Benchmarking the Asia-Pacific Broadband Divide Michael Minges Senior Market Analyst
References Designed Digital Access Index Worked on Digital Opportunity Index Evaluation of ICT indexes for UN ITU Asia-Pacific report on broadband
2
Contents • Update on the ITU Digital Opportunity Index (DOI) • Benchmarking broadband • The Asian broadband divide
3
ITU Digital Opportunity Index (DOI) • What is Digital Opportunity? – The whole population having easy access to Information and Communication Technologies (ICTs) at affordable prices; – All homes equipped with ICT devices; – All citizens having mobile ICT devices; and – Everyone using broadband.
4
DOI trends 2000-2007 1.0
12
8
5
+3
+5
7
10
7
8
9
10
11 12
+14 -3
-5
-4
-9
3
5
+6
6 20
4
2
16
14 15 -8
+6
6
18
19 21 -12
+6
0
21
19
9
Canada
0.5 0.4
+10 +5
4
N. Zealand
1
3
Macao
0
2
Hong Kong
Australia
Iceland
Norway
Luxembourg
Taiwan
Singapore
Denmark
Japan
Korea
0.1 0.0
UK
2000 2007
0.3 0.2
Netherlands
0.7 0.6
1
Sweden
0.9 0.8
5
DOI in detail Taiwan Mobile pop coverage
100
Mobile broadband ratio
Fixed broadband ratio
75 50
Internet$ % of GDP
Mobile$ % of GDP
25 0 Internet per 100
Mobile internet per 100 Mobile per 100
% HH with fixed
% PC HH % of HH with Internet
6 Source: Adapted from FIND, NCC, DGBAS.
1.0 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0 Myanmar Solomon Laos Cambodia P.N, Guinea Nepal Vanuatu Bhutan Bangladesh Pakistan Vietnam Samoa India Mongolia Indonesia Sri Lanka Iran Philippines Fiji Tonga Thailand China Maldives Malaysia Brunei N. Zealand Australia Macao Hong Kong Singapore Taiwan Japan Korea
DOI Asia-Pacific
Usage
Infrastructure
Opportunity
High
Medium
Low
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Benchmarking broadband
Importance of broadband •
“Highspeed broadband, which a few years ago was considered a luxury is today a necessary part of the industrial, commercial and lifestyle landscapes.” –Government of Malaysia • “Recognising the potential of ubiquitous Broadband service in growth of GDP and enhancement in quality of life through societal applications including tele-education, tele-medicine, e-governance, entertainment as well as employment generation...” —Government of India • “Broadband not only plays a critical role in the workings of the economy, it connects consumers, businesses, governments and facilitates social interaction.”—OECD
9
0 Denmark Netherlands Iceland Norway Switzerland Finland Korea Sweden Luxembourg Canada UK Belgium France Germany USA Australia Japan Taiwan Austria N. Zealand Ireland Spain Italy Czech Rep. Portugal Hungary Greece Poland Slovak Rep. Turkey Mexico
Broadband penetration OECD December 2007, per 100 people
40
35
30
25
20
15
10
5
Source: OECD, NCC. 10
Aspects of broadband • Different aspects of broadband beyond just penetration • OECD has identified some but not all • Fixed versus wireless / mobile broadband Source: OECD. 11
Broadband penetration Broadband subscribers per 100
12
32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 Korea
Hong Kong
Australia
Japan
Singapore
Taiwan
32 31 30 29 28 27 26 25 24 23 22 21 20 19 18 N. Zealand
• Even among high income economies, significant difference in basic broadband penetration statistic • Closer inspection reveals some surprises
people, 2007
Penetration by sector
45
45
40
40
13
Korea
50
Taiwan
50
100 90 80 70 60 50 40 30 20 10 0 Japan
55
Korea
55
Singapore
60
Hong Kong
60
Taiwan
65
Japan
65
Australia
70
New Zealand
70
New Zealand
75
100 Businesses 90 with Internet 80 70 60 50 40 30 20 10 0 Australia
75
80
Households with Internet
Hong Kong
80
% businesses with broadband, 2007
Singapore
% households with broadband, 2007
Competition Technological HHI, 2007
6000
6000
5000
5000
4000
4000
3000
3000
2000
2000
1000
1000
14
Korea
Japan
0 Singapore
Australia
0
Hong Kong
7000
New Zealand
7000
Taiwan
• A more competitive broadband market, including a variety of technologies, tends to result in higher broadband penetration • Competition can be measured by both technology and operators
Pricing One month ADSL, 8 Mbps, 10 GB, 2008
$60
$50
$50
$40
$40
$30
$30
$20
$20
$10
$10
$0
$0
15
Australia
$60
Hong Kong
$70
New Zealand
8 Mbps download is only comparable plan (with 10 GB download) • Ongoing promotions, bundled offers, etc. make comparisons difficult
$70
Singapore
•
$80
Korea
– Highest speeds not always universally available – Data or time volume caps in Australia, Hong Kong (some plans) and New Zealand
$80
Taiwan
Wide variety of plans, coverage & exceptions / restrictions inhibit ability to compare broadband pricing:
Japan
•
Speed • Composite measure of speed in use desirable but comparable data not available: – Australia: 30% < 512 kbps; 3%> 24 Mbps – Hong Kong: Over 60% of customers using > 25 Mbps (HKBN) – Japan: 40% fiber optic – Taiwan: Average download speed 3.56 Mbps (CHT)
• Fall back on broadband as % of Internet in homes
Range of mass market broadband plans, Mbps, incumbent operator, 2008 Korea Japan Hong Kong Singapore Australia Taiwan New Zealand 0.1
1
16
10
100
3G Mobile
17
Japan
Korea
Australia
Singapore
• 3G data cards
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Taiwan
– 3G subscribers as % of total mobile subscribers – 3G subscribers per 100 people
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
New Zealand
• 3G mobile technology supports broadband speeds • Indicators:
Hong Kong
3G mobile as % of total, 2007
Coverage • Definitions vary: number of lines upgraded, population covered or households which could subscribe: – Australia: 81% DSL coverage – Korea: 100% DSL coverage – Japan: 95% households have one or more broadband service; 84% have “ultra-high speed” broadband coverage – Hong Kong: Fiber available to 2/3 of households – New Zealand: 93% DSL coverage – Singapore: Singtel has island wide DSL coverage – Taiwan: “Substantially all installed telephone lines capable of delivering ADSL services”
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Usage example: IPTV 2007 Subscribe rs 000s
Chang e 06/07
3 Hanaro
810
305%
22%
5 PCCW
628
25%
51% .
