Asia Set To Lead Mobile Phone Boom

Market Penetration hinges on common standards

Asia will see the largest rise in wireless telecommunications over the next few years, but individual companies will have to work hard to take advantage of the growth, industry leaders said yesterday.

Penetration of Asian markets depends on integration of disparate operating systems and national differences, they said.

The industry officials were speaking at a forum during the Asia Telecom 97 trade fair.

We believe wireless growth in Asia is only beginning, that the boom is still to come, said Mark Schultz, senior vice-president for international development with AT&T.

Wireless telecommunications now consisted of about 140 million customers, of which 46 million were from Asia, he said.

 

Worldwide revenues were currently running at US$80 billion.

By 2002, subscriber growth worldwide would have risen to some 520 million, and 200 million users would be from Asia.

Schultz, drawing from AT&Ts experience in emerging Asian markets, said it was imperative to build strong partnerships with local vendors to get more capacity out of networks.

He said it was necessary to be involved and yet flexible within each countrys state and local regulatory process.

Politics is an important consideration as well, said Achmad Chadran, director of client strategies for Pyramid Research.

He told Reuters after the talk that operators may have to tie up with politically strong local partners who are equity shareholders or have entrenched interests in government-linked telecommunications systems.

Jung Uck Seo, president and chief operating officer of SK Telecom, said global networks were converging with wider use of such systems as global systems mobile (GSM) and code division multiple access (CDMA). But, only 15 per cent of the world had access to these current technologies as there was too much divergence in economic and political systems, which hurts market development, he said.

He suggested a step-by-step approach in standardisation efforts to help less developed countries. Jung said that like other industries, the telecommunications sector can harm the environment, and this could become a barrier for growth and entry into some markets.

Communication industries also release hazardous waste into the world. They should not make wasteful new models, Jung said. One way to minimise that was to integrate new technologies with existing ones, he said.

Speakers said the boom in wireless telecommunications was already raising living standards and business activity in Asia.

Alan Ma, managing director of Hongkong Telecom, said business was being enhanced in Hong Kong, where market penetration rates were the highest in Asia. About 1.4 million people, or 20 per cent of a population of more than six million use mobile phones in Hong Kong, he said.

Time and information is very critical, it makes sure we can all make money, Ma said.

According to industry statistics, by the year 2000 Hong Kong will have a penetration rate of more than 50 per cent, Australia nearly 50 per cent, South Korea 40 per cent and Taiwan 35 per cent.