Phil Harpur - Senior Analyst South, Central & South East Asia

Phil Harpur - Senior Analyst South, Central & South East Asia

Posts by Phil:

Mobile subscribers grow at a moderate pace in Afghanistan

Afghanistan continues to be confronted by the challenges. The political and civil stability of the country is a dark cloud hanging over the country; and is a particular threat to the effectiveness of the telecommunications network and the viability of the telecommunications sector.

By 2017 despite the positive signs of a civil society taking shape, the country was still suffering from the ongoing conflict and multiple difficulties in administering the nation. After many years of war and civil strife, an encouraging aspect of the country’s efforts to rebuild has been the considerable success evident in the creating of a functional telecommunications sector virtually from nothing.

Internet penetration in Afghanistan remains very low although has increased significantly over the past five years, increasing from 3% in 2011 to 13% in 2016. Penetration is predicted to increase to over 15% by 2018. Fixed broadband penetration remains very low in Afghanistan at less than 0.1%

Afghanistan has a highly competitive mobile market that continues to flourish despite the background of the ongoing conflict throughout the country. The mobile sector has been boosted by the absence of effective fixed-line alternatives. There are five mobile operators competing in Afghanistan’s telecom sector. Between them they claimed a total of more than 25 million subscribers, with an overall mobile penetration of 80% The market is predicted to grow moderately over the next five years to 2021 increasing to reach penetration of between 86% and 95%.

By 2017, there were over two million 3G mobile broadband subscribers in the country. In mid 2016 the MCIT reduced the cost of international bandwidth by 20%, in a move to lay the groundwork for the introduction of 4G services in the future.

For detailed information, table of contents and pricing see: Afghanistan – Telecoms, Mobile and Broadband – Statistics and Analyses


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Consolidation in Australia’s VOD Market Begins

Australia’s leading pay TV provider FOXTEL during the last few years has struggled to increase pay TV penetration in Australia. The market has also seen the launch of competing OTT platforms, including Stan and Netflix. These offer competitively priced basic packages, commonly below AU$10 per month letting consumers’ view content at a time of their choosing. Traditional TV viewing patterns continue to fall gradually in Australian households, and the advent of OTT viewing as well as IPTV will see a more rapid shift from linear to time-shifted TV in coming years.

The distribution advantage held by FOXTEL is slipping away as the NBN becomes built out over a greater number of premises, so expanding the reach of capable broadband infrastructure which enables subscribers to access OTT and IPTV content.

Following the end of analogue broadcasting, Australians have been able to access many more Free-to-Air TV channels as digital broadcasts. Although there are more channels available, the number of viewing hours has remained relatively stable for a number of years, and as a result individual channels, and particularly specific shows, have seen declining viewer numbers. Viewing habits have also been affected by the advent of catch-up TV services, which are available from the main broadcasters. In addition, subscription video services from operators such as Stan and Netflix are further eroding live TV viewing as subscribers choose instead to watch programs at a time of their choosing.

There are two major categories of paid online video content: Pay-per-view video-on-demand (PVOD) and subscription video-on-demand (SVOD) services. SVOD has emerged as the major category of paid online content in Australia. The global streaming revolution is gathering pace. Streaming is closing in on broadcast TV. The entry of SVOD providers Netflix, Presto TV and Stan saw a rapid update of SVOD services. This rapid increase in the rate of adoption of SVOD is occurring where high quality broadband is already available. The NBN will accelerate this trend as the mass deployment of high quality (fibre) broadband takes place via the NBN and will significantly decrease cost of delivery of SVOD.

The Internet now rivals broadcast TV as a vehicle to deliver consumer content. Its shift in user behaviour continues to drive change in the TV and media industries, prompting a move away from old formats and business models and ushering in an era of high-quality, on-demand entertainment. The broadcasters have been late entering the market – their focus has been on protecting their traditional business which are under threat from declining revenues, rather than on establishing a strong foothold in the SVOD market. Amongst the existing pay TV or free-to-air subscriptions there will be increased pressure on profitability as competition for content pushes up the cost of licensing. One of the few options left for broadcasters (and other traditional media companies) is to merge, in order to cut costs and increase their customer base.

In addition to Free-to-Air TV, pay TV is also under increasing structural pressure from SVOD providers such as Netflix. Fetch TV is emerging as a strong competitor to the incumbent Foxtel. Slowly but surely the NBN is being rolled out and this is something that also benefits Fetch, whose services are delivered via broadband. This distribution media supplies a great opportunity to offer an alternative to Australia’s leading pay TV service Foxtel.

With such a large number of national and international players competing consolidation is starting to take place. Quickflix has been forced to exit the market in 2016, followed by Foxtel’s Presto service later on in that year. BuddeComm predicts that the rate of SVOD growth moving into 2018 and 2019 will begin to taper off and eventually level off in around five years time.

