2009 Southeast Asia Wireless Outlook

Future Wireless Growth in Southeast Asia to be Driven by Rural Market Segment

The Southeast Asian mobile market with 383 million subscribers in 2008, exhibited a year-on-year (YoY) growth of 36.0 percent and an overall wireless penetration of 72.5 percent, but the disparity in the penetration rates of different geographic segments in this region is huge. While the subscriber identity module (SIM) card penetration in Singapore and Malaysia have reached 131 percent and 97.8 percent respectively, Cambodia, Laos, and Vietnam are yet to make a real impact on the expansion rate charts. New subscriber growth in these markets is largely driven by users in rural areas, as networks continue to expand beyond the major urban areas.

In markets such as Thailand, mobile operators' average revenues per user (ARPUs) have been showing a steady decline due to competition-induced reduction in voice tariffs. "It is imperative that operators in such markets engage in more aggressive and focused marketing campaigns to meet the diverse needs of customers instead of further engaging in price wars," says the analyst of this research. Therefore, operator consolidations will be the order of the day once the industry matures and the market stabilizes.

With less than 6.0 percent of its subscribers currently on 3G networks, Southeast Asian markets have fallen behind other advanced markets in the race to the 3G bandwagon. However, the technology has been gaining much popularity over the past few years, as an increasing number of operators are deploying 3G networks to boost their non-voice revenues. "With 3G entering many new markets such as Vietnam and Thailand, the mobile broadband market in the Southeast Asian region is entering a new phase of growth that will generate valuable new revenue streams for mobile network operators," notes the analyst. "Enabled by faster network speeds, mobile operators will be able to offer a wide range of new services such as high-speed mobile Internet access, video content, and other multimedia services to boost their revenues."