Asian telcos heighten focus on broadband

Pressure to bring prices down and the threat from IP telephony are among the reasons for the shift to broadband and mobile services, says analyst.

Faced with declining revenues from fixed voice services, telecommunications service providers in the Asia Pacific region have shifted their focus to broadband and mobile services, says Frost & Sullivan.

According to the research company, revenues in the Asia-Pacific broadband and mobile market totaled US$246.20 billion in 2004 and will reach US$320.80 billion by the end of 2008.

"Although service providers are providing faster network speed, the pressure to bring down prices persists," Janice Chong, program leader at Frost & Sullivan, said in a statement. "In time, service providers are likely to migrate to flat-rate or capped plans as the cellular market matures and the rate of broadband adoption improves."

Flat-rate subscription plans will be common among 3G (Third-Generation) service providers that offer bundled packages comprising voice and data services. Unlimited data download packages currently offered by broadband service providers are also becoming increasingly popular in the Asia-Pacific region, Chong noted.

To take advantage of these developments, she said operators need to overcome the increasing threat of mobile technologies, pricing concerns and competition from alternative voice services that are threatening the fixed-voice business, by offering innovative packages.

Although some countries witnessed a rise in the number of fixed lines, Chong noted that the impact of mobile and voice-enabled options is forcing a decline in traffic minutes, and subsequently, the revenues in fixed voice solutions.

"While the growth of broadband solutions aids in stabilizing the decline in fixed-line sales, it also drives VoIP (voice over Internet Protocol) services," she said. "This would lead to a greater number of fixed-line connections but a slump in the revenue traditional fixed voice [services]."

Apart from implementing fixed-mobile convergence, broadband is perceived as the most promising means for service providers to regain the share of lost fixed-lines and sustain core revenues, Chong added.

She noted that countries such as South Korea are already introducing policies aimed at the rapid development of broadband infrastructure, such as to ensure the affordability of access fees and progress of next-generation technologies including WiBro wireless broadband.