Asia's Wireless Operators Await A Movement Beyond Just Voices
By CONNIE LING
THE WALL STREET JOURNAL INTERACTIVE EDITION
HONG KONG -- It happens every time you fly into Hong Kong: As soon as the plane touches down, the cabin is instantly filled with the ringing of mobile phones and loud telephone conversations.
To most, the noises are anything but pleasant. But not to Stephen Chau's ears. What he hears is the sound of opportunity.
"Eventually, more people [in Asia] will access the Internet with their mobile phones" than with fixed lines and personal computers, predicts Mr. Chau, director of engineering at SmarTone Telecommunications Holdings Ltd., one of the largest cellular-phone companies in Hong Kong.
That would spell opportunity for most cellular-phone operators in Asia as well. Traditional wireless-network operators are looking to new technologies that will be introduced in the next few years to move their business beyond simple voice communication. The high cellular-phone penetration in several of Asia's countries also makes the medium a much quicker way to wire up the large numbers of people that still aren't online.
"Without a doubt, mobile-phone companies will have to provide this type of access if they want to retain a competitive edge," says Pete Hitchen, regional Internet analyst with market-research firm International Data Corp. Asia Pacific. Most of the large phone companies in the region have promised to provide high-speed Internet and data services in the coming years, with phones capable of Web browsing expected to hit the market later this year.
Asia already boasts some of the world's highest mobile-phone penetration rates: In Hong Kong, for example, about half the population has a mobile phone, while in Australia, Japan and South Korea, one out of three people owns a mobile phone.
The online population is smaller: Only 14% of Hong Kong's population is online, compared with 26% in Australia, 12% in Japan and a mere 5% in South Korea, according to IDC.
Asia's extensive digital cellular networks have let phone users transmit data over wireless networks for some time, but data represent only a fraction of the traffic on those networks now. The biggest reasons data are such a small percentage of total traffic, network operators and manufacturers say, are the existing networks' limited speed and the lack of simple, user-friendly devices. The maximum transmission speed for the GSM network, which is used in most of Asia and Europe, is only 9.6 kilobits per second. Although newer switching technology can boost that transmission speed to 14.4 kilobits per second on some networks, it's still a far cry from the 56 kilobit-per-second speed commonly achieved by modems using regular telephone lines.
What's more, sending data over existing networks in Asia generally requires an add-on kit to connect cellular phones to laptops or handheld computing devices.
However, that state of affairs is expected to change drastically within the next year as new technology is rolled out commercially by companies including Hong Kong's Cable & Wireless HKT Ltd.; SmarTone, KG Telecom in Taiwan and Singapore Telecommunications Ltd. Phones capable of browsing the Web will hit the market in the next few months. By the middle of next year, upgraded networks will achieve transmission speeds of up to 117 kilobits per second -- and the next generation of broadband wireless networks in Asia, expected to be in place by 2002, will offer speeds of as much as two megabits per second. Singapore Telecom forecasts that in the next two or three years, data will account for 15% of the total traffic on its wireless networks, up from the current 5%.
Meanwhile, a plethora of new technologies will put the Internet "into every pocket," says Janne Jormalainen, Asian-Pacific business-development director of Finnish phone-maker Oy Nokia. Mr. Jormalainen says that users will be able to browse the Web and send and receive graphics -- or even streaming video -- on their cellular phones.
But will users want to do that? If the market in Japan is any indication, the answer is yes.
More than a million Internet-capable mobile phones have been sold by Japan's NTT Mobile Communications Inc., commonly known as NTT DoCoMo, in the past six months. "It's an Internet explosion," says Takeshi Natsuno, NTT DoCoMo's media director of gateway business development, adding that sales exceeded even the company's estimates.
The tiny i-mode phone, weighing just 90 grams (3.17 ounces), allows users to read Web pages with simple graphics and short text. Mr. Natsuno says the next few months will see the introduction of Java-enabled i-mode phones that let users download software that does everything from graphic-intensive online games to transactions requiring more sophisticated security features.
While Asians have been slow to embrace the Internet when compared with Americans and Europeans, they are gadget lovers and often jump on new technologies. What's more, mobile phones are often seen as status symbols.
"Hong Kong people came to adopt these things very fast," observes Craig Ehrlich, managing director of Mandarin Communications Ltd., which runs the Sunday wireless network in Hong Kong. "No reason why they won't do it with wireless Internet."
In Hong Kong, cellular-phone users have long been able to receive short e-mail messages, conduct banking and reserve movie tickets on their handsets. In Singapore, customers can receive financial information and buy stocks with their cellular phones. In Taiwan, phone users can receive stock quotes, get e-mail alerts and even request horoscope information by hitting a few buttons.
To these users, the introduction of high-speed wireless networks and wireless Internet capabilities simply means fewer buttons and faster results, says SmarTone's Mr. Chau.
Mr. Hitchen of IDC, for his part, predicts that adding Internet access to next-generation wireless devices will spur their adoption in many countries as users jump at the chance to pick up the latest high-status gadgetry. "Call it 'e'-go," he says. |
