Dataquest: 52% cellular growth in Asia Pacific

Mobile phone subscribers in Asia Pacific (including) hit 230 million in 2000, representing a 52 percent increase over the previous year, according to Dataquest Inc.

SINGAPORE--Mobile phone subscribers in Asia Pacific (including Japan) hit 230 million in 2000, representing a 52 percent increase over the previous year, according to Dataquest Inc.

The region was led by China, which had 85.3 million subscribers last year as compared with 43.3 million in 1999.

"Against the backdrop of improved prosperity and favorable government policies, the cellular industry in China is expanding as a result of increased competition, lower terminal prices and service packages, as well as the rapid adoption of pre-paid services," said Gartner Dataquest Asia Pacific (Mobile Research Group) industry analyst Ann Liang.

"Even without further acceleration in subscriber numbers, there is clearly room for strong, sustained growth, especially with the introduction of new networks and mobile players in China and the impact of accession to the World Trade Organization (WTO)," Liang said in a statement.

However, experts have warned that China's scheduled entry into the WTO might be affected if it prolongs a dispute with the US. On April 2, a US plane and a Chinese fighter jet collided near Hainan Island. China has since held the 24 crew members of the EP-3 Aries II electronic surveillance plane, blaming the US plane for the collision, according to a CNN report.

Apart from China, the Gartner Inc unit said that the Philippines and India also registered strong growth year-on-year. The former had 6.3 million mobile subscribers in 2000, up 132 percent increase from 1999, while the latter surpassed 3.1 million subscribers to register a 97 percent increase.

Gartner Dataquest industry analyst for mobile research Kobita Desai attributed much of the uptrend in India to the change in license fees several months back.

"A year ago, the license fee was so high that telcos were losing money on any new customer. Obviously, that did not represent a good business proposition and they did not want to invest in areas such as marketing.

"But now, the new licensing scheme--although still high by international standards--makes it possible to grow the business. This is a big step in the right direction and consequently, the telcos have been more aggressive," Desai said. "After several years in the doldrums, the Indian cellular market has at last begun to rack up significant subscribers, which in future could replicate the type of growth patterns that China has enjoyed."

With the introduction of further competition, Desai anticipates an acceleration in mergers, acquisitions and alliances among Indian cellular players, resulting in a handful of financially sound operators.

In Singapore, the research firm noted that the entry of StarHub Pte Ltd has accelerated the island's mobile phone usage. Singapore and Hong Kong now each have a 74 percent mobile penetration rate. "This is the highest (penetration) rate in Asia Pacific," said Gartner Dataquest Asia Pacific Telecommunications director Bertrand Bidaud. He could not provide actual figures. Gartner Dataquest also observed that there was encouraging demand for "mobile Internet" services across the region. It defines mobile Internet as WAP in GSM terms; CDMA IS95B or higher in Korea; iMode or equivalent in Japan.

The market research firm estimates that there were 34.4 million regular mobile Internet users in the region at the end of 2000.

In the statement, Gartner Dataquest said that Japan and South Korea dominated Asia Pacific's mobile data market last year, accounting for 26.8 million users and 7 million users respectively.

"The steady growth of mobile Internet usage in the region is laying a solid foundation for much faster adoption...once subscribers start to realize the benefits of packet data services towards year end," Gartner Dataquest Mobile Research Group principal analyst Nick Ingelbrecht said.