Research Forecast Report Wireless network traffic in Asia Pacific: forecasts and analysis 2013 2018 December 2013 Rupert Wood
2 About this report This report is based on our Wireless network traffic worldwide: forecasts and analysis 2013 2018, and focuses in more detail on the Asia Pacific region. It presents 5-year forecasts of wireless data traffic in 2 regions and 13 countries. It analyses the key trends in, and drivers and inhibitors of, data traffic. The forecast dataset covers: cellular data data delivered over mobile (cellular) networks to: handsets (typically smartphones); mid-screen devices (typically tablets); USB modems, routers and other standalone data devices; and M2M devices Wi-Fi data data delivered over private Wi-Fi connections (at home or business premises) to handsets and midscreen devices, and data delivered to all devices using public Wi-Fi connectivity. The report assesses the enablers of future capacity on wireless networks. It also analyses the trends in private and public usage, and their effect on the use of cellular and Wi-Fi connectivity. This report is based on Analysys Mason s research and modelling, and consumer surveys on tablet usage. Our forecasts are informed and sense-checked by on-the-ground regional market expertise. Figure 1: Summary of report coverage [Source: Analysys Mason, 2013] Geographical coverage 13 countries are modelled individually: Australia Bangladesh China Hong Kong India Indonesia Japan Malaysia Pakistan Singapore South Korea Taiwan Thailand Major KPIs Cellular data Total volume and average usage for: handsets mid-screen devices USB modems and routers M2M Traffic split by public and private usage Wi-Fi data Total volume and average usage for handsets mid-screen devices, split by mobile-connected and Wi-Fi-only devices laptops (public Wi-Fi connectivity only) Traffic split by public and private usage We have adjusted some figures for the larger economies that were included in our worldwide network traffic forecast published in October 2013. This is because: the added granularity results in adjustments to the rounded-up figures for regions new information has become available.
3 Contents Slide no. 7. Executive summary 8. Developed Asia Pacific growth rates will inevitably slow down 9. Emerging Asia Pacific will have the highest growth rates in the world for cellular data traffic between 2013 and 2018 10. Developed Asia Pacific trends 11. The developed Asia Pacific region has some of the highest cellular data usage levels in the world, but not always the fastest growth 12. Cellular data traffic will grow by a factor of 6.1 between 2013 and 2018 in developed Asia Pacific economies 13. Traffic in developed Asia Pacific economies is dominated by handsets 14. As traffic moves onto 4G, it becomes more asymmetric and more peaky 15. Public Wi-Fi is declining in importance, and social factors continue to limit the use of private Wi-Fi offloading 16. Developed Asia Pacific markets 17. Mobile data traffic growth in Australia will be average for the region and the modem/router segment will continue to be important 18. Hong Kong s cellular data demand continues to be very high, but this may not be sustainable 19. Japan will experience continued strong growth in mobile data traffic, thanks to high potential capacity and a strong substitutive effect 20. Singapore cellular data traffic growth will be limited by tight supply 21. Singapore has high public Wi-Fi usage for the region Slide no. 22. Growth in South Korea s cellular data traffic will be broadly linear for the next 4 years 23. Taiwan may continue to be supply constrained even after the launch of 700MHz LTE 24. Emerging Asia Pacific trends 25. Usage remains broadly correlated to income levels in the emerging economies of the region 26. Cellular data traffic will grow by a factor of 11.4 between 2013 and 2018 in emerging Asia Pacific economies 27. Handsets will dominate cellular data traffic, but less so than in developed Asia Pacific 28. Public Wi-Fi has a major role in the emerging economies, but we forecast that its importance will start to decline towards the end of the decade 29. Emerging Asia Pacific markets 30. The rate of traffic growth in Bangladesh will accelerate as 3G becomes more widely available, but low take-up rates will constrain ARPU 31. Cellular data traