Broadband users in Asia Pacific to reach 35 million in 2004

Asia Pacific is emerging as one of theworld's largest broadband Internet markets, with a predicted 35 million high-speed subscribers by 2004, according to Dataquest Inc.

Asia Pacific is emerging as one of the world's largest broadband Internet markets, with a predicted 35 million high-speed subscribers by 2004, according to Dataquest Inc., a unit of Gartner Group, Inc.

Broadband users in the region, including Japan, are predicted to have increased ten-fold to 7.6 million in the year 2000.

The growth in the region was largely due to the surge in demand in Korea, where more than 3 million users signed up for broadband services, according to Andrew Chetham, regional ISP analyst for Gartner Dataquest.

"The lesson from Korea is that once the basic infrastructure is in place and competition drives down prices, dial-up users switch to broadband in droves," he said.

Outside Korea, broadband services are still in their infancy with most services only launched in the past year. Despite the initial enthusiasm among early adopters, there remains the problem that no killer application has emerged that will encourage users to switch to broadband apart from high speed access. The majority of broadband services to the home, and increasingly to the office, are delivered using digital subscriber line (DSL) technologies over the existing telephone infrastructure.

Broadband access in the near future will be the monopoly of telephone carriers. By 2004 Dataquest predicts there will be 20 million DSL subscribers across the Asia Pacific region, with Korea by far the biggest market with 14 million.

In Singapore, although it was the first country in the world to launch DSL services, take up has been slow. With the introduction of new players in the next 12-18 months, broadband subscriber growth looks set to pick up.

Dataquest predicts that by the end of 2004 Singapore will have 421,000 DSL subscribers and 186,000 using cable modem services. Cable modem services, the main alternative to DSL, will also grow strongly.

However, as compared to DSL, the structure of the cable television industry in the Asia Pacific is less well suited to rapid rollout of services.

"Across the region cable television operators are often cash strapped, meaning they find it difficult to raise the funds to undertake the necessary upgrades to their systems to offer broadband services. At the same time, they generally serve small localized markets and as a result it is not easy to build a critical mass of broadband subscribers to gain economies of scale," said Chetham.

By 2004, it is predicted that there will be around 14 million broadband subscribers using cable modems in the Asia Pacific. However, bucking the regional trend, Japan is the one country where cable modem services will dominate in the near future.

"For technical and business reasons, DSL has not been promoted in Japan, as result cable modem services have quickly emerged as the preferred way to access high-speed services, especially to the home user," said Yuko Adachi, Gartner Dataquest telecommunications analyst.