Benchmarking the Asia-Pacific Broadband Divide

Michael MingesSenior Market Analyst

2

References

Designed Digital Access Index

Worked on Digital Opportunity Index

Evaluation of ICT indexes for UN

ITU Asia-Pacific report on broadband

3

Contents

• Update on the ITU Digital Opportunity Index (DOI)

• Benchmarking broadband • The Asian broadband divide

4

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.

5

DOI trends 2000-2007

0.00.10.20.30.40.50.60.70.80.91.0

Kor

ea

Japa

n

Den

mar

k

Sin

gapo

re

Taiw

an

Luxe

mbo

urg

Nor

way

Sw

eden

Net

herla

nds

UK

Icel

and

Aus

tralia

Hon

g K

ong

Mac

ao

N. Z

eala

nd

Can

ada

20002007

1

1

2 3 4 5 6 7 8 9 10

12

0+10

9

21-12

+5 +3 +5 +14 -3 -5 -4 +610 20

11 12 14 15 19

4 3 5 162

18 6 21 198 7-9 +6 -8 +6 0

6

DOI in detailTaiwan

0

25

50

75

100Mobile pop coverage

Internet$ % of GDP

Mobile$ % of GDP

% HH with fixed

% PC HH

% of HH with InternetMobile per 100

Mobile internet per 100

Internet per 100

Fixed broadband ratio

Mobile broadband ratio

Source: Adapted from FIND, NCC, DGBAS.

7

DOI Asia-Pacific

0.00.10.20.30.40.50.60.70.80.91.0

Mya

nmar

Sol

omon

Laos

Cam

bodi

aP

.N, G

uine

aN

epal

Van

uatu

Bhu

tan

Ban

glad

esh

Pak

ista

nV

ietn

amS

amoa

Indi

aM

ongo

liaIn

done

sia

Sri

Lank

aIra

nP

hilip

pine

sFi

jiTo

nga

Thai

land

Chi

naM

aldi

ves

Mal

aysi

aB

rune

iN

. Zea

land

Aus

tralia

Mac

aoH

ong

Kon

gS

inga

pore

Taiw

anJa

pan

Kor

ea

UsageInfrastructureOpportunity

Low

Medium

High

Benchmarking broadband

9

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

10

Broadband penetration OECDDecember 2007, per 100 people

0

5

10

15

20

25

30

35

40

Den

mar

kN

ethe

rland

sIc

elan

dN

orw

ayS

witz

erla

ndFi

nlan

dK

orea

Sw

eden

Luxe

mbo

urg

Can

ada

UK

Bel

gium

Fran

ceG

erm

any

US

AA

ustra

liaJa

pan

Taiw

anA

ustri

aN

. Zea

land

Irela

ndS

pain

Italy

Cze

ch R

ep.

Por

tuga

lH

unga

ryG

reec

eP

olan

dS

lova

k R

ep.

Turk

eyM

exic

o

Source: OECD, NCC.

11

Aspects of broadband

• Different aspects of broadband beyond just penetration

• OECD has identified some but not all

• Fixed versus wireless / mobile broadband

Source: OECD.

12

Broadband penetration

• Even among high income economies, significant difference in basic broadband penetration statistic

• Closer inspection reveals some surprises 18

1920212223242526272829303132

N. Z

eala

nd

Taiw

an

Sin

gapo

re

Japa

n

Aus

tralia

Hon

g K

ong

Kor

ea

181920212223242526272829303132

Broadband subscribers per 100 people, 2007

13

Penetration by sector

40

45

50

55

60

65

70

75

80

New

Zea

land

Aus

tralia

Japa

n

Taiw

an

Hon

g K

ong

Sin

gapo

re

Kor

ea

40

45

50

55

60

65

70

75

80

% households with broadband, 2007

Households with Internet

0102030405060708090

100

Sin

gapo

re

Hon

g K

ong

Aus

tralia

New

Zea

land

Japa

n

Taiw

an

Kor

ea

0102030405060708090100

% businesses with broadband, 2007Businesses with Internet

14

Competition• 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

0

1000

2000

3000

4000

5000

6000

7000

Taiw

an

Aus

tralia

New

Zea

land

Hon

g K

ong

Sin

gapo

re

Japa

n

Kor

ea

0

1000

2000

3000

4000

5000

6000

7000

Technological HHI, 2007

15

Pricing• Wide variety of plans,

coverage & exceptions / restrictions inhibit ability to compare broadband pricing:– Highest speeds not always

universally available– Data or time volume caps in

Australia, Hong Kong (some plans) and New Zealand

• 8 Mbps download is only comparable plan (with 10 GB download)

