17.3 million IPTV subscribers in Asia Pacific by 2010

Ovum RHK has published the results of a 14-country independent assessment of broadband deployments and service drivers in the Asia-Pacific region, with a specific focus on fiber-to-the-x (FTTx).

The result was based on interviews with major carriers in Australia, China, Hong Kong, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Taiwan, Thailand, and Vietnam, the study addresses fiber-to-the-home (FTTH), fiber-to-the-building (FTTB), digital subscriber line (DSL), cable modem termination system (CMTS), and wireless initiatives throughout the region. It was conducted jointly by Ovum RHK and the APAC FTTH Council.

“Ovum believes there will be over 195 million broadband subscribers in Asia-Pacific by the end of 2010,” said Lynn Hutcheson, Vice President, Communication Components at Ovum RHK. “Many operators indicated that content services were going to be a key component of their offerings. However, there are vast differences as to how each country regulates IPTV and content delivery over telecom infrastructures.”

I was able to correspond with David Kennedy, Ovum's Research Director (Telecoms - Asia Pacific) and got the following as well:

• There were 98 million broadband subscribers in Asia-Pacific region (including China and India) in December 2006.
• There were a total of 1.5 million IPTV services in the Asia Pacific in December 2006. This is lower than In-Stat's estimate of 2.7 million IPTV 2006 subscribers. This is probably due to differences in the definition of IPTV and markets included in their respective definition of the region.
• By IPTV, Ovum refers to ‘paid for’ television services offered to consumers by telecom operators and ISPs. According to Kennedy, "These services are usually provided using IPTV technology, but we use the term more widely to include services provided by those above using other technologies such as digital terrestrial television and satellite, often as a hybrid solution. They are sold as part of a bundled offering (typically including broadband access and fixed line telephony), or as a standalone service."
• Ovum excludes television services provided over the public Internet, often known as Internet or Web TV. They also exclude television services supplied by cable operators, satellite broadcasters, free-to-air digital television broadcasters, and free-to-air analogue television broadcasters.They also exclude video on-demand (VoD) services provided by telecom operators and others.
• Ovum projects 17.3 million IPTV subscribers in the region by December 2010.

The businesses that will be most affected by IPTV growth are those into DVD rental, Free to Air TV, and pay TV services. It will be interested to know how the business model of this segment shall evolve to survive this upcoming market changes.

Online Gaming Community Worldwide Reaches 217 Million People

comScore (NASDAQ: SCOR) released the results of a global study into online gaming, showing the number of unique visitors to these sites to have reached almost 217 million worldwide – a year-on-year growth of 17 percent.

The comScore World Metrix study took into account all sites that provide online or downloadable games, excluding gambling sites. The sector attracted 28 percent of the total worldwide online population in May and recorded an average of 9 visits per visitor. Said Bob Ivins, EVP and managing director of comScore Europe:

“With one in four Internet users visiting a gaming site, playing games online is extremely popular. The fact that these websites are pulling in over a quarter of the total worldwide Internet population shows what a global phenomenon gaming has become. The potential of the online gaming arena should be especially appealing for advertisers, as the average online gamer visits a gaming site 9 times a month.”

Yahoo! Games was the largest property, attracting 53 million unique visitors. MSN Games followed in second place, having grown by 16 percent since May 2006 to reach 40 million unique visitors in May 2007. Both properties provide a mixture of strategy, trivia, arcade, and board games, with puzzle and card games proving to be the most popular choices for gamers in both cases.

Other popular sites include Miniclip, EA Online, Free Online Games, Addicting Games, RealArcade sites, Zylom, and WildTangent.

IPTV to Make Big Gains in Asia

Competition between IPTV and cable/satellite TV is heating up in Asia, with IPTV poised to gain significant market share over the next several years, reports In-Stat. With the help of IPTV, incumbent telcos have the opportunity to fundamentally change their broadband customers' video service experience, from traditional video clip streaming to downloading and just plain watching TV.

Recent research by In-Stat found the following:

• There were 2.7 million IPTV subscribers in Asia in 2006, and this number is expected to exceed 33 million by 2012.
• Total revenue from consumers of IPTV content broadcasted in Asia/Pacific will reach US$8 billon by 2012.
• Mature markets include Japan and Hong Kong, contributing to about 60% of the total Asia/Pacific subscriber population in 2006; these markets are expected to continue to lead Asia/Pacific in IPTV development.

