Asian fixed telecom market to hit US$208b

The fixed telecommunications services market in Asia Pacific will continue to see healthy growth--from US$134 billion in 2000 to US$208 billion in 2005--despite the current economic malaise, according to Gartner Dataquest.

SINGAPORE--The fixed telecommunications services market in Asia Pacific will continue to see healthy growth despite the current economic malaise, according to Gartner Dataquest.

The fixed telecom services market comprises all public network services--such as telephony and fixed data services--but excludes mobile services.

In a statement today, Dataquest--a unit of research firm Gartner Inc--said the regional fixed telecom services market is expected to grow from US$134 billion in 2000 to US$208 billion in 2005. This is despite the dwindling foreign investment and a general disenchantment with investing in basic telecom services in the region.

"The introduction of competition, pent-up demand and a more level playing field will provide continued growth," industry analyst for Gartner Dataquest's Asia Pacific Telecommunications and Networking group Alayne Wong said in the statement. "In the long term, the region will regain its attraction as a major telecom services market when the regional economies gain sufficient depth for sustainable growth."

Although revenue from the Asia Pacific region is still small relative to its large population, the region is projected to overtake Western Europe in the forecast period. However, Asia Pacific sales will still be less than two-thirds of the well-developed US market in 2005.

The telephony services market is expected to grow from US$108 billion in 2000 to US$149 billion in 2005. Much of this will be driven by VoIP (voice over IP) services, which will reach US$27 billion by 2005. China is expected to be the largest VoIP market in the region.

However, circuit switched telephony revenue will be flat because of price erosion in international and long-distance calls. "The drop in IDD revenues will be made up by an increase in local call usage and line rentals, mirroring the trend in the United States and Europe," said Wong.

Total fixed data services will more than double, from US$26 billion in 2000 to US$59 billion in 2005. "Even in less developed markets, demand for data services will be robust, driven by soaring growth in ISP services, followed by leased lines riding on the back of Internet growth," Wong explained.

"Regional business hubbing centers such as Singapore and Hong Kong will see data service revenue overtaking telephony service revenue within the forecast period, underscoring the importance of the Internet as a key carrier service."

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