IDC Telecom Predictions For Southeast Asia
Analyst firm IDC has been busy publishing interesting predictions and statistics, the latest being Southeast Asia Telecommunication Top 10 Predictions: 2010 The Year for an Upswing.
This list serves as a warm-up for the company’s soon to be announced predictions for Thailand.
Here are the predictions with value-add comments accordingly.
1. Telecommunication Services will Perform Strongly in 2010
The SEA telecommunication services market, encompassing mobile voice, mobile data, fixed telephony, corporate data and Internet access services (IAS), will reach US$36.1 billion in 2010, or 8% higher than its 2009 performance.
Mobile data will lead the growth with a projected 13% revenue expansion, fueled by aggressive competition, wider services selection and strong drive for services such as mobile Internet and a host of content and applications. Growth will be highest for Vietnam and Indonesia at 15% and 13% year-on-year (YoY), respectively.
Mobile data is certainly a big trend, a major aspect being mobile internet usage. Thailand currently has 12 million users, a figure AIS expects to rise by percent reaching 18 million by the start of 2011 – a figure that perhaps needs readdressing given IDC’s project 13% expansion for the region as a whole.
2. The Flight Plan: Telecommunication Carriers Will Spread their Wings Into the Clouds
In 2010 IDC expects incumbent carriers in the SEA region to embark into the cloud computing space as an important part of their long-term strategies of expanding their role in the overall ICT supply chain. Cloud computing is one of the sweeping technologies to have emerged in the ICT industry in recent times. Given that the networks are the foundation on which these cloud services are being delivered, IDC believes that SEA telecom carriers are in a position to compete in this market in the coming years.
Director has a recent article (previewed here) on the cloud computing space. From speaking to experts in Thailand, Southeast Asia and Asia generally, cloud computing is seen as a technology which could ‘leapfrog’ Thailand’s domestic services and technology.
3. Ready-Set-Go: Carriers Primed to Contend for and Win Major IT Managed Services Deals
IDC believes that telecommunications carriers in SEA will become serious contenders in managed IT services bids in 2010, particularly in the areas of network services, desktop outsourcing, and business process outsourcing (BPO) services, as well as verticalized managed solutions. Over the years, carriers in the region have gradually transformed themselves from being access providers to being end-to-end service providers. In 2010, IDC expects telecom carriers to see major wins related to provisioning of managed IT services.
Aforementioned cloud computing (and leapfrogging) has a major part to play in raising the standards, services, and thus the business of IT in Thailand.
4. FTTx Roll-out: Raising the Bar for Broadband Speed
Many major broadband service providers anticipate to launch commercial FTTx services in 2010, following roll-out in selected areas in the last few months. IDC anticipates that although the impact of FTTx availability on subscriber numbers may be low, it will raise the expectations from broadband speed, both fixed and wireless. 2010 will be an important "wait-and-see" year for the market as FTTx deployments will force broadband service providers to revamp their broadband packages and make improvements on speed and service quality.
Fully in agreement with the conclusion that mobile broadband is not yet mainstream but significant for raising expectations and standards. From The Nation this week:
Research firm Ovum has forecast that the number of mobile broadband users in Thailand will grow to about 1.66 million this year. The number was only 595,000 last year. By 2014, the number is expected to rise to almost 30 million.
Mainstream, full 3G is clearly the key here. It would be nice to discuss mass market 3G in Thailand without referring to an oxymoron.
5. CAPEX Will Shift to OPEX
In 2010, many operators in the region, most notably Indonesia and Vietnam, will transform their spending orientation from being capital expenditure (CAPEX)-intensive to one that is largely based on operational expenditure (OPEX).
More than the need to drive down costs, IDC sees rapid technology development and the need of carriers to be on top of this development in order to remain competitive will be key drivers to this shift. The new year will see telecom carriers in several SEA countries accelerating their migration to solutions and managed services.