Conditional access products and technologies are gaining ground due to this growth trend.

Worldwide broadband subscribers to hit 567 million by 2011

Over the past 12 months, approximately 65 million new broadband subscribers signed up for high-speed access to the Internet, reports In-Stat. By 2011, total worldwide broadband subscribers will number 567 million, almost double the current 285 million subscriber base, the high-tech market research firm says.

Recent research by In-Stat found the following:

• DSL and cable modem services are the top access technologies, providing 92% of worldwide broadband connections.
• By 2011, worldwide DSL subscribers will account for 58% of all worldwide broadband connections.
• By 2011, there will be over 55 million households using a Fiber-To-The-Home (FTTH) architecture to provide broadband access.
  

The In-Stat research, "Broadband Gets Big: Global Broadband Subs Hit 285 Million" covers the worldwide market for broadband services. It provides forecasts for broadband subscribers by technology and by region through 2011. It also contains analysis of market drivers and barriers for each of the access technologies.

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.
  

Social networks face membership and monetization issues

It is know that online communities (social networks) have experienced stellar growth in recent years. However, high tech market research firm In-Stat reports that their future remains somewhat uncertain and sees both membership and monetization as key issues for social networking sites. Only those that can overcome these issues will survive.

In-Stat also found the following:

• MySpace is the most popular social networking website with 140 million members
• 30% of survey respondents pay for premium services or features on social networking sites.
• Site operators are still struggling to find profitable business models. Respondents who indicated no future plans to purchase premium services on social networking websites cited expense and lack of desired services and features as the main reasons for lack of purchase.
• Less than 13% of survey respondents use mobile social networking services. Furthermore, the overwhelming response was that the use of mobile devices for social networking simply was not of interest to them.
• The biggest American generation, the baby boomers, is frequently overlooked.
  

10.6 Million U.S. Households Now Use a VoIP Telephone Service

Cable operators and Vonage are driving continuing growth in the US residential Voice over Internet Protocol (VoIP) telephone market, according to In-Stat. According to data from the high-tech market research firm's US Residential VoIP Market Tracker service, more than 10.6 million US households now have at least one active VoIP user, up from approximately 9 million households at the end of Q3. The emergence of the cable operators as a dominant market force seems to have slowed the growth of the client-based VoIP market, with only Skype showing gains in this segment during the 4th Quarter.

The firm's service utilizes a combination of end-user research and market analysis to estimate usage and market share among all of the major service providers, network-based providers such as the cable operators, analog-telephone adapter (ATA)-based services providers such as Vonage and SunRocket, and client-based providers such as Skype, on an ongoing basis. Recent research from the service also revealed that:

• More than 61 % of active residential VoIP users reported that they had discontinued or replaced a traditional (non-VoIP) phone service when they got their VoIP service, including a whopping 76 % of those who use only a network/ATA-based service like those offered by the cable companies or Vonage.
  
  
• Skype's dominance of the client-based VoIP market has grown as its major competitors in this segment lost active users during the fourth quarter while it continued to show strong growth.
  
  
• The ability to bypass international tolls continues to be a big driver of client-based VoIP services, with users of client-based VoIP services reporting that 52 % of their VoIP calls are international long distance while network/ATA-based VoIP users report only 6 % of their calls are international long distance.
  
  
• The percentage of residential VoIP users who report that they use their service for business calls either in part or exclusively continues to rise with 51 % reporting that they use the service for both business and personal calls and 4 % reporting they use it exclusively for business calls.
  

Broadband subscribers reached 281.5 million worldwide

Point Topic and eMarketer just released their respective reports estimating the growth of broadband subscribers worldwide. Point Topic pegs this at 281.5 million while eMarketer estimates it at 251.2 million.

U.S. and China has the highest broadband market in the world.

Japan passes 100 million mobile phone subscriber mark

According to eMarketer, Japan just passed the 100 million subscriber mark for mobile phone users. In addition, 70% of the Japanese population or 89 million people are connected to the Internet. Exclusing Internet and PDA users, comScore Networks estimates this at nearly 54 million.

eMarketer believes that the country's progress in the mobile market arena makes it a model to benchmark with for converged media developments.

