Study: China, India to fuel 3G growth in AP

Asia's two largest economies will spur third-generation growth as market expands exponentially over the next five years, predicts analyst.

The Asia-Pacific third-generation (3G) market is poised for a growth boom, once the region's two largest economies get their 3G networks up and running.

A recent study by analyst Frost and Sullivan revealed that both China and India are expected to contribute significantly to the robust growth of the region's 3G subscriber base after 2008.

According to the study, the Asia-Pacific 3G market, excluding Japan, will expand at a compound annual growth rate (CAGR) of 50.1 percent over the next five years, where the number of subscribers will spike to 178 million by end-2011, from its current 15.6 million.

Lenny Koay, research analyst at Frost & Sullivan, said in a press statement: "The 3G revolution is inevitable as urban consumers who are the first adopters of mobile services demand faster speed and greater functionalities on their mobile handsets.

"China and India, given their huge populations and economies of scale advantage will account for much of this growth," Koay said.

Both countries are expected to introduce 3G services sometime in the near future, according to Frost & Sullivan. China, with a base of over 400 million mobile subscribers, almost double that of India's, recently revealed that it will have a 3G mobile network up and running by 2008.

Citing continued demands in certain markets for voice-only services, however, Koay expects subscription of 2G technologies to continue growing but at a more subdued CAGR of 12.3 percent over the next five years.

"In 2005, mobile data accounted for only 16.4 percent of the total Asia-Pacific cellular revenues. In markets such as Hong Kong, India, Taiwan and Thailand, the voice segment still reigns, where it commands more than 90 percent of the overall cellular revenues."

Koay also warned that despite the rosy outlook, certain hurdles still need to be addressed, such as the region's generally price-conscious user base, in order for 3G to be adopted successfully in the mainstream market.

Farihan Bahrin is a freelance IT writer based in Singapore.