• Ongoing promotions, bundled offers, etc. make comparisons difficult

$0

$10

$20

$30

$40

$50

$60

$70

$80

Japa

n

Taiw

an

Kor

ea

Sin

gapo

re

New

Zea

land

Hon

g K

ong

Aus

tralia

$0

$10

$20

$30

$40

$50

$60

$70

$80

One month ADSL, 8 Mbps, 10 GB, 2008

16

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

0.1 1 10 100

NewZealand

Taiwan

Australia

Singapore

HongKong

Japan

Korea

Range of mass market broadband plans, Mbps, incumbent operator, 2008

17

3G Mobile

• 3G mobile technology supports broadband speeds

• Indicators:– 3G subscribers as %

of total mobile subscribers

– 3G subscribers per 100 people

• 3G data cards

0%10%20%30%40%50%60%70%80%90%

100%

Hon

g K

ong

New

Zea

land

Taiw

an

Sin

gapo

re

Aus

tralia

Kor

ea

Japa

n

0%10%20%30%40%50%60%70%80%90%100%

3G mobile as % of total, 2007

18

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”

19

Usage example: IPTV

World rank Operator

2007 Subscrib

ers000s

Change

06/07

% broadba

nd subscrib

ers IPTV service3 Hanaro 810 305% 22%  5 PCCW 628 25% 51% .8 CHT 394 58% 11%

9Korea Telecom 325

Launch

2007 5%  

15 HKBN 128 10%52%

 

26 SingTel 27

Launch

2007 6%  Note: excluding Japan.

20

Broadband index resultsAustralia

Hong Kong Japan Korea

New Zealand

Singapore

TaiwanScore 0.40 0.52 0.71 0.79 0.45 0.67 0.63

Overall rank 7 5 2 1 6 3 4Sector 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

The Asia-Pacific broadband digital divide

22

Broadband divide in Asia-Pacific

0

5

10

15

20

25

30

35

$100 $1,000 $10,000 $100,000

GDP per capita, US$, 2006

Bro

adba

nd s

ubsc

riber

s pe

r 100

pe

ople

, 200

7

Low income

6%

High income

43%

China51%

Distribution of

broadband subscribers,

2007

China61%

High income

19%

Low income

20%

Distribution of fixed

telephone lines, 2007

23

Operator 000s

China Telecom 35,650

China Netcom 19,768

NTT (Japan) 12,960

Korea Telecom 6,516

Softbank (Japan) 5,164

Telstra (Australia) 4,598

CHT (Taiwan) 4,243

Hanaro (Korea) 3,658

KDDI (Japan) 2,135

LG Powercom (Korea) 1,721

Operator 000s  %BB 

China Mobile 369,339 0%

China Unicom 162,491 0%

Bharti (India) 55,163 0%

DoCoMo (Japan) 53,150 79%

Telkomsel (Indonesia) 47,890 7%

Reliance (India) 40,960 0%

Vodafone (India) 39,865 0%

BSNL (India) 36,810 0%

Mobilink (Pakistan) 30,613 0%

PLDT (Philippines) 30,041 4%

Top broadband providers versus top mobile providers in Asia

Developing countries Source: Adapted from company reports.

Top 10 broadband operators, 2007 Top 10 mobile operators, 2007

24

Internet in Asia developing economies: Primarily wireless-Philippines example

0 200 400 600 800

IndiaHKG

IndonesiaChina

Philippines

SMS per subscriber per

month2007

Voice45%Data

55%

PLDT 2007Mobile revenue

DSL33%

Dial-up29%

Wire-less38%

PLDT 2007Internet

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.

25

Broadband targets

94 95

9092949698

100

FY05 FY06 FY10

Broadband Zero in Japan: % HH

05

10152025

2005 2007 2010

PlanActual

India BB Policy: BB subscribers (m)

15.5

5075

2007 2008 2010

Actual Plan

Malaysia ICMS Goals: % BB HH

77.1

90

1997 2015

Singapore iN2015: % BB HH

26

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 Authority of India

27

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?

The End

minges@tmgtelecom.com