NEW STRAITS TIMES (MALAYSIA)/ Asian countries prepare to issue 3G licences
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Asia Intelligence Wire via NewsEdge Corporation : THIRD Generation Mobile Communications or 3G for short, is basking in the industry and media limelight of the times.
Amidst forecasts of the ubiquity of mobile telephones; increasing applications in the Internet space; increased competition spurred by an eagerness to cash in on the growth potential in mobile commerce and the availability and development of technology network services, 3G is a force to be reckoned with. It promises to provide universal accessibility and mobility; heralding the arrival of a mobile commerce revolution.
TELECOMMUNICATIONS INDUSTRY
The global telecommunications industry has matured. Today, more than 8.5 per cent of the world population owns a mobile telephone.
That is projected to reach 20 per cent by 2003 (more than one billion subscribers), according to Frost & Sullivan's forecast. A closer look at worldwide industry trends reveals that eroding differentiation between products and services has created a need for new market growth stimulus.
In addition, reductions in revenue per subscriber due to heated competition in the global telecommunications space has been a major factor propelling service providers to identify a unique value proposition.
3G ADOPTION
Take a paradigm shift to Asia, where one of the biggest growth market for Internet and its usage is targeted to have its Internet population increase at an average growth rate of 40 per cent per annum between 1999 to 2003, and the picture becomes even clearer. For network operators and vendors alike, Asia has been identified to be the next high growth market for mobile commerce - a cash cow that will see the number of Internet users in Asia expected to comprise 1/4 of total world Internet users by 2003.
3G MOBILE STANDARD
Research and development to establish a universal mobile standard for 3G mobile networks and services were well underway as early as the late 1980s. Yet, it is not until present times that the value of 3G is leveraged by the readiness of a global telecommunications market to adopt the technologies and lead trends in their onward surge towards a wireless world of communication.
In Pan Asia, the pace of adoption of 3G is country-specific. Japan, South Korea and Australia are expected to be among the first, with Taiwan, Hong Kong and Singapore forecast to follow suit. What we have found through our research and consistent monitoring of the regional telecommunications industry is that Asia boosts of a high growing number of technically-savvy young adults which we believe will be prime market for the 3G boom. 3G is exciting for industry participants in the region as it is expected to open up new revenue channels."
Japan will see the first commercial launch of 3G services in the first quarter of 2001. NTT DoCoMo, Japan Telecom Group and the DDI group are most likely to be awarded the licensces. NTT DoCoMo will be the first to launch the service in the first quarter of 2001 using WCDMA.
South Korea is most likely to be the next market in the region to see the commercial deployment of a 3G network.
The government will most likely adopt the beauty contest approach to issue the licences by December 2000.
For initiating a bidding process the government would have to approve a revision in the Radio Waves Act to pave the way for change in the licensing procedure.
Singapore and Hong Kong have both invited a consultation process with the industry, and are likely to award the licences by the last quarter of 2000. Both these countries are competing aggressively to emerge as the telecommunications hub in the region. OFTA (Office of the Telecommunications Authority), the telecom regulator in Hong Kong had indicated a preference for a beauty contest approach to award the licence.
A senior official at the IDA (Infocomm Communication Authority) in Singapore also hinted at the prospect of a two stage approach using a mix of both the beauty contest and bidding process for the award of licences.
Thailand surprised a lot of industry people when it awarded a joint licence to the two monopoly operators CAT (Communications Authority of Thailand) and the TOT (Telephone Organisation of Thailand). There are no licence fee commitments attached to this issue of licence. The service is not expected to be launched commercially until 2004.
Although Taiwan has yet to announce any firm dates regarding the issue of licences, the market seems to indicate that close to four licences may be awarded.
In a major development, a victory for the CDMA camp, the former monopoly operator Chunghwa Telecom has decided to deploy a CDMA network which will eventually be upgraded to a 3G network.
Australia has announced that it will be opting for a bidding process to award the licences.
The Australian government has indicated that it will be able to raise close to AS$ 2.6 billion by auctioning the licences. It has included these estimates in its budget for the year 2000-2001.
The Australian Communications Authority has currently invited comments from the industry on how many licences should be awarded and other issues.
Philippines, India and China are yet to announce any firm dates for the invitation of the applications or for the issue of licences.
Even though there is no particularisation on the 3G licences from the Malaysian Communications and Multimedia Commission, increasing efforts in the multimedia and IT-enabled services by the Government, will eventually be the key initiator of 3G adoption in the country. Currently, the mobile penetration in Malaysia is at 16 percent; Internet users stand at 2 percent of the total population.
Phenomenal growth is forecast in both markets where by end of 2003, mobile penetration will reach 25 percent and Internet users will grow almost five fold.
*Balaji Bhoovarahaan is an industry analyst with Frost & Sullivan, Technology Practice.
<<Asia Intelligence Wire -- 07-05-00>> |
