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Friday, May 11, 2007

Inevitable decline in fixed line access continues in Asia-Pacific

According to Ovum, the analyst and consulting company, fixed line access continues to decline in Asia Pacific, but at a slower rate than previously.

One key finding of Ovum's recently published report 'Regional overview: Asia Pacific' which surveys developed market performance concludes: Average incumbent decline in Public Switched Telephone Network (PSTN) access lines slowed for the second year running to only 1.6% in full year ending 2006 compared to 1.8% in 2005. This rate of decline is far less than in Western Europe, which averaged 5% in the same period.

The decline in AP is being driven by the same factors as elsewhere: fixed-to-mobile substitution (FMS), increased competition and the removal of second lines due to broadband growth. However, cheaper line rental is resulting in fewer cord cuts and limited churn away from the incumbent to alternative providers. In addition, organic growth in some markets is offsetting decline.

Average PSTN revenues however fell more sharply, by 5% in 2006, due to price drops, competition and falling volumes attributable to FMS and VoIP. Single-digit PSTN revenue decline is expected going forward.

To stem the tide, operators are turning to subscription-based pricing and bundling.

Other key findings of the 'Regional Overview: Asia Pacific' report include:

  • Average broadband ARPU declined 5% in 2006.
  • Average mobile connection growth in 2006 in the markets surveyed slowed to 5%, half the 2005 rate.
  • Average mobile revenue in 2006 grew 7%.
  • After a considerable squeeze in 2005, margins in 2006 are fairly flat.

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