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Asian economic growth sparks Pacific Rim telecom surge

By Jay Gillette , Network World , 01/23/2006
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HONOLULU — The Pacific Telecommunications Council based here concluded its 28th annual conference this week to news of revived Asian economies and recovery of telecommunications markets throughout the Pacific Rim. Telecommunications carriers, along with operators of satellite services and undersea cable companies, reported expanding customer bases and increasing levels of investment for infrastructure.

With continuing prosperity in China, latest figures from the Beijing University of Posts and Telecommunications show the Chinese market with 744 million telephone subscribers. Fixed-line telephone subscribers weigh in at 353 million, surpassed by mobile subscribers at 391 million.

Penetration rate for mobile telecommunications in China is 30%. For comparison, the U.K. and Italy lead EU nations with over 80% penetration and the United States has about 60% penetration.

In 2005, revenue for Chinese telecommunications operators was $70 billion, up from $50 billion in 2002. Because of larger subscriber bases, revenue growth has leveled off, and in fact slightly declined year-on-year. For the same period, in 2005 growth rate was 11.5%, compared to a higher growth rate of 14.5% for 2002.

The conference renewed attention to the Chinese government’s strategy of making the Beijing Olympic Games of 2008 serve as a catalyst for economic development. China Netcom (CNC), the major incumbent local exchange carrier for north China including Beijing, intends to be a significant international carrier in the Pacific region by that time. The internationalization of formerly national carriers is an emerging trend throughout the Asia Pacific. International interest on the 2008 Summer Olympics could well intensify in telecommunications infrastructure and services buildup in the next three years.

Advanced mobile applications are generating new interest. California consultant Bruce Baikie framed his talk on opportunities in mobile music applications with two dates - 1924, the year of the first mobile telephone, and 2003, the year mobile telephone subscribers overtook fixed subscribers worldwide. Baikie suggests music applications using mobile telephony will become the “iPod killer” in the near term.

Telecommunications researcher Baharuddin Aziz, from Mara Technological University in Malaysia, indicated significant interest in mobile or cell TV in that South East Asian country. Rapid deployment of 3G mobile technology has led to a 68% penetration rate in the nation’s 26 million cell subscribers, and he sees this as a driver for interest there in cellular TV.

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