2009 North Asia Wireless Outlook

China Crucial to North Asian Mobile Market Growth as the Region Continues to Lead in Innovation and Market Performance

The North Asian markets are well ahead of the other regional markets in total subscriber and revenues, innovation, and average revenue per user (ARPU) levels. North Asia has several saturated markets - some with mobile penetration rates well over 100 percent. Significantly, the region includes China, the largest and fastest growing subscriber market in the world with a mobile penetration rate of 51.6 percent in 2008. The North Asian wireless market had 878.1 million subscribers in 2008, exhibiting a year-on-year (YoY) growth of 10.1 percent, much of it contributed by China. "The North Asia region accounts for almost half or 49.2 percent of total subscribers across 18 Asia Pacific countries," says the analyst of this research. "Driven by new subscriber growth, the market is expected to grow at a compound annual growth rate (CAGR) of 7.7 percent to reach 1.37 billion by 2014."

Apart from China, most North Asian markets are highly saturated subscriber markets and the main challenge is maintaining profitability, reducing subscriber churn, and achieving high ARPU. Japan and Hong Kong are likely to experience negative service revenue CAGR while South Korea and Taiwan may achieve service revenue CAGR below 1 percent from 2008 to 2014. Due to the high degree of competition and market saturation, Frost & Sullivan expects intense price competition in these markets, lack of service differentiation, and use of flat-rate plans in the majority of mobile data subscribers.

Mobile revenues in most markets such as Japan, Hong Kong, and South Korea are driven less by subscriber growth and more by data usage such as video, ringtone downloads, text messaging, and e-mail. Japan has a reputation for using cutting-edge technologies while South Korea leads in innovations, new business models, and applications. North Asian markets tend to encourage bundled service offerings that promote data usage, and Southeast Asia and Australia and New Zealand markets are starting to emulate such business models. Data revenues will be driven mainly by mobile broadband services and the continued success of SMS. "Japan, South Korea, and Hong Kong are well ahead of most other markets in rolling out new networks, adopting technologies, and innovation," notes the analyst. "However the inclusion of China and Taiwan places North Asia after the Australia and New Zealand region in adoption of advanced networks."

Market Sectors

Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:

• Mobile broadband

Technologies

The following technologies are covered in this research:

• GSM/GPRS/EDGE
• CDMA2000 1x
• CDMA2000 1xEV-DO
• UMTS/HSPA
• LTE