8 CHT
394
58%
11%
325
Launch 2007
World rank
Operator
Korea 9 Telecom
% broadband subscribe rs
IPTV service
5% 52%
15 HKBN 26 SingTel
128
10%
27
Launch 2007
6%
Note: excluding Japan.
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Broadband index results Australia Score
0.40
Hong Kong 0.52
Japan 0.71
Korea 0.79
New Zealand
Singapore
0.45
0.67
Taiwan 0.63
Overall rank
7
5
2
1
6
3
4
Sector use
7
4
5
1
6
3
2
Competition
6
4
2
1
5
3
7
Price
7
6
1
3
5
4
2
Home speed
5
1
6
1
7
4
3
Mobile
4
7
1
2
6
3
5
Penetration rank
3
2
4
1
7
5
6
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The Asia-Pacific broadband digital divide
Broadband divide in Asia-Pacific Broadband subscribers per 100 people, 2007
35
China 51%
30 25
High income 43%
20 15
Low income 6%
10
0 $100
Distribution of fixed telephone lines, 2007
China 61%
5
$1,000
$10,000 $100,00 0
GDP per capita, US$, 2006
Distribution of broadband subscribers, 2007
Low High income income 20% 19%
22
Top broadband providers versus top mobile providers in Asia Top 10 broadband operators, 2007
Top 10 mobile operators, 2007
Operator
000s
Operator
000sÂ
%BBÂ
China Telecom
35,650
China Mobile
369,339
0%
China Netcom
19,768
China Unicom
162,491
0%
NTT (Japan)
12,960
Bharti (India)
55,163
0%
Korea Telecom
6,516
DoCoMo (Japan)
53,150
79%
Softbank (Japan)
5,164
Telkomsel (Indonesia)
47,890
7%
Telstra (Australia)
4,598
Reliance (India)
40,960
0%
CHT (Taiwan)
4,243
Vodafone (India)
39,865
0%
Hanaro (Korea)
3,658
BSNL (India)
36,810
0%
KDDI (Japan)
2,135
Mobilink (Pakistan)
30,613
0%
LG Powercom (Korea)
1,721
PLDT (Philippines)
30,041
4%
Developing countries
Source: Adapted from company reports. 23
Internet in Asia developing economies: Primarily wireless-Philippines example Philippines China Indonesia
PLDT 2007 Mobile revenue
SMS per subscriber per month 2007
HKG India
0
Wireless 38%
200
400
Dial-up 29% DSL 33%
600
Voice Data 45% 55% 800
PLDT 2007 Internet subscribers
• domestic and international remittances • utility bills • insurance premiums • school tuition fees • micro tax payments • electronic loads and pins • online purchases • ferry, airline & train tickets
Source: Adapted from PLDT, Globe.
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Broadband targets Broadband Zero in Japan: % HH
100 98 96 94 92 90
Malaysia ICMS Goals: % BB HH Actual
94
75
Plan
50
95 15.5
FY05
FY06
FY10
India BB Policy: BB subscribers (m) 25 20 Plan 15 Actual 10 5 0 2005 2007 2010
2007
2008
2010
Singapore iN2015: % BB HH
90 77.1
1997
2015 25
Broadband recommendations • Encourage franchising • Certify Customer Premises Equipment & announce broadband plans to encourage manufacturing of CPEs • Expedite mechanism for spectrum • Streamlining and sharing Rights of Way • Encourage broadband via broadcast technology • Universal Service fund for providing broadband in underserved areas and to subsidize backhaul charges • Make Multiple Dwelling Unit buildings broadband ready
Adapted from Telecom Regulatory Authority26of India
Conclusions • Big broadband divide in Asia region • Numerous barriers including income, geography, literacy, policy and competition • Competition: intra- and inter-modal and fixed broadband versus mobile broadband • Mobile and “Internet-like” use in developing countries • How much broadband is enough? 27
The End minges@tmgtelecom.com