IDC: Asia's sluggish deregulation stumps telecoms growth

While revenues reached US$7.6 billion in 2004, the wholesale telecom market's growth could have been higher if deregulation efforts were more swift, says IDC.

Although wholesale telecom revenues in the Asia-Pacific region reached US$7.6 billion in 2004, the figure could have been much higher had it not been for the slow progress in deregulation efforts seen in a number of countries around the region, according to IDC.

The research firm also expects the market to rise to US$10.2 billion in 2009, growing at a compound annual growth rate (CAGR) of 6 percent.

However, Claus Mortensen, IDC's senior analyst for telecommunications research, noted that 2004 had been a year of "status quo" despite earlier talk of liberalization in some of highly-regulated Asia-Pacific markets.

"Thailand has still to establish its independent regulatory body, Taiwan has yet to effectively implement LLU (Local Loop Unbundling), and China remains out of reach for direct service provisioning from foreign operators," Mortensen said. "Despite the slow progress in deregulation, wholesale markets continue to grow throughout the region--but less rapidly than previously thought."

The wholesale market, according to IDC, has given many carriers the opportunity to tap new revenue streams and gain back some of the revenues they had lost due to price erosion and market competition in the retail market. The research firm believes the healthy forecast is good news for both domestic and international carriers throughout the region.

India is the main growth driver in the region, with a CAGR of 10.8 percent from 2004 to 2009, according to IDC. Trailing behind in second place is Korea, with a growth of 11.4 percent over the same period.

Most of India's growth in this market will come from wholesale voice, the research firm predicts. But on a regional scale, wholesale IP services including broadband remains the main growth driver with a CAGR of 20 percent, IDC said.