 | Issue: | Asia-Pacific I 2006 |
| Article no.: | 10 | |
| Topic: | The Asian user – pushing the limits | |
| Author: | Nick Hutton | |
| Title: | Vice President, Marketing and Communications | |
| Organisation: | Alcatel Asia-Pacific | |
| PDF size: | 52KB |
About author
Nick Hutton is the Vice President of Marketing and Communications for Alcatel Asia-Pacific, based in Shanghai. He is responsible for the overall management of marketing and communication programmes in the Asia-Pacific region. Mr Hutton was formerly Vice President, Asia-Pacific of CommWorks. Prior to his appointment at CommWorks, he was Vice President/General Manager of the Alcatel/Newbridge Networks’ Carrier Data Division for Asia-Pacific. Mr Hutton’s career includes a fifteen-year stint at Apple Computer where he was the Director of Sales and Marketing for Asia based both in Hong Kong and Singapore. Nick Hutton received a degree in Business Management from Oxford Brooks University, in the United Kingdom.
Article abstract
Globalisation, the Internet and mobile phones have put unprecedented power in the hands of the consumer. They want more than greater coverage quality, roaming services and lower tariffs. Asia is highly competitive and, in places, its markets are saturated. Service providers look to new technologies such as WiMax and Next Generation Networks, sales from micro-payment plans for low-income users, as well as enriched services offerings such as music downloads, videos, mobile drama shows and mobile email to open up new revenue streams.
Full Article
Globalisation, the Internet and mobile phones have put unprecedented power in the hands of the consumer. According to a recent article in the Economist, “the ability to get information about whatever you want, whenever you want it, has given consumers unprecedented strength.” Consumers are wielding this newfound power to exert a profound influence on virtually every industry, perhaps none more so than the telecommunications industry where customers are demanding more of their service providers than ever before. Gone are the days when new users could be attracted with promises of enhanced coverage quality, more extensive roaming agreements and favourable voice tariffs. What they expect is a greater diversity in the services available and a richer experience that is based on rapid delivery of multimedia. At the same time they want greater simplicity and more control over how they access those services. This increasing consumer power is having a particularly significant effect in Asia where service providers are stretching the limits of their networks and pushing development of new services and solutions to meet the needs of users across the region. Service providers are at a critical juncture: some of the markets they serve have reached a saturation point or are choked with competition, a condition that results in heightened customer expectations for new services at reduced prices. Other markets are filled with potential customers, but up until now these customers have remained tantalisingly just out of reach. So just what do these customers look like and what steps are Asian service providers taking to meet their needs? “The next billion users” At one end of the spectrum are the more than billion people, mostly concentrated in developing countries, who are underserved from a telecommunications standpoint. Reaching these “next billion users” has become a mantra for many service providers, equipment vendors, and consultants across the Asia-Pacific region. Yet, while it is clear that these massive numbers of underserved people hold great potential, it is less clear how to reach them and how to provide them with solutions that are cost-efficient, attractive, and sustainable. To be sure, these “next billion” are not waiting for service providers to roll out services. Many are taking matters into their own hands. Consider the enterprising fellow who has strapped a computer and WiFi access node to his bicycle and rides through the villages of northeastern Cambodia uploading email over antennas connected to computers in local schools and sending messages in the other direction. You have to admire his initiative, but it is hard to imagine how such a grassroots effort could serve as a tenable solution for millions of people. In response, service providers are moving forward with a number of solutions that they expect will enable them to reach these customers and meet their needs. WiMAX WiMAX, for example, is a powerful radio access solution that offers users broadband wireless access at data rates of multiple Megabits per second and at distances of several kilometres, characteristics that are indispensable for serving people who are dispersed over a wide geographic area where wireline solutions may not be available. Moreover, WiMAX does not require a direct line of sight for transmission, a feature that is particularly effective for serving areas with mountains, forests, and other natural elements that might otherwise act as obstacles. One immediate benefit that WiMAX delivers to users in these areas is access to the Internet. By affording access to new sources of information, WiMAX can be leveraged to support a range of new social and commercial programs. For example, farmers in remote areas, distant from the markets they supply, could use WiMAX as a way to access information about the market prices downstream. With this information in hand they are then in position to negotiate better prices, improve production