Global Internet Audience has Grown 10% in January 2007

comScore Networks just announced that 747 million people, age 15+, used the Internet worldwide in January 2007, a 10-percent increase versus January 2006. Among the top 15 countries (ranked by penetration), Internet audiences in India, the Russian Federation and China increased the most in 2006, growing 33, 21 and 20 percent, respectively.

China - 2nd largest Internet population in the world
China now represents the second-largest Internet population in the world, with 86.8 million users, after the U.S., which rose 2 percent year-over-year to 153.4 million users age 15 or older in January 2007.

Internet users outside the U.S. now represents 80% of the world's online population.

Top 15 Countries by Internet Penetration
Unique Visitors Age 15+
January 2007
Total Worldwide – All Locations
Source: comScore World Metrix

Worldwide - 746,934,000

• United States - 153,447,000
• China - 86,757,000
• Japan - 53,670,000
• Germany - 32,192,000
• United Kingdom - 30,072,000
• South Korea- 26,350,000
• France - 24,560,000
• India - 21,107,000
• Canada - 20,392,000
• Italy - 18,106,000
• Brazil - 14,964,000
• Spain - 12,710,000
• Russian Federation - 12,707,000
• Netherlands - 11,077,000
• Mexico - 10,149,000

Note that this excludes traffic from public computers such as Internet cafes or access from mobile phones or PDAs.

Canada, Israel, and South Korea Lead the World in Online Engagement
As a measure of engagement, comScore also analyzed the top 10 countries ranked by average hours online per visitor for January 2007. Canada led the list, with the average user spending 39.6 hours (and 41.3 hours/ month among broadband users) online during the month. Rounding out the top 5 were Israel, South Korea, the U.S. and the U.K. – all countries with high broadband penetration. In fact, in each of the top 10 countries, the time spent online by users with a broadband connection was substantially greater than the time spent by users with a narrowband connection. (Source: comScore)

Podcast advertising soared to US$80 million in 2006

According to eMarketer, most widely consumed podcasts still have less than 50,000 downloaders. Nevertheless, podcast advertising spending rose to $80 million in 2006, from a mere $3.1 million in 2005. In 2008, eMarketer predicts that this will reach to US240 million and attain US$400 million in revenue by 2011.

One big challenge as well is that podcast listeners is a niche segment as roughly 12% of Internet users do listen to podcast.

Top Ten Trends Among Small and Medium Businesses in 2007

The top ten IT trends for global SMB markets were released by New York-based Access Markets International (AMI) Partners, Inc., a consulting firm specializing in IT, Internet, telecom and business services market intelligence trends and strategy, with a strong focus on global small and medium business (SMB) enterprises.

1. Beyond the Big Four (B4) Emerging BRIC Countries (Brazil, Russia, India and China) — IT Vendors Will Focus On the “Next Ten” (N10) Emerging Markets; SMB spending In North America and Japan Will Surpass Large Business IT Spending In 2007

AMI forecasts the worldwide IT spending by SMBs to grow by 10% in 2007, fueled by continued high double digit growth in countries in the Big Four category. However, IT vendors will step up their efforts to explore the Next Ten (N10) emerging markets, namely selected countries from ASEAN (Thailand, Malaysia, Indonesia, Vietnam, and Philippines), SAARC (Pakistan, Sri Lanka and Bangladesh) and Lat Am (Argentina, and Chile). Collectively, these ten emerging markets are exhibiting GDP growth rates of over 7% and showing SMB IT spending growth rates exceeding 20% in 2007.

• Vietnam and Chile have seen surges in foreign direct investment (FDI), both being increasingly recognized for their manufacturing potential. High adult literacy rates and increasing governmental support will drive the SMB sector.
• SMB IT spending in Indonesia will equal that of Sweden and surpass it in 2008.
• 2007 will also see the fall of the majority share of IT spend by large businesses in Japan and North America.

For the first time, SMB IT spending is poised to surpass spending by large businesses in the two countries as noted above. Such a trend has already occurred in other regions – Asia Pacific, Europe and Lat Am.

2. Storage and Security Convergence Will Help SMBs Move Up The Adoption Curve

Storage and security solutions will continue to converge, leading to market consolidation. SMBs will be more inclined to adopt dual-purpose solutions as they check their budgets against investment priorities. AMI forecasts storage and security spend will grow by 19% in 2007.

