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Benchmarking the Asia-Pacific Broadband Divide Michael Minges Senior Market Analyst


References Designed Digital Access Index Worked on Digital Opportunity Index Evaluation of ICT indexes for UN ITU Asia-Pacific report on broadband

2


Contents • Update on the ITU Digital Opportunity Index (DOI) • Benchmarking broadband • The Asian broadband divide

3


ITU Digital Opportunity Index (DOI) • What is Digital Opportunity? – The whole population having easy access to Information and Communication Technologies (ICTs) at affordable prices; – All homes equipped with ICT devices; – All citizens having mobile ICT devices; and – Everyone using broadband.

4


DOI trends 2000-2007 1.0

12

8

5

+3

+5

7

10

7

8

9

10

11 12

+14 -3

-5

-4

-9

3

5

+6

6 20

4

2

16

14 15 -8

+6

6

18

19 21 -12

+6

0

21

19

9

Canada

0.5 0.4

+10 +5

4

N. Zealand

1

3

Macao

0

2

Hong Kong

Australia

Iceland

Norway

Luxembourg

Taiwan

Singapore

Denmark

Japan

Korea

0.1 0.0

UK

2000 2007

0.3 0.2

Netherlands

0.7 0.6

1

Sweden

0.9 0.8

5


DOI in detail Taiwan Mobile pop coverage

100

Mobile broadband ratio

Fixed broadband ratio

75 50

Internet$ % of GDP

Mobile$ % of GDP

25 0 Internet per 100

Mobile internet per 100 Mobile per 100

% HH with fixed

% PC HH % of HH with Internet

6 Source: Adapted from FIND, NCC, DGBAS.


1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0 Myanmar Solomon Laos Cambodia P.N, Guinea Nepal Vanuatu Bhutan Bangladesh Pakistan Vietnam Samoa India Mongolia Indonesia Sri Lanka Iran Philippines Fiji Tonga Thailand China Maldives Malaysia Brunei N. Zealand Australia Macao Hong Kong Singapore Taiwan Japan Korea

DOI Asia-Pacific

Usage

Infrastructure

Opportunity

High

Medium

Low

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Benchmarking broadband


Importance of broadband •

“Highspeed broadband, which a few years ago was considered a luxury is today a necessary part of the industrial, commercial and lifestyle landscapes.” –Government of Malaysia • “Recognising the potential of ubiquitous Broadband service in growth of GDP and enhancement in quality of life through societal applications including tele-education, tele-medicine, e-governance, entertainment as well as employment generation...” —Government of India • “Broadband not only plays a critical role in the workings of the economy, it connects consumers, businesses, governments and facilitates social interaction.”—OECD

9


0 Denmark Netherlands Iceland Norway Switzerland Finland Korea Sweden Luxembourg Canada UK Belgium France Germany USA Australia Japan Taiwan Austria N. Zealand Ireland Spain Italy Czech Rep. Portugal Hungary Greece Poland Slovak Rep. Turkey Mexico

Broadband penetration OECD December 2007, per 100 people

40

35

30

25

20

15

10

5

Source: OECD, NCC. 10


Aspects of broadband • Different aspects of broadband beyond just penetration • OECD has identified some but not all • Fixed versus wireless / mobile broadband Source: OECD. 11


Broadband penetration Broadband subscribers per 100

12

32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 Korea

Hong Kong

Australia

Japan

Singapore

Taiwan

32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 N. Zealand

• Even among high income economies, significant difference in basic broadband penetration statistic • Closer inspection reveals some surprises

people, 2007


Penetration by sector

45

45

40

40

13

Korea

50

Taiwan

50

100 90 80 70 60 50 40 30 20 10 0 Japan

55

Korea

55

Singapore

60

Hong Kong

60

Taiwan

65

Japan

65

Australia

70

New Zealand

70

New Zealand

75

100 Businesses 90 with Internet 80 70 60 50 40 30 20 10 0 Australia

75

80

Households with Internet

Hong Kong

80

% businesses with broadband, 2007

Singapore

% households with broadband, 2007


Competition Technological HHI, 2007

6000

6000

5000

5000

4000

4000

3000

3000

2000

2000

1000

1000

14

Korea

Japan

0 Singapore

Australia

0

Hong Kong

7000

New Zealand

7000

Taiwan

• A more competitive broadband market, including a variety of technologies, tends to result in higher broadband penetration • Competition can be measured by both technology and operators


Pricing One month ADSL, 8 Mbps, 10 GB, 2008

$60

$50

$50

$40

$40

$30

$30

$20

$20

$10

$10

$0

$0

15

Australia

$60

Hong Kong

$70

New Zealand

8 Mbps download is only comparable plan (with 10 GB download) • Ongoing promotions, bundled offers, etc. make comparisons difficult

$70

Singapore

$80

Korea

– Highest speeds not always universally available – Data or time volume caps in Australia, Hong Kong (some plans) and New Zealand

$80

Taiwan

Wide variety of plans, coverage & exceptions / restrictions inhibit ability to compare broadband pricing:

Japan


Speed • Composite measure of speed in use desirable but comparable data not available: – Australia: 30% < 512 kbps; 3%> 24 Mbps – Hong Kong: Over 60% of customers using > 25 Mbps (HKBN) – Japan: 40% fiber optic – Taiwan: Average download speed 3.56 Mbps (CHT)

