2007 South East Asian - Broadband and Internet Markets

This Asia market annual report covers 11 countries in the South East Asia sub-region. It takes an overall look at the various telecoms markets, together with a particular look at the broadband and Internet segments in each of the countries.

The South East Asian countries covered include: Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Timor Leste, and Vietnam.

Of Asia’s estimated 450 million Internet users in early 2007, only about 65 million were to be found in South East Asia. In other words, South East Asia had around 14% of the Internet user population of the region at the time. Despite highly penetrated Internet markets to be found in Singapore, Brunei and Malaysia, South East Asian economies are more generally in the developing phase when it comes to Internet, with user penetrations typically at the lower end of the scale. At the lowest level we find Laos, Cambodia and Myanmar, all with user penetrations of less than 1%.

In terms of broadband access, only Singapore rates as a highly penetrated market (65% of households by early 2007). Despite a flurry of activity in markets like Malaysia and Thailand, South Asia continues to lag well behind the more developed markets of the region in the application and penetration of broadband Internet access.

South East Asian - Internet markets - user penetration and subscribers - 2006

Highlights of the individual South East Asian markets include:

Brunei

The move into Internet has been somewhat cautious, despite the government’s strong support for IT and e-commerce. While Internet usage has risen steadily (43%), broadband penetration remains low (3%). Incumbent JTB’s BruNet offers a DSL-based broadband Internet access service. For the country overview, see chapter 2, page 5.

Cambodia

Internet penetration remains particularly low, with the services on offer being notably expensive in comparison to other countries in the region. In a positive sign, a number of WiFi hotspots have started to appear in Phnom Penh and other locations. Somewhat paradoxically, the regulator has issued a number of WiMAX licences and roll-outs are planned. For the country overview, see chapter 3, page 8.

Indonesia

By early 2007, Indonesia had an estimated 20 million Internet users. This, however, represented only about 9% of the population. Broadband services are still in their infancy, with 300,000 mainly DSL subscribers (just over 0.1% penetration). Problems with inferior telecommunications infrastructure will continue to impede Internet growth. Despite all this, the country is considered to have enormous potential as an online market. For the country overview, see chapter 4, page 11.

Laos

The country’s political structure, the developing economy, a general lack of adequate telecom infrastructure and a low level of PC penetration have all contributed to the slow development of Internet in Laos. ISPs in Laos have initially moved cautiously into offering broadband Internet access. In mid-2003, ETL launched a broadband Internet service based on DSL under a Japanese grant aid project. Lao Telecom then entered the broadband market in early 2004. Planet Online started a wireless broadband service in Vientiane in mid-2005. Broadband subscriber numbers remain low, however. For the country overview, see chapter 5, page 20.

Malaysia

In an effort to become the high tech hub of South East Asia, Malaysia has been continuing to develop its multi-billion dollar Multimedia Super Corridor (MSC) project. So far more than US$5 billion has been invested in this project. The government says that it is meeting targets, with over 1,500 companies already involved. At the same time, however, efforts by the government to encourage the wider community to embrace technology have so far met with limited success. The level of interest in broadband Internet has been surprisingly low and broadband household penetration was just over 11% in early 2007. One bright spot in this market has been WiFi, as the service providers start to rollout hotspots. For the country overview, see chapter 6, page 23.

Myanmar

Internet access continues to be problematic, being severely restricted in its availability to the general public. The fragility of the Internet in Myanmar was highlighted in September 2007, when the military regime shut down the country’s Internet totally in the face of pro-democracy demonstrations. For the country overview, see chapter 7, page 38.

Philippines

Compared with many of its Asian neighbours, the Philippines has been moving slowly on the adoption of Internet. Of the estimated 7% of the population who are Internet users, a growing number (probably around 20%) use a broadband connection to go online. Broadband household penetration, however, remains almost insignificant at around 2%. Future growth in this area will depend on the provision of reliable infrastructure, especially in support of broadband Internet. For the country overview, see chapter 8, page 40.

Singapore

Singapore was the first country in the world to deploy DSL commercially when SingTel launched its service in November 1997. It came as some surprise, therefore, when Singapore was initially slow to move on the large-scale adoption of broadband Internet access. Following a major effort to expand its broadband services, however, the country is now a serious player, with more than 65% of Internet households having broadband access by early 2007. The country has positioned itself well for further development and the adoption of a full range of triple play and Next Generation services. For the country overview, see chapter 9, page 61.

Thailand

While Internet has been popular in Thailand for some years now (user penetration of around 18%), broadband access had been languishing. More recently, however, the number of broadband subscribers has been increasing rapidly. Broadband household penetration, however, remained relatively low at around 3%. Further regulatory reform will no doubt assist the development of Internet in Thailand. For the country overview, see chapter 10, page 88.

Timor Leste

The tiny fledgling nation of Timor Leste (East Timor) has continued to struggle with political instability. Telecommunications remains an important priority under the Ministry of Transport, Communication & Public Works. Following the government’s decision in 2002 to select Portugal Telecom as the lead partner in a consortium to operate Timor Telecom, the operator has set about expanding the countries telecom facilities. Internet access, however, remains limited and expensive. Only one other ISP has been licensed and the incumbent continues to dominate the Internet market. For the country overview, see chapter 11, page 111.

Vietnam

Despite the cautious position adopted by the government on the Internet, this segment of Vietnam’s telecom market has been gaining a strong foothold. Internet user penetration was running at a healthy 17% by early 2007. Boosted by incumbent VNPT’s development of DSL infrastructure, the broadband market finally started to move in 2004; while broadband subscriber numbers grew rapidly in the 2005/06 period, broadband household penetration was still only about 2% in early 2007. For the country overview, see chapter 12, page 112.

Data in this report is the latest available at the time of preparation and may not be for the current year.