• Storage optimization will be seen as an imperative among mid-market businesses.
• 2007 will also see the introduction and adoption of “All-in-One network storage appliances” for the less than 250 employee segment.
• While SMBs are rapidly implementing basic PC security solutions such as anti-virus, spam filters and spyware, many SMBs have yet to deploy more comprehensive server and network-based security schemas that would provide for more robust, end-to-end protection against the rising tide of security threats.
• In 2007 SMBs will direct new spending on more advanced security solutions, such as intrusion detection, secure identity and access management, web filtering, encryption, and automated patch management.
• Vendors that provide SMBs with easy to use vulnerability assessment tools, a choice of software, hardware and services-based security solutions, and the ability to deploy these solutions in an incremental, yet integrated manner, will be best positioned to capitalize on this market opportunity.

3. Software-as-a-Service (SaaS) Vendors Turn to Chapter Two

SaaS Chapter One was all about selling companies on the scale and skill advantages that SaaS provides, helping businesses take advantage of sophisticated solutions while minimizing IT investments, footprints and risks.

In Chapter Two, SaaS vendors will increasingly focus on how their solutions help customers streamline business processes for market advantage. Leading vendors will increasingly provide customers with blueprints for business process improvement, pre-built integration solutions, more varied and flexible pricing options, and ecosystems that facilitate community relationships. By doing so, these vendors will take advantage of the expected 19% rise in global SMB hosted/SaaS spending over the next five years.

Chapter Two will also see a continuation of SaaS industry consolidation, as powerhouses such as Microsoft, Google, IBM and salesforce.com battle to build “uber” SaaS ecosystems. At the same time, new SaaS players and solutions will continue to emerge, and the likelihood of any one player or ecosystem dominating the landscape is slim to none.

4. Managed Services Shape Up—Helping SMBs Manage More With Less

SMBs in mature technology markets are already highly penetrated in terms of PC, Internet, server, security, telecom and mobility solutions. Increasingly, they also struggle with the same IT complexities that larger enterprises face, such as mounting regulatory requirements, more remote and mobile employees, and multiple locations. AMI’s global primary research results indicate that SMBs are increasingly likely to offload cumbersome IT chores to outside experts, so they can focus on their core business.

AMI predicts vendors will offer SMBs more inclusive IT-based managed services packages over the next year. Though initially aimed at testing the waters among early adopter and mid-market businesses, these services will go beyond the piecemeal approach, building towards more comprehensive portfolios.

Historically, most SMBs have turned to smaller, local players for these services, but in 2007, major IT vendors—including IBM, HP and others—will increasingly capitalize on this opportunity. These giants will expand their managed services portfolios with new infrastructure, help desk, storage, security and other offerings, tailored to meet SMB solution, packaging and pricing requirements, and sold via their channel partners.

2007 will also see traditional telecom and cable companies launch initiatives to try and position themselves as key suppliers of managed infrastructure, managed security solutions and web-based services geared to the sub-20 employee segment, where they already have strong market presence with voice, network, and Internet services. All vendors vying for a piece of this growing pie will need to carefully calibrate their SMB offerings, value-add and channel programs to succeed in this quest.

5. Outsourcing Revisited; Incorporation of BaaS

AMI forecasts that the traditional IT services market will continue to see double digit growth in 2007 among global SMBs as an increasing number of businesses spend on different types of services. The IT outsourcing market will get a boost as a direct fallout. IT service vendors in India, China, Philippines, and Russia will continue to reap benefits as mid-market IT outsourcing gains momentum. However, “business-as-a-service” outsourcing will gain ground, with different components of human resources (HR) including recruitment services, background checking, payroll, employee self-service and HR administration leading the way in 2007.

SMBs are continually looking for ways to streamline their business processes and lessen the burdens of regulatory/compliance concerns. With focus on micro-verticals by IT vendors and as IT becomes secondary, AMI predicts that in 2007 and beyond vendors will create micro-vertical offerings for SMBs catering to their specific business processes with “embedded IT.”

6. SMBs will Mobilize – The Road Frequently Traveled

From San Francisco to Singapore, city governments are picking up the tab to provide the public with free or low-cost wireless Internet access. The number of municipally funded Wi-Fi/WiMax projects is soaring, with cities large and small participating. 2007 will see fixed mobile convergence (FMC) between fixed IP infrastructure/applications and mobile (cellular) infrastructure/applications with increased focus on ubiquitous mobility.

