ITU asks: broadband connectivity for Asia-Pacific. Too much or too little?

Details: Category: Trends & Forecasts; 22 September 2008; 11428 views

ITU launched its key Telecommunication/ICT Indicators Report for the Asia-Pacific region at ITU Telecom Asia 2008, held in Bangkok, Thailand. The report focuses on broadband connectivity as a vehicle for content to drive development and build a knowledge-based information society...

The Digital Divide looms large in the report. While some Asia-Pacific economies are world leaders in Information and Communication Technologies (ICT) where broadband access is ultra-high speed, affordable and close to ubiquitous, in most of the region's poorer countries Internet access remains limited and predominantly low-speed. The report also finds evidence that ICT and broadband uptake foster growth and development but the question remains as to the optimal speed that should be targeted in view of limited resources.

Asia-Pacific: a region of superlatives

Figure 1: Distribution of ICTs by world regions, 2007

Asia-Pacific is a region of superlatives when it comes to ICTs. By early 2008, the total number of telephone subscribers had passed the two billion mark. The region is home to almost half the world's fixed telephone subscribers. It has 42% of the world's Internet users and with 1.4 billion mobile cellular subscribers it also has the largest mobile phone market share (figure 1).

By mid-2008, China and India alone had over 600 and 280 million mobile cellular subscribers respectively, representing close to a quarter of the world's total. Average annual mobile growth over the last five years is close to 30% and with mobile penetration approaching 40% almost two out of five inhabitants in the region enjoy the benefits of mobile telephony today.

Non-voice applications via mobile phones are increasing rapidly and now account for more than one quarter of the region's main operators' mobile revenues. Text messaging - or SMS - is the predominant non-voice, mobile application. Filipinos send a staggering 650 text messages per subscriber per month, the highest in the world. SMS has emerged as a significant alternative to computer-based e-mail in the region's low and lower-middle income economies.

The report finds that other mobile data applications, eg, cash transfers and online purchases, are creating new business opportunities in poor countries.

Asia-Pacific is a global broadband leader

Figure 2: Percentage of households with fixed broadband access

The area in which the region really stands out is the uptake of advanced Internet technologies, especially broadband Internet access. The Asia-Pacific region is the world's largest broadband market with a 39% share of the world's total at the end of 2007. In terms of broadband access, Asia-Pacific has made remarkable progress in the past few years, with subscriber numbers growing almost five-fold in five years: from 27 million at the beginning of 2003 to 133 million at the start of 2008.

In the region's high-income economies, ubiquitous access is progressing through a competitive race to provide ever faster fixed broadband access. Operators in Hong Kong (China) and Japan have launched 1Gb/s broadband and triple-play services aimed at the residential market, featuring applications such as Internet telephony and television. The Republic of Korea leads the world in terms of the percentage of households with fixed broadband access, and no less than five economies in the top ten are from Asia-Pacific (figure 2). The Republic of Korea, Hong Kong (China) and Japan also lead the world in terms of the proportion of households with fibre-optic connections, essential for supporting the next generation of ultra-high speed Internet applications.

These high-income economies are also leaders in terms of 3G mobile cellular deployment. Fixed and mobile broadband technologies complement each other and users enjoy continuous high-speed Internet access. In Singapore, a ubiquitous Internet access plan combining unlimited 8Mb/s fixed broadband, 2Mb/s mobile broadband and access at some 800 Wi-Fi hotspots is available for just US$35 per month.

Not everyone lives the ultimate high-speed Internet access experience

Figure 3: Fixed broadband Internet subscribers per 100 inhabitants, 2007

At the other extreme, in most of the region's low and lower-middle income economies, high-speed Internet access is limited to urban areas at best, is typically expensive, and is often not available at all. The regional broadband divide is striking, with poor economies having a close-to-zero broadband penetration, compared to that of rich economies where one in four persons is a broadband subscriber (figure 3).

The gap in available broadband speeds between rich and poor countries is as wide as broadband penetration. In Japan, the Republic of Korea and Hong Kong (China), the minimum advertised broadband speed is faster than the maximum broadband speed in Cambodia, Tonga, Laos and Bangladesh.

While in low and lower-middle income economies mobile phones have become a substitute for the shortage of fixed lines, they are not yet fulfilling the potential of broadband access. By the end of 2007, only Indonesia, the Maldives, the Philippines and Sri Lanka had commercially deployed WCDMA networks. The region's two largest mobile markets, China and India, have yet to launch mobile broadband. By the end of 2007, there were over 120 million mobile broadband subscribers in the region (Figure 4), but almost all (97%) were in high-income economies.

While the region's high-income economies are pushing the frontier of broadband bandwidth to a point where applications have yet to catch up, many Asia-Pacific developing economies are bandwidth starved, inhibiting the development of their information societies.

Figure 4: Mobile cellular broadband subscribers in Asia-Pacific

The ITU Report argues that broadband uptake enables a range of socially desirable and valuable online services in areas such as government, education and health. The use of broadband technologies can help overcome many of the basic development challenges faced by poor countries. The Report provides a number of examples where broadband connectivity has acted as a catalyst for development. These include the provision of education through distance learning in the Solomon Islands, the creation of jobs through business incubators for women in China, and the supply of communication services for disaster management in Myanmar.

The level of economic development plays a key role in broadband uptake since substantive investments are necessary to deploy high-speed infrastructure. However, the report identifies a number of obstacles that policy-makers must address to overcome the broadband gap. Governments must recognise its importance and formulate concrete broadband policies and targets, while providing incentives for achieving them. Broadband prices could be reduced by encouraging new operators to enter the markets. Stimulating competition, liberalising the building blocks necessary to develop a broadband business, and opening up the way for new technologies - including 3G and WiMAX - are important success factors to ensure higher broadband penetration. Besides the analytical section, the report includes 20 regional tables covering key telecommunication/ICT indicators (2006/2007 data), 43 individual country pages with a five year profile from 2003-2007, and a directory of telecommunication ministries, regulators and operators in the region. The ITU Asia-Pacific Telecommunication/ICT Indicators Report - Broadband in Asia-Pacific: Too much, too little? is now available.