For detailed information, table of contents and pricing see: Australia – Video Streaming, Broadcasting and Pay TV

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Mobile Broadband is the Backbone behind Indonesia’s Telecoms Growth

There has been considerable energy and turmoil in Indonesia’s telecom sector over the last decade or so. Growth, both in subscriber numbers and in revenues, has been strong and, more importantly, there are signs that the changes in the regulatory regime and operator restructuring are starting to have a positive effect on the industry. The mobile market has been especially positive. There was a good response to the recent launch of 4G/LTE services.

Continued progress in the development of the telecom sector will need further government action on restructuring the industry. A stumbling start to building the country’s fixed-line network was followed by a solid fresh start, aided by the embracing of fixed-wireless technology, which became the dominant component within that market segment. However, the fixed market is now a minor segment and in decline. This is even more the situation with internet which is still in a relatively early stage of development.

Invigorated by the highly successful mobile segment on the back of increased competition in the marketplace, the country’s telecom industry has found a new dynamic. The all-important national backbone network is taking shape and on the service side the rapid increase in mobile broadband subscriptions and smartphone take up has been remarkable. However, there had been some signs that the government was hesitating in its efforts to restructure the industry.

The fixed broadband internet market in Indonesia is still in the relatively early stages of its development. With Digital Subscriber Line (DSL) as the dominant fixed broadband technology in the country, the penetration of fixed broadband subscriptions was sitting at under 4%. The take up of high speed services based on fixed access platforms has only been modest.Fixed broadband penetrations stood at only 1.7% in 2016 and is predicted to increase to between only 2.7% and 3.3% by 2021.

This level of internet penetration remains low by world standards, but has been relatively consistent with its economic status and the availability of infrastructure, especially fixed-line services.

Low subscription patterns have been a challenge for the government in its building of the online nation that it is keen to realise. Of particular importance in addressing the challenge has been the rapid growth in mobile broadband access. 4G mobile services offering mobile broadband is relatively advanced and act as direct substitute to fixed line broadband and acts as an inhibitor for further fixed broadband rollouts. Mobile broadband subscribers have grown significantly over the past few years in Indonesia and penetration rates now stands at 50% of the overall population.

The country’s mobile market was characterised for many years by the large number of players licensed by the local regulator. Seven mobile operators are competing for revenues in the Indonesian market: Telkomsel, Indosat, XL Axiata, 3 Indonesia, SmartFren, Bakrie Telecom an dInternux (Bolt). Market leader Telkomsel continues to maintain a huge presence but is under increased threat from the competition.

All the major mobile operators in Indonesia are well advanced in the deployment of their 4G LTE networks. The two largest providers, XL Axiata and Telkomsel both have networks that covered over 70% of the country by 2017.

Over the last decade Indonesia’s mobile market has displayed solid growth over the last five years with penetration increasing from 103% in 2011 to 148% in 2016. This strong growth has been driven by an increase in subscribers from the market leader Telkomsel, supported by increases from Indosat, and 3 Indonesia. Growing use of mobile broadband has been a major driver. Mobile broadband subscribers have grown significantly over the past few years in Indonesia and penetration rates now stands at 50% of the overall population. Growth is predicted to taper off over the next five years to 2021 as the market has now reached a higher state of maturity.

Industry consolidation is possible towards 2018 as intense data competition may force smaller and unprofitable mobile operators to be pushed out of the market. Industry consolidation is more likely to have a positive impact on the local telco sector as it will reduce the overcapacity in the market and bring more stability to data tariffs.

For detailed information, table of contents and pricing see: Indonesia – Telecoms, Mobile, Broadband and Digital Media – Statistics and Analyses

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Fibre Broadband drives strong growth in Macau

Macau boasts a sophisticated, independently regulated communications market due to Macau’s status as a Special Administrative Region (SAR) of the People’s Republic of China following its handover from Portugal. Gradual liberalisation has now fully opened the telecoms market with the full impact slowly becoming evident. Demand for telecom services is significantly driven by the millions of visitors that visit the tiny enclave every year. 87% of visitors classified as residents of mainland China or Hong Kong.

Macau’s fixed-line market is transitioning to a fibre broadband market as the incumbent Compahnia de Telecomunicações de Macau (CTM) invests significantly in fibre access networks. As of 2017 CTM had deployed fibre broadband coverage to the majority of residential units and 100% of commercial buildings. CTM’s investment coincides with the entrance of Macau’s second fixed-line operator MTEL, with the latter a threat to the monopoly CTM has over the fixed broadband market, a monopoly made possible due to CTM’s ownership of the underlying fixed access network.