AMI predicts that global SMB notebook shipments will grow by 20% in 2007 over 2006, outpacing desktop PC growth by five times. Combined with the SmartPhone shipment growth of 18% globally, SMBs will increasingly depend upon mobility and convergence as the use of public wireless internet will grow by over 30%. The increasing usage of mobility will prove a challenge for telecom providers as they scramble to work with software developers and application providers to design and offer viable solutions for SMBs in order to monetize the adoption of ubiquitous connectivity.

The year will finally see the arrival of WiMax which will take off first in key countries in Asia, followed by Europe and then the US. Fixed WiMAx is already deployed in some parts of Korea (such as WiBro), but 2007 will see more cases of commercial fixed WiMAx being deployed.

7. Vista – 12 to 18 months or More Away for the SMB Hug Factor Due to Industry-Fueled Caution – As You Like It!

Despite all the hype about pent-up demand for Vista, 17% of mid-market businesses, and less than 7% of small businesses in the U.S. plan to adopt Vista in the next 12 months, according to AMI’s U.S. small and medium business survey. The above translates into 447,000 US PC SMBs who have expressed an interest in Vista adoption during 2007. Most SMBs tend to take a wait-and-see attitude when it comes to deploying something new, and in this case, will use extra caution due to concerns generated by the media and industry pundits regarding potential incompatibilities and security loopholes, and uncertainty about the benefits of migrating from their current OS to Vista.

SMBs may be reluctant—even as PC prices dip—to invest in upgrading to new hardware necessary to run Vista. The increasing use of software-as-a-service (SaaS) applications—which require only a web browser—is another factor that may have an impact. However, much will depend on Microsoft’s marketing prowess and the support of the broader ecosystem of partners. After all, there is a pent-up demand for PC replacements and some 40% of PC-owning SMBs would like to standardize their operating systems.

#8: Unified Communications: To Unify Or Not to Unify

AMI predicts that VoIP will begin a long transition from a market-driven attraction of all-in-one VoIP appliances that supports voice/unified messaging/security/mobility with provisions for remote management and desktop/server collaboration application integration.

While the transition will not be complete in 2007, the die has been cast by Office 2007 and MS Exchange which embed unified communications as a feature. Adoption of broadband VoIP applications such as Skype, Yahoo and Vonage will grow rapidly, especially among small SBs (1-4 employees); hosted VoIP adoption will increase among the 5-20 employee segment as these solutions become more reliable, secure and scalable.

Among MBs, there will also be steady growth in enterprise messaging applications such as IBM/Lotus Sametime and Exchange Instant Messaging services as these companies realize the benefits and convenience of real-time communications. AMI forecasts that IP PBX penetration amongst SMBs will grow by 67% in 2007 while penetration in hosted VoIP-based systems will grow by 75%. 2007 will also see the debut of integrated unified communications appliances that integrate voice/data/video/security/mobility for the small business segment.

9: Changing Channels and the Rise of the Value-Added Provider (VAP) – They Came, They Saw, and Now They Would Like to Conquer

The IT channel continues to be in a state of flux, as value-added resellers (VARs) and regional systems integrators (SIs) struggle to adapt to the changing market demands and the evolving business models of IT vendors. While SMBs continue to spend a significant portion of their IT budgets with local and regional VARs, the nature and scope of what they purchase through these providers is changing. With hardware becoming a commodity purchase, and as manufacturers improve direct service and support capabilities, the percentage of direct hardware purchases through retail will continue to rise. Likewise, SMBs are also buying SaaS solutions directly from SaaS vendor putting pressure on VARs and SIs to provide other value-added services to SMBs.

Channel partners will need to invest in building integration and business consulting skills, and to maintain market advantage. In addition, they will need to partner with large manufacturers, such as IBM and HP, who are increasingly “productizing” many basic IT services, and providing partners with opportunities to resell these services and add value around them.

Traditional VARs, DMRs and distributors need to re-examine their offerings and become service providers. AMI predicts that at least the VAR channel will transform itself to a “value-added provider” or VAP moniker, as providers incorporate more value-added integration and infrastructure managed services into their business models. The VAPs will also see a greater percentage of their business coming from the SMB segment.

