ASIA : Asia-Pacific's 3G market, which has largely remained nascent up till 2005, expects to exhibit strong growth on the heels of more advanced 3G markets such as South Korea, Hong Kong, Taiwan and Australia. The large developing markets of China and India expect to contribute significantly to the robust growth of the region's 3G subscriber base after 2008.

Inset is Frost & Sullivan Research Analyst Lenny Koay quoted below.

The price of 3G end-points and uptake of mobile content however remain less encouraging. This, coupled with the fact that most markets in Asia- Pacific are generally price-conscious, may pose as the biggest challenge towards mass-scale adoption of 3G services in the near term.

New analysis from global growth consulting company, Frost & Sullivan, 3G Brewing in Asia Pacific, reveals that the 3G subscriber base -- covering 12 major Asia-Pacific countries ex-Japan -- totaled 15.6 million in 2005, representing a mere 2.3 percent of the total mobile subscribers.

"The 3G revolution is inevitable as urban consumers who are the first adopters of mobile services demand faster speed and greater functionalities on their mobile handsets," says Frost & Sullivan Research Analyst Lenny Koay. "Operators' bid to drive uptake and realize ROI (return on investments) from costly infrastructure deployments will also fuel the 3G phenomenon."

The 3G subscriber base in Asia-Pacific is forecast to grow at CAGR (compound annual growth rate) of 50.1 percent (2005 - 2011) to reach 178 million subscribers by end-2011. "China and India, given their huge populations and economies of scale advantage will account for much of this growth," adds Koay. Both countries expect to introduce 3G services in 2007.

Subscribers of 2G technologies, GSM (global system for mobile communications) and CDMA (code division multiple access), which formed 91.8 percent of total cellular subscribers in 2005, are likely to grow at a more subdued CAGR of 12.3 percent from 2005 to 2011.

"In 2005, mobile data accounted for only 16.4 percent of the total Asia- Pacific cellular revenues," explains Koay. "In markets such as Hong Kong, India, Taiwan and Thailand, the voice segment still reigns, where it commands more than 90 percent of the overall cellular revenues."

Mobile operators need to increase subscribers' data usage to make 3G more relevant to users in Asia-Pacific countries. Creating a pool of data-hungry subscribers will be the operators' first major obstacle; which, if executed successfully, will secure a foothold for 3G standards amidst other competing technologies.

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