Research house Frost & Sullivan says the growth is being fueled by the growing popularity of video-on-demand and video-sharing
By the end of 2008, the Asia-Pacific region will be home to 171 million broadband subscribers, an increase of 31.5 percent over last year's 129.7 million, according to a new report released Wednesday.
Conducted by research house Frost & Sullivan, the study reported that this growth is driven by increasing popularity of video-on-demand and video sharing, multi-player online games and social networking services such as Facebook and YouTube. Demand is also boosted by operators' aggressive push to deliver multi-play broadband packages, bundled with voice, data, video and wireless services, according to the report, which covers 13 economies in the region including Singapore, South Korea, Japan, Hong Kong and Australia.
"As fixed-line substitution and voice migration to mobile continues, broadband value-added services (VAS) become critical drivers for fixed-line service providers," explained Khoo Yong Lih, senior industry analyst at Frost & Sullivan.
"Operators are as such aggressively promoting attractive bundled and discounted price plans, encouraging migration from narrowband, introducing local content and innovative services such as IPTV (Internet Protocol TV), as well as overall improving service levels and affordability," Khoo said in a media statement.
The Asia-Pacific subscriber base will expand at a compound annual growth rate (CAGR) of 19.9 percent through to 2013, when it is expected to hit 321.8 million, Frost & Sullivan said. Overall broadband revenues for the region clocked in at US$28.1 billion in 2007, and are expected to grow at a 7.1 percent CAGR to US$42 billion by the end of 2013.
The household broadband penetration rate stood at 15.2 percent last year and will expand to 19.7 percent by end-2008, estimated Frost & Sullivan. It is expected to reach 33.7 percent by 2013.
South Korea led the cohort last year with a 90.8 percent penetration rate, followed by Hong Kong and Taiwan at 83.8 percent and 76.8 percent, respectively. India and Indonesia clocked the lowest penetration rates at 1.4 percent and 0.57 percent, respectively.
According to Frost & Sullivan, various government-led nationwide broadband initiatives--particularly in more developed economies--have provided the "impetus for the deployment of wider network infrastructure and coverage". These included efforts to develop local broadband content and applications, helping to boost the adoption of broadband, the research firm added.
In addition, Khoo said a wide range of access technologies such as FTTH (fiber-to-the-home), FTTN (fiber-to-the-node), FTTB (fiber-to-the-building), DSL (digital subscriber line), WiMax and other wireless technologies, would continue to co-exist depending on operator's strategic plans, existing infrastructure and price points in a given economy.
"FTTx in its various forms--FTTH, FTTB, FTTN --would play a significant role in the next three to four years due to its potential of providing greater bandwidth to the premise, compared to copper wires," he explained. "Some countries like Hong Kong, are already providing speeds up to 1 Gbps (gigabits per second), while other countries like Singapore are following suit."
"Deploying fiber as close to the home as possible enables operators to be future-ready for the bandwidth explosion that new services, like multi-screen IPTV with recording, and the concurrent high speed Internet needs," Khoo noted.
However, he said, the profitability of new services such as IPTV remains "questionable" as such deployments typically have long payback periods. He added that in a credit crunch realm, most operators would likely be wary before deciding to deploy FTTH even though it is a "future-proof technology".
"Hence, FTTN would still be a more preferred option for low- to medium-density geographies like Australia and Malaysia," Khoo said. He added that DSL-based services would still drive the bulk of broadband deployments in most developing markets, but would face increasing competition from wireless broadband technologies.