10. The Battle for the Web-based Operating System Takes Shape—The Storm Gathers Speed

Salesforce.com (Apex and AppExchange) and Amazon (Amazon Web Services) have led the charge to build web-based operating systems and ecosystems, providing developers and customers with access to their technology platforms, infrastructure, tools and knowledge base. As they do so, they are transforming the Internet from an ecosystem to a new computing platform. The Web-based operating system embodies the same core components as traditional operating systems, such as processing power, storage and memory. But, unlike traditional operating systems, the Web-based operating system is comprised of a huge distributed computer network that many users can access virtually. Developers and start-ups will be the early adopters of these Web-based operating systems, using them, in many cases, as an easy, low-cost and dependable foundation on which to develop and deliver new solutions—many of which are likely to be aimed at small business customers. Can Google, IBM and Microsoft be far behind in what may be the most important battle on the Internet? AMI expects these giants—and others—will weigh in and up the ante.

Bonus Prediction: The IT Generation Gap Materializes, Dramatically Changing the Way IT Decisions Are Made

As baby boomers retire and are replaced by younger Gen X workers and entrepreneurs, a significant IT generation gap will emerge and grow, especially in mature technology countries. Younger decision makers, reared on the Internet, video games, MySpace and iPods, will demand business applications that are as easy to use and as flexible as the consumer applications they’ve become accustomed to.

This segment will expect a more “consumerized” business application shopping experience, in which it is easy to access, evaluate and purchase solutions. Younger decision-makers will also demand solutions with minimal training requirements, smaller IT footprints, automatic upgrades and fast ROI. In addition, they will expect their business solutions to enable community participation and allow for personalized, contextualized information access. This dynamic bodes well for vendors who are powering their solutions with next generation, Web 2.0 capabilities, and creating transparent sales, pricing and packaging strategies.

Asia Pacific reaches 1 billion cellular connections

At the end of 2006, Asia-Pacific cellular connections passed the 1 billion mark according to Wireless Intelligence. It has been the third fastest-growing region with a 27% increase year-on-year. In mature markets such as Western Europe and North America, market growth is softening. However, Asia-Pacific reached a 30% penetration rate and is expected to grow by 19% between 2006 and 2007.

India
India overtook China in terms of growth rate in Q1 2007 and will boost the regional figures in the forthcoming quarters running at almost 6 million per month. India grew by 87.4% year-on-year, stealing China's thunder. Six of its 15 local operators are listed in the top 20 fastest growing operators within the region for Q1 2007. This phenomenal growth in India has been driven by efforts from vendors and operators to push down prices and tariffs. This price war and competitive pressure was quoted during the Motorola and Nokia earnings results last quarter.

China
By late 2006 China's growth rate was running at around 18% quarter-on-quarter. It is still leading the way in terms of total connections, with 443 million compared to India's 142 million, but it will take 15 months to gain the next 51 million connections in China and match the growth we saw in 2006. By the end of 2007 China will reach a 38% penetration rate whereas India will just be on its way to 20% penetration.

Bangladesh, Pakistan, Indonesia
Bangladesh, Pakistan and Indonesia have gained strong momentum over the past few quarters with almost 50 million net additions between 2005 and 2006. According to Wireless Intelligence forecasts they are expected to reach market growth of 45%, 42% and 25% respectively by the end of 2007, bringing a total of 43 million net additions for the year.

In Bangladesh, Grameen Phone is expected to stabilize at around a 50% market share during 2007, losing ground to Banglalink (Orascom), which will more than double its subscriber base by December 2007. Pacific Bangladesh, which deployed its cdmaOne and CDMA2000 1x networks in 2005, is likely to reach 1 million connections by the end of 2007, following fairly slow uptake so far. Overall, Bangladesh should reach 29 million subscribers by December this year, giving a market penetration of 18%.

In Pakistan, Mobilink (Orascom) is likely to stabilize at around a 50% market share through this year, to Telenor's advantage - it is expected to grow by 72% year-on-year. Ufone and Warid are also fast growing operators, growing by more than 45% year-on-year and forecast to take share from Mobilink. Millicom is migrating its TDMA network to CDMA2000 1x, although it represents a tiny portion of the total market. By the end of 2007, Pakistan is expected to reach 63.2 million subscribers, reaching a penetration rate of 37%.

