KUALA LUMPUR--Data services will be the fastest-growing market for regional telecommunication operators in the next two years, according to Frost & Sullivan.
The research company's Asia Pacific director for technology practice, Manoj Menon, said the data market is fast replacing long distance call revenue in the more developed markets in the region.
He told reporters at Frost & Sullivan's Telecom Outlook 2002 summit here that long distance call revenue, which used to contribute 30 percent to the coffers of telcos, has now declined due to deregulation and intense competition in the Voice over Internet Protocol (VoIP) market.
For instance, Malaysia's largest operator, Telekom Malaysia, experienced a decline in long distance revenue from US$1.02 billion in 1999 to US$955 million in 2000.
Meanwhile, Singapore's largest telco, Singapore Telecoms Ltd, experienced a negative growth in the IDD segment when it managed just US$720 million in revenue last year, compared to US$927 million in 1999.
Frost & Sullivan's study of 15 major fixed-line carriers in the region showed that eight carriers experienced negative growth in the long distance market, said Menon.
"In order to offset the decline in the long distance arena, telcos need to increase revenue from other areas, namely data market or Internet services," he said.
In fact, telcos in deregulated markets are turning to data services to earn revenue.
SingTel's data segment contributed to 14.9 percent of the company's revenue in 1999 but increased to 20.2 percent a year later. Telekom Malaysia also experienced a similar increase, although to a lesser extent, Menon said.
For Telekom Malaysia, data services accounted for only 7.7 per cent of its revenue in 1999, but increased to 9.3 per cent of total revenue in 2000.
Across the causeway, IDD contributed 23 percent to SingTel's total revenue for the half year ended 30 September 2001, down 6.8 percent from the same period last year.
Freelancer N Ismail reported from Kuala Lumpur.