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Low Diffusion Rate of Telecom Services in Asia Pacific Presents Tremendous Growth Potential25 December 2005
Asia Pacific having three of the four most populated nations in the world -- namely, China, India and Indonesia -- characterized by low diffusion of telecom services across these dispersed geographies, presents service providers with huge potential to conquer new grounds. This prompts service providers to invest large amounts in infrastructure in order to widen their network capabilities, attract more customers, and expand their subscriber base.
New analysis from Frost & Sullivan (http://www.telecom.frost.com ), Asia Pacific Telecoms Service Providers CAPEX Spending, reveals that capital expenditure (CAPEX) by service providers totaled US $40.67 billion in 2004 and expects to reach US $44.54 billion in 2008. CAPEX investments expects to peak in 2006 at an estimated total spending of US $48.41 billion.
If you are interested in a virtual brochure, which provides service providers, vendors/manufacturers, end users and other industry participants an overview of the latest analysis of the Asia Pacific Telecoms Service Providers CAPEX Spending, then send an email to Jennifer Duraisingam, Corporate Communications at jennifer.d@frost.com with the following information: your full name, company name, title, telephone number, e-mail address, city, state, and country. We will send you the information via email upon receipt of the above information.
"Telecom service providers in most Asian countries continue to increase their subscriber base as a result of growth in cellular services, wholesale data services, and broadband services," explains Frost & Sullivan research analyst, Krishna Baidya. "After surpassing the landline market in 2002, the cellular market in Asia continues to widen the gap across the region. A spurt in 2.5G and 3G subscribers and subsequent increase in usage levels will boost spending in cellular network deployment and expansion."
In fact, service providers across the region will continue to spend on core networks and are also likely to spend on service provision, as they want to be able to offer varied services in the future. Full-service operators are integrating voice, data and video application onto the same network to offer a variety of services and earn higher average revenue per user (ARPU).
The cellular services market in Asia Pacific shows high growth potential with an expected penetration rate of approximately 38 percent in 2008 from 21.2 percent in 2004. To capture the emerging market, service providers are scaling-up network coverage. Governments on their part are providing the impetus by placing high priority on establishing nationwide broadband infrastructures. This has resulted in significant investments on access technologies such as x digital subscriber line (xDSL) and cable infrastructure.
"The slow adoption of new services, inability of carriers to gauge the demand for services such as 3G, and delayed 3G roll-out by service providers has deferred the investment in many countries," explains Baidya. "Shortage of internal accruals, shrinking margins, falling ARPU, and complexities in debt financing are the cause for most operators being cautious, and in turn delaying the growth of this market."
However, improvement in debt availability due to strong economic growth trends in most countries is likely to trigger spending. With increased competition and the need to reduce costs, operators may opt to outsource networks to equipment vendors in the near future. This move will improve operators' cash flow and increase efficiency in revenue generation. Vendors will be more involved in key functions such as monitoring and surveillance of end-to-end services, network performance improvements, and hardware support.
The sudden surge in traffic, subscribers and technology upgrades are likely to help carriers stay in touch with the latest technology advancements. Moreover, the low diffusion rate and slow adoption of telecom services in rural areas in countries such as China, India, Indonesia and Thailand induce spending on core networks and scaling-up switching capacities. This offers service providers an opportunity for high growth and revenue potential in the region.
The Asia Pacific Telecoms Service Providers CAPEX Spending study aims to understand the spending rationale of telecom service providers and its link to the revenue stream of equipment vendors. It provides a total network spending analysis of the following networks: optical, cellular, Internet protocol (IP)/data and voice, and also offers a segment analysis by service. The study includes chapters on region-specific drivers, restraints and industry challenges with strategic recommendations to enable service providers to remain committed to a specific region. Executive summary and analyst interviews are available to the press.
Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit http://www.frost.com .
Asia Pacific Telecoms Service Providers CAPEX Spending
4B50
Contact:
Sarah Lourdes
Corporate Communications - Asia Pacific
P: +603.6204.5878
F: +603.6201.7402
E: sarah.lourdes@frost.com
Jennifer Duraisingam
Corporate Communications - Asia Pacific
P: +603.6204.5869
F: +603.6201.7402
E: jennifer.d@frost.com
Mireya Castilla
Corporate Communications - North America
P: +1.210.247.3830
F: +1.210.348.1003
E: mireya.castilla@frost.com
Janina Hillgrub
Corporate Communications - Europe
P: +49 (0) 69 77 0 3311
F: +49 (0) 69 23 4566
E: janina.hillgrub@frost.com
Sharmin Jassal
Corporate Communications - Australasia
P: +61.2.8247.8900
F: +61.2.9252.8066
E: sharmin.jassal@frost.com
http://www.frost.com
Keywords in this release: telecom spending, CAPEX, Asia Pacific, telecom service providers, wavelength division multiplexers, WDM, global system mobile, GSM, code-division multiple access, CDMA, wideband code division multiple access, WCDMA, CDMA2000, core, edge, access, central office switching, next-generation network, NGN, intelligent network, fixed voice service, fixed data & transport network service, cellular service, operating support systems, OSS, business support systems, BSS, customer relationship management, CRM, research, information, market, trends, technology, service, forecast, market share
Source: prnewswire
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