In Indonesia, Telkomsel and Indosat are leading the market with 55% and 23% market shares respectively by the end of this year. Both operators are deploying their WCDMA networks in early 2007. Mobile 8 is gaining momentum quarter-on-quarter to reach 5% of the market with its CDMA2000 1x and CDMA2000 1x EV-DO networks, but we forecast that it will slowly be overtaken by WCDMA take-up. By the end of 2007, Indonesia will reach 78.7 million subscribers, with a penetration rate of 34%.

High-speed technology roll-out
A wave of WCDMA network rollouts is expected in most markets by the end of 2007, overtaking the number of CDMA2000 1x EV-DO networks.

In Asia-Pacific ten CDMA2000 1x EV-DO networks, 29 CDMA2000 1x networks, 43 W-CDMA networks, 26 HSDPA networks and 103 GSM networks have been launched commercially. These are cellular networks although there are fixed wireless networks adopting the same.

High-speed networks will gain momentum in most markets by the end of 2007. Wireless Intelligence forecast that WCDMA will reach over 75 million connections in Asia-Pacific by the end of 2007, about 29 million more than in 2006. GSM is going to gain over 184 million connections thanks to fast growth in India, China, Indonesia, Pakistan and Bangladesh.

IP and Ethernet transport and services spending up 36% over last year

Ovum-RHK posted its analysis of global fourth-quarter 2006 service provider switching and routing equipment sales. Revenues in 4Q06 grew to $2.5B overall, up 8 percent from last quarter and up 17 percent compared to one year ago.
"Alcatel and Cisco continue to experience strong growth, even in what is developing into a trend of hard-to-predict fourth-quarter spending. Juniper also experienced some significant growth in the core for the first time since 1Q06," said Mark Seery, Vice President, Switching and Routing, at Ovum-RHK. "Both IP and Ethernet over MPLS continue to grow strongly, driven by NGN transformation and the impact of video."

4Q06 highlights for technology-focused market segments:

• IP/MPLS core = $535 million, up 19 percent versus 4Q05
• IP/MPLS edge = $141 million, up 40 percent versus 4Q05
• IP/Ethernet = $439 million, up 12 percent versus 4Q05

4Q06 highlights for application-focused market segments:

• IP transport and services = $933 million, up 36 percent versus 4Q05
• Ethernet transport and services = $885 million, up 35 percent versus 4Q05
• Subscriber services/BRAS = $232 million, up 5 percent versus 4Q05

Philippine Outsourcing Industry Report

Trade Secretary Peter Favila was quoted, during the E-Services Philippines launching last month, saying that the outsourcing business is projected to rake in $12.4 billion by 2010 after $3.63 billion in 2006.

There are currently 244,675 workers in the country's BPO sector and the number is expected to jump to 920,764 in 2010. Government projections show the Philippine e-services sector will offer 1.3 million jobs from 2006 to 2010. (Visayan Daily Star)

(This post to be regularly updated for further data completion)

Conditional Access in Pay-TV Markets Growing Globally

The strong worldwide growth of digital TV services is driving demand for conditional access (CA) products and technologies, reports In-Stat. At the end of 2006, there were over 175 million households watching digital TV services, the high-tech market research firm says.

While the growth of digital TV households is certainly good news for pay-TV service providers, it also poses an important challenge: How to protect their valuable video content from piracy or illegal usage. This is where CA products are seen as a viable solution as criterias need to be met before content is accessed through digital TV

The research, "Conditional Access in Pay-TV Markets" by In-Stat found the following:

• CA product revenues have been increasing steadily and were projected to reach $937 million at year-end 2006.
• NDS Group plc, is the world's leading CA vendor and currently has 35% of the total worldwide CA market.
• The emerging Telco TV / IPTV market segment is becoming a key proving ground for a number of recent CA technology start-ups companies.
• Worldwide pay-TV industry CA revenues are forecasted to reach $1.5 billion in 2010.

The research also covers conditional access products and technologies in the pay-TV services industry. It discusses why there is a need for conditional access in the pay-TV industry, how it works, and highlights the basic business models in use today. The research also profiles leading CA product vendors, provides current vendor market shares, and discusses key market trends that will shape the CA market in 2007. In addition, it forecasts worldwide revenues for pay-TV CA products through 2010.