CTM’s aggressive tactics are showing results as the majority of households are expected to be connected via fibre by 2017, closing the window of opportunity for MTEL to poach subscribers from CTM’s sizeable DSL subscriber base. CTM faces another potential competitor in Macau Cable TV operator which is obliged to expand the reach of its underground cable network sixfold by 2017.

Macau’s mobile market is the most competitive sector of the telecoms market, with four mobile network operators and a mobile virtual network operator (MVNO) offering services. Competition is intense, with mobile penetration in excess of 200% due to multiple SIM card ownership as well as sales of SIM cards to visitors. Mobile broadband presents an alternative revenue growth opportunity, with LTE launches during 2015 allowing operators to offer more enticing products. In December 2015 CK 3 Macau launched its 4G LTE mobile network, making it the fourth and final LTE licensee to introduce commercial 4G services in the Special Administrative Region (SAR).

For detailed information, table of contents and pricing see: Macau – Telecoms, Mobile and Broadband

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The Philippines Mobile Market Moves Towards 5G

Despite competition from new carriers and mobile operators, PLDT has continued to be the Philippines’ dominant fixed-line and mobile provider. And as such has been a large part of the momentum in the country’s telecom market. Nevertheless, PLDT’s role has not gone unchallenged and in recent years Globe Telecom in particular has been pushing hard to overhaul the incumbent. In recent few years, the major operators have also been forced to cope with the pressures of slowing growth in traditional areas of the market and rising investment needs for new growth areas such as consumer broadband.

Broadband is finally building a healthy subscriber base, boosted by the considerable presence of mobile services in the mix of the various broadband platforms delivering internet access. There has also been good progress in the rollout of optical fibre infrastructure. In 2016 the President of the Philippines signed the bill to create the new regulator, the Department of Information and Communications Technology (DICT). The DICT effectively replaces a number of agencies whose functions and responsibilities will be absorbed into the new body. The DICT will develop a national broadband plan to accelerate the deployment of fibre-optic and wireless technologies across the country. In March 2017 the National Broadband Plan (NBP) was formally approved by the Philippines government. PLDT announced it would roll out fibre-to-the-home (FTTH) and is aiming to boost its current homes passed to six million by 2020.

Fixed line penetration in the Philippines has been in decline over the past 10 years. Penetration has declined from 4.6% in 2017 to 3.6% in 2012 and 3.0% in 2016.

A major challenge remained as only a little more than half of all Philippine towns and cities had a basic telephone service.

The mobile subscriber market in the Philippines has displayed strong growth over the past few years in an expanding market. Growth is predicted over the next five years in a maturing and increasingly saturated market. By 2021 mobile subscriber penetration is predicted to reach between over 130%. A key factor in the growth of mobile services is that they have proved to be more effective than fixed-line telephony in adapting to the country’s geographical features.

Mobile ARPU levels have been on a downward trend for a long time in the Philippines as competition in the mobile industry intensified. The operators continue to engage in aggressive price competition in an effort to grab market share.

A feature of the Philippines mobile market has been the near duopoly with Smart together with Globe Telecom maintaining a tight hold on the industry. However Globe Telecom has bridged the gap significantly over the past two years. Globe Telecom has increased its market share significantly over the past few years and now leads the market in terms of market share.

By 2017 both Globe Telecom and PDLT were well underway with the expansion of their 4G networks. Smart Communications has begun switching on faster 4G mobile data services using triple-carrier aggregation LTE-Advanced (LTE-A) technology. As part of Smart’s three-year deployment plan, PLDT Inc. intends to extend LTE coverage to 70% of the population by end-2017 and 95% of cities and municipalities by 2018.

The mobile broadband subscriber market in the Philippines has grown strongly over the past few years. Further strong growth in predicted over the next two years to 2018. The expansion of mobile broadband services is now providing more opportunities for the technology sector.

The Philippines is already preparing for the move from 4G to 5G. PLDT has signed an agreement with Huawei Technologies to gear up for the launch of 5G technology in the country by 2020. Both companies will jointly conduct research and development on 5G in the Philippines.

Broadband users in the Philippines have a number of high-speed internet access options available to them: Digital Subscriber Line (DSL), cable modem, Fixed Wireless Access (FWA), WiMAX and mobile data services. More recently, there has been a major push by market leader PLDT to offer fibre-based services; Globe has been trying to match the PLDT push where it can.

The total broadband market has observed slow to moderate growth over the last five years from a relatively small base of subscribers. Market penetration has increased from 5% in 2011, to 9% in 2014 and 10% in 2016. Moderate growth is predicted over the next five years to 2021. By 2021 broadband market penetration is predicted to reach between over 15%.

For detailed information, table of contents and pricing see: Philippines – Telecoms, Mobile, Broadband and Digital Media – Statistics and Analyses

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