• Fall back on broadband as % of Internet in homes

Range of mass market broadband plans, Mbps, incumbent operator, 2008 Korea Japan Hong Kong Singapore Australia Taiwan New Zealand 0.1

1

16

10

100


3G Mobile

17

Japan

Korea

Australia

Singapore

• 3G data cards

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Taiwan

– 3G subscribers as % of total mobile subscribers – 3G subscribers per 100 people

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

New Zealand

• 3G mobile technology supports broadband speeds • Indicators:

Hong Kong

3G mobile as % of total, 2007


Coverage • Definitions vary: number of lines upgraded, population covered or households which could subscribe: – Australia: 81% DSL coverage – Korea: 100% DSL coverage – Japan: 95% households have one or more broadband service; 84% have “ultra-high speed” broadband coverage – Hong Kong: Fiber available to 2/3 of households – New Zealand: 93% DSL coverage – Singapore: Singtel has island wide DSL coverage – Taiwan: “Substantially all installed telephone lines capable of delivering ADSL services”

18


Usage example: IPTV 2007 Subscribe rs 000s

Chang e 06/07

3 Hanaro

810

305%

22%

5 PCCW

628

25%

51% .

8 CHT

394

58%

11%

325

Launch 2007

World rank

Operator

Korea 9 Telecom

% broadband subscribe rs

IPTV service

5% 52%

15 HKBN 26 SingTel

128

10%

27

Launch 2007

6%

Note: excluding Japan.

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Broadband index results Australia Score

0.40

Hong Kong 0.52

Japan 0.71

Korea 0.79

New Zealand

Singapore

0.45

0.67

Taiwan 0.63

Overall rank

7

5

2

1

6

3

4

Sector use

7

4

5

1

6

3

2

Competition

6

4

2

1

5

3

7

Price

7

6

1

3

5

4

2

Home speed

5

1

6

1

7

4

3

Mobile

4

7

1

2

6

3

5

Penetration rank

3

2

4

1

7

5

6

20


The Asia-Pacific broadband digital divide


Broadband divide in Asia-Pacific Broadband subscribers per 100 people, 2007

35

China 51%

30 25

High income 43%

20 15

Low income 6%

10

0 $100

Distribution of fixed telephone lines, 2007

China 61%

5

$1,000

$10,000 $100,00 0

GDP per capita, US$, 2006

Distribution of broadband subscribers, 2007

Low High income income 20% 19%

22


Top broadband providers versus top mobile providers in Asia Top 10 broadband operators, 2007

Top 10 mobile operators, 2007

Operator

000s

Operator

000sÂ

%BBÂ

China Telecom

35,650

China Mobile

369,339

0%

China Netcom

19,768

China Unicom

162,491

0%

NTT (Japan)

12,960

Bharti (India)

55,163

0%

Korea Telecom

6,516

DoCoMo (Japan)

53,150

79%

Softbank (Japan)

5,164

Telkomsel (Indonesia)

47,890

7%

Telstra (Australia)

4,598

Reliance (India)

40,960

0%

CHT (Taiwan)

4,243

Vodafone (India)

39,865

0%

Hanaro (Korea)

3,658

BSNL (India)

36,810

0%

KDDI (Japan)

2,135

Mobilink (Pakistan)

30,613

0%

LG Powercom (Korea)

1,721

PLDT (Philippines)

30,041

4%

Developing countries

Source: Adapted from company reports. 23


Internet in Asia developing economies: Primarily wireless-Philippines example Philippines China Indonesia

PLDT 2007 Mobile revenue

SMS per subscriber per month 2007

HKG India

0

Wireless 38%

200

400

Dial-up 29% DSL 33%

600

Voice Data 45% 55% 800

PLDT 2007 Internet subscribers

• domestic and international remittances • utility bills • insurance premiums • school tuition fees • micro tax payments • electronic loads and pins • online purchases • ferry, airline & train tickets

Source: Adapted from PLDT, Globe.

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Broadband targets Broadband Zero in Japan: % HH

100 98 96 94 92 90

Malaysia ICMS Goals: % BB HH Actual

94

75

Plan

50

95 15.5

FY05

FY06

FY10

India BB Policy: BB subscribers (m) 25 20 Plan 15 Actual 10 5 0 2005 2007 2010

2007

2008

2010

Singapore iN2015: % BB HH

90 77.1

1997

2015 25


Broadband recommendations • Encourage franchising • Certify Customer Premises Equipment & announce broadband plans to encourage manufacturing of CPEs • Expedite mechanism for spectrum • Streamlining and sharing Rights of Way • Encourage broadband via broadcast technology • Universal Service fund for providing broadband in underserved areas and to subsidize backhaul charges • Make Multiple Dwelling Unit buildings broadband ready

Adapted from Telecom Regulatory Authority26of India


Conclusions • Big broadband divide in Asia region • Numerous barriers including income, geography, literacy, policy and competition • Competition: intra- and inter-modal and fixed broadband versus mobile broadband • Mobile and “Internet-like” use in developing countries • How much broadband is enough? 27


The End minges@tmgtelecom.com

Benchmarking the Asia-Pacific Broadband Divide  

Benchmarking the Asia-Pacific Broadband Divide

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