mason in 2012 as a Research Analyst in the Singapore office

and works on our Asia–Pacific research programme. He has taken part in and led a number of key research

projects as well as been involved in examining and forecasting the overall size of the telecoms market in developed

and developing Asia–Pacific and producing market reports for various Asian countries. Before joining Analysys

Mason, Satvik was a strategy and risk management consultant at Dragonfly, where he oversaw a number of

projects in alternative energy investments for an oil major. Satvik has a degree in Economics and Finance from the

Singapore Management University.

Nipun Jaiswal (Analyst) is an analyst in Analysys Mason’s Singapore office. He specialises in the Asia–Pacific

telecoms, media and related technologies markets. He is an expert in tracking, analysing and forecasting telecoms

market data, and in providing corporate strategy, competitive analysis, market insights and market intelligence. Prior

to joining Analysys Mason, Nipun was an industry analyst in Frost & Sullivan's ICT research and growth consulting

team for Asia–Pacific, based in Kuala Lumpur, Malaysia. Nipun has a strong technical background, having worked

extensively on mobile network management solutions in the OSS domain for a Tier 1 telecoms equipment vendor

based in Europe and India. Nipun holds an MBA in global business from the S P Jain School of Global Management

(Singapore and Dubai) and a degree in Computer Engineering from Bharati Vidyapeeth University (India).

Tom Mowat (Principal Analyst) is the lead analyst for Analysys Mason’s Asia–Pacific research programme and is

based in our Singapore office. His research covers the entire Asia–Pacific region, and includes market data and

forecasts for 14 key markets as well as thematic reports covering key issues in the region in detail. Tom has

extensive expertise in fixed and mobile broadband services, strategy and forecasting, regulatory issues, cost

modelling and the particular issues affecting telecoms markets in developing regions. His experience includes

working as a researcher and consultant in multiple countries across four continents for clients throughout the value

chain. Tom has degrees in mathematical and particle physics from the University of Nottingham and the University

of Durham.

64



About Analysys Mason

Knowing what’s going on is one thing. Understanding how to take advantage of events is quite another. Our ability to understand the

complex workings of telecoms, media and technology (TMT) industries and draw practical conclusions, based on the specialist

knowledge of our people, is what sets Analysys Mason apart. We deliver our key services via two channels: consulting and research.

Consulting

Our focus is exclusively on TMT.

We support multi-billion dollar investments, advise clients on

regulatory matters, provide spectrum valuation and auction support,

and advise on operational performance, business planning and strategy.

We have developed rigorous methodologies that deliver tangible

results for clients around the world.

For more information, please visit www.analysysmason.com/consulting.

Research

We analyse, track and forecast the different services accessed by

consumers and enterprises, as well as the software, infrastructure

and technology delivering those services.

Research clients benefit from regular and timely intelligence in

addition to direct access to our team of expert analysts.

Our dedicated Custom Research team undertakes specialised and

bespoke projects for clients.

For more information, please visit www.analysysmason.com/research.

65



Research from Analysys Mason

We provide dedicated coverage of developments in the telecoms, media and technology (TMT) sectors,

through a range of research programmes that focus on different services and regions of the world.

66

Alongside our standardised suite of research programmes, our Custom Research team undertakes specialised, bespoke research

projects for clients. The dedicated team offers tailored investigations and answers complex questions on markets, competitors and

services with customised industry intelligence and insights.

To find out more, please visit www.analysysmason.com/research.



Consulting from Analysys Mason

For more than 25 years, our consultants have

been bringing the benefits of applied intelligence

to enable clients around the world to make

the most of their opportunities.

67

Our clients in the telecoms, media and technology (TMT)

sectors operate in dynamic markets where change is

constant. We help shape their understanding of the future

so they can thrive in these demanding conditions. To do

that, we have developed rigorous methodologies that

deliver real results for clients around the world.

Our focus is exclusively on TMT. We advise clients on

regulatory matters, help shape spectrum policy and

develop spectrum strategy, support multi-billion dollar

investments, advise on operational performance and

develop new business strategies. Such projects result in a

depth of knowledge and a range of expertise that sets us

apart.

We help clients solve their most pressing problems,

enabling them to go farther, faster and achieve their

commercial objectives.

To find out more, please visit

www.analysysmason.com/consulting.



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Emerging Asia Pacific telecoms market: trends and …Emerging Asia–Pacific telecoms market: trends...

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