U.S. Wireless Industry Report

comScore Networks released a comprehensive report on the behavior and attitudes of wireless phone subscribers. This report is based on a survey of U.S. consumers who use a wireless phone and analyzes consumers’ satisfaction with wireless carriers, carrier switching behavior and usage of wireless features that go beyond voice communication, including wireless Internet.

According to the study, consumers are growing ever more attached to their cell phones, with 14 percent reporting that they no longer subscribe to landline phone service, and 33 percent strongly agreeing they “feel lost” without their cell phone.

Consumer loyalty and satisfaction among wireless subscribers are clearly related. According to the study, only 6 percent of respondents who were highly satisfied with their carriers stated that they were likely to switch carriers at the end of their contract.

In contrast, 76 percent of respondents who were highly dissatisfied with their carrier were likely to switch. Furthermore, 44 percent of the highly dissatisfied respondents were very likely to switch carriers prior to the end of their contract, signifying that the deterrent effect of penalty fees only goes so far.

Not surprisingly, high satisfaction strongly correlates with the likelihood to recommend a carrier to a close friend or family member. Eighty-eight percent of those who were highly satisfied indicated a high probability to recommend their current carrier.

Can You Hear Me Now? “Better Coverage” Primary Reason for Switching Cellular Carriers

Switching to one’s current cellular provider was most often prompted by a desire for improved network coverage, with 27 percent of respondents stating “better coverage” as their primary reason for switching. In fact, coverage was the most often cited reason among subscribers of each carrier, with the exception of T-Mobile customers, who stated “lower prices” as their top reason for switching. Across all subscriber groups, “lower prices” was the second most frequently cited reason for swapping plans (14 percent), followed by switching to a friend/family members’ carrier (13 percent).

Consumers in the 18-to-24 Age Segment View Cell Phones as Multi-Functional Accessories

Based on a survey of U.S. consumers who use a wireless phone, the report also analyzes differences in behavior and attitudes among the following key wireless consumer segments:

• The Cellular Generation – Ages 18 to 24, these young adults grew up with cell phone awareness, experiencing cell phones as a part of their everyday lives.
• Transitioners – Ages 25 to 34, these people fall in between two distinct groups: those who grew up with cell phone knowledge and those who did not. Cell phones began to infiltrate everyday life during their teen years and early adulthood.
• Adult Adopters – Age 35 or older, this group was not exposed to cell phone until adulthood. Adult Adopters tend to have the most functional view of cell phones, with many requiring just the basics and showing limited interest in emerging technologies.

Cell phones offer far more than simply a means of voice communication. They can provide entertainment, convey social status, and express one’s individuality. While consumers in both the Cellular Generation and Transitioners are likely to view their cell phones as multi-dimensional devices, adult adopters tend to have a more functional view.

Approximately one-quarter of both the Cellular Generation (26 percent) and Transitioners (25 percent) said that “trendiness” was of high importance when selecting a cell phone, as compared to just 10 percent of Adult Adopters. Additionally, 41 percent of Cellular Generation consumers strongly agree with the statement “I like my cell phone to be personalized” with options such as color schemes and ring tones, while only 19 percent of Adult Adopters feel the same.

The Cellular Generation clearly places the greatest value on additional features, with 57 percent ranking text messaging of “high importance” when selecting a wireless carrier and 25 percent stating the same for instant messaging, in both cases higher than their more senior counterparts. Forty-two percent of the Cellular Generation said that a camera was of high importance when selecting a wireless phone and 20 percent said the same of an MP3 Player. In comparison, a lower 30 percent of Adult adopters felt that having a camera was of high importance, and just 8 percent felt the same about an MP3 Player.

Transitioners Most Likely to Access the Internet on their Cell Phones

More than three-quarters of both the Cellular Generation and Transitioners have the option to access the Internet on their cell phones, but Transitioners (29 percent) are more likely to subscribe to Internet services than the Cellular Generation (23 percent). Adult adopters have been the slowest to adopt this behavior, with just 13 percent currently subscribing to the Internet on their cell phones while 42 percent either lack, or are unaware of the option of doing so.

Welcome to Market Intelligence Digest!

Hi. This blog intends to update you on the latest market developments happening in the information technology sector and others.