and enhance their business prospects. In addition to WiMAX, there are other solutions that are coming to the fore: Satellite access Satellites offer a powerful solution for serving those in remote areas because of their ability to offer access over great distance. Recent enhancements in technology have resulted in real two-way broadband communications capability that is ideally suited for those in isolated areas. Satellite technology can also be used to complement other wireless technologies (GSM WiMAX) to provide the most suitable coverage for a diverse range of topographies and demands (see chart). Micropayment In order to accommodate those with limited resources and expand market opportunities, a number of operators have begun to introduce micro-payment options. The micro-payment concept involves the transfer of airtime minutes from a retail merchant or reseller to a prepaid phone customer via SMS. Philippine operator Smart’s micro-recharge scheme (SMARTLoad) serves as a prime example of how an operator can generate sufficiently high margin on relatively low average revenues per user by reducing or eliminating entirely the cost of producing, providing security for and distributing pre-paid scratch-cards. At the other end of the spectrum are users who already enjoy a full range of communications services and are exhibiting a growing appetite for more speed and more mobility. In making demands on service providers to increase speed and increase mobility, it makes little difference to them that what they are asking for defies the laws of physics: that an increase in speed usually comes at the cost of mobility and that an increase in mobility implies decrease in speed. They are convinced that it is possible to have their cake and eat it too and that their service providers will make this happen. A case in point: users in Singapore, Korea, and Japan, countries with high broadband penetration, have become accustomed to high speed access to the Internet and take it for granted that they can download music, view videos, and respond to email in seconds. Now they are expecting the same kind of services to be accessible through their mobile devices and the same level performance to come from the networks that support these services. In Hong Kong, arguably one of the most competitive telecommunications markets in the region, it is already possible to catch a glimpse of what this mobile broadband future in Asia will look like. Take as a sign of things to come, A Sentimental Journey, that was launched by Hong Kong operator CSL in early 2005 and has been hailed as the world’s first 3G “mobile drama”. CSL and other operators are betting that the penchant of Asian customers for television programming will translate into the mobile arena and open up new revenue streams using this medium. Mobile broadcasting Mobile broadcasting – over satellite, mobile network infrastructures or terrestrial TV – is more than just an extension of broadcast TV to mobile terminals. It has implications for the delivery of live video content and customised information services using push and store mechanisms. There is no question that the market in Asia is ripe for such services and customers are eager to have them. Consider these data points: in 2003, 40 mobile operators worldwide offered commercial mobile TV. Today, more than 130 operators provide the service and a large percentage of them are in the Asia-Pacific region. Moreover, by some estimates there will be more than 125 million people watching TV on their phones in less than five years. Next generation networks In those markets where competition is particularly fierce, service providers face increasing pressure to introduce new services while minimising their costs. The result: customers have become accustomed to getting more for less. In response, service providers are revamping their networks to keep up. The so-called Next Generation Networks (NGN) they are implementing have IP technology at their core, make use of standard IT platforms, and can be upgraded rapidly through software changes. What makes these NGNs particularly attractive is that they enable operators to achieve, by some estimates, as much as a 30 per cent savings in capital expense and up to 50 per cent savings in operational expense. The significant cost reductions associated with NGNs derive from a relatively low-maintenance requirement, use of space-efficient media gateways, and localised call switching that reduces the need to maintain expensive, high capacity network backbones. Grasping the inherent benefits associated with a Next Generation Network, Telecom New Zealand invested early on in an NGN to be able to introduce new, integrated, solutions and deliver them at a lower cost than competitors could. Similarly, TA Orange in Thailand deployed a mobile NGN solution to optimise costs in providing new multimedia services to some 3.6 million users, and to establish a clear future evolution path to a network that would combine both fixed and mobile elements into a single, integrated whole. The Asia-Pacific region is in the midst of tremendous change on all levels – political, social and economic – and the individuals who inhabit the region are changing as well. Whether they are located in densely populated metropolises or isolated rural areas, the needs and expectations of these individuals are having a profound impact on the strategies of telecommunications service providers from the networks they maintain to the services they provide.