6. 2010: The Smartphone Will Rise
With the growing sophistication of mobile users, improving mobile data rates and a closer collaboration between mobile phone vendors and mobile carriers, IDC foresees an acceleration in smart phone buying in 2010.
Higher performance of devices and declining prices has made smart phones more appealing and affordable to a wider range of customers. In the new year, smart phone shipments in SEA will reach 9.7 million, or 14% of all phones shipped. This will represent a YoY growth of 25%, much higher than the expected 8% expansion for overall mobile phones.
IDC statistics suggest 1.5 million smartphones were sold in Thailand in 2009 while sales of 2 million are predicted for this year.
It is clear smartphones are a growing segment, but relevant for the bigger picture in a country with more than 65 million? I don’t believe so...yet.
7. Apps on the Run: Development of Mobile Applications Will Speed Up
IDC expects, in the year 2010, mobile market players in SEA will speed up development and introduction of innovative mobile applications to their customers. Applications surrounding the themes of social networking, local-based information-on-demand and enterprise mobile applications will receive the most focus in terms of development and market adoption. Mobile service providers are anticipated to work closely with third-party companies to develop applications for their subscribers.
BlackBerry, for example, does not yet have a Thai app store but Southeast Asia is its fastest growing developer market, with more new developers joining the BlackBerry program than anyone else in the world.
iPhone app develop is also growing in Thai with an increase in locally production, for example this Nectec tourist guide (albeit with room for many changes).
8. Connected with No Strings Attached: Mobile Broadband Adoption Will Accelerate to Great Heights in 2010
IDC predicts that mobile broadband adoption growth in SEA will reach its highest point at close to 80% in 2010. Declining service rates due to SPs revamping contract plans and making available prepaid options in some markets, dropping prices of devices that support mobility such as notebooks, mini-notebooks and smart phones and continued roll-out of HSDPA/HSPA and WiMAX base stations in SEA countries will drive new subscriptions.
Universal serial bus (USB) dongle-based broadband service operating on 3G/HSDPA technology will be the prevailing mobile broadband flavor in the region.
Citing The Nation again, there are set to be more than 1 million new mobile broadband users in Thailand by the end of 2010 – around 100% growth.
3G has become a political issue making it very difficult to predict as/when full 3G will arrive in Thailand.
Dongle-based broadband, for laptops etc, is a whole different ball game indeed.
9. 4Get Mobile 4G: LTE and Mobile WiMAX Will See Little Traction in Southeast Asia in 2010
As the SEA region continues its roll out of 3G services, especially with countries such as Vietnam and Thailand yet to launch 3G services, IDC expects that there will be little attention paid to LTE and mobile WiMAX in 2010. Despite potential benefits from these technologies, SEA countries are still focused on either the launch of 3G services, or on maximizing returns on current 3G networks. Early trial in 2010-2011 time frame may, however, happen in Singapore, where 3G/3.5G penetration is much higher than other SEA countries.
10. Android Will Shine in the New Year
Android OS is expected to make a big leap forward in 2010 with a projected shipment growth of 260%, outshining early movers in the smartphone OS space. Android's open-source positioning has made the OS a favored option for third-party device makers and operators. Many major vendors have committed to launch Android-based mobile phones in 2010.
China brands and local brands, which have become popular in markets such as Indonesia and Thailand, are also expected to adopt this OS. Android will not replace or affect more established platforms but shipment will achieve growth rate in triple digits in 2010.
I don’t see Western-style Android making a big splash in Thailand as between BlackBerry and iPhone the Thai market is fairly covered. Where Android can make a difference is on affordable devices.
Currently the BlackBerry Curve 8520 is the entry-level smartphone at 12,000. Chinese imports running Android may be capable of offering a comparable degree of functionality – email, apps, mobile web – for a fraction of the price.
In this respect, Asia differs from the West where Android has seen high profile adoption from Motorola, HTC and others who compete in mainstream smartphone price brackets. The potential for the Thai smartphone market is budget, entry-level devices.
