This is despite the current slump in the telecommunications market. “After over 10 years of high-speed growth powered by the Internet and cellular industry, the (global) telecom market is in crisis,” said Bertrand Bidaud, Asia Pacific director of Telecommunications for Gartner, in a press statement.
In an email interview yesterday, Biduad disclosed that a quarter of a million jobs have been lost in the telecom industry worldwide in the second quarter alone. In addition, out of the eight top vendors (Alcatel, Cisco, Nokia, Siemens, Lucent, Motorola, Ericsson, Nortel), four (Cisco, Lucent, Motorola, Nortel) had two successive quarters of revenue decline compared with last year, he said.
However, he remains optimistic about market opportunities in Asia Pacific, as certain segments within the sector--namely broadband access and wireless LAN--are bucking the down trend and experiencing “spectacular growth” in revenues.
According to Gartner, broadband access revenues in Asia Pacific, including Japan, are expected to hit US$5.8 billion in 2005, driven by key access technologies such as DSL (digital subscriber line), cable modem and Ethernet.
“With some of the cheapest prices for broadband services anywhere in the world encouraging take-up, Asia Pacific is fast becoming a global broadband leader,” said Andrew Chetham, senior analyst for Gartner Dataquest’s Asia Pacific Telecommunications and Networking group, in the report.
The number of broadband Internet subscribers in Asia Pacific is expected to reach 37.8 million by 2005. Last year, there were 6.1 million broadband users in this region, most of whom were from Korea, Biduad said.
“The tremendous growth initially experienced in South Korea is beginning to be seen in markets like Taiwan and Hong Kong. We expect other developed markets like Singapore and Australia, that may have made a slow start, to begin to make up ground in the next 18 months,” said Chetham.
Biduad added that mature markets like Korea, which is approaching saturation, would see increased competition, as opposed to developing countries such as China and India.
However, the report also noted that broadband deployment may be delayed in countries like the Philippines, Indonesia and Thailand for the next two to three years due to infrastructure and cost issues.
With the majority of broadband services to the home, and increasingly to the office, already being delivered using DSL technologies over the existing telephone infrastructure, Gartner expects DSL to take the lion’s share of the broadband market.
This means that the largest providers of broadband access will be monopolies or former monopolies such as Korea Telecom, PCCW-HKT and Singtel, Gartner said.
By 2005, Gartner projects there will be 24.3 million DSL subscribers across the Asia Pacific region.
Cable, however, will not fare as well. “Cable is not growing as strongly, partly because DSL service is also focusing on corporate sectors while cable is almost only for residential. Revenue for cable services is expected to be only slightly more than 50 percent of DSL in 2001 in Asia Pacific,” said Biduad.
Wireless LAN another window of opportunity
Wireless LAN equipment is another area that's expected to do well, with revenues predicted to reach US$230 million in 2001.
At a compound annual growth rate (CAGR) of 28.4 percent, the wireless LAN equipment market is expected to top US$625 million in 2005. Demand for wireless LAN has grown 52.3 percent from mid-2000 to mid-2001.
Biduad, for one, believes that wireless LAN technology meets "a demand for mobility within corporate offices and connectivity in hot spot areas”. Early adopters of wireless LAN technology services include airports and hotels located throughout Asia.
“As has been the case in North America and Europe, the initial application for wireless LAN technology in Asia Pacific has been portable PC connectivity for business travelers to the Internet and their corporate networks. Specialist service providers such as SkyNetGlobal (an Australian company) are offering wireless LAN services in airports, hotels and other public places across Asia,” said Gartner analyst John Calvert in a statement.
Singapore, Japan, Korea, Australia, New Zealand, Hong Kong are the countries leading in the demand for wireless LAN equipment in Asia Pacific, the report said.
Singapore, said Gartner, has been an “especially aggressive” adopter of the technology. It was one of the first countries in the region to have services in its main airport and most of its leading educational establishments. Public wireless LAN services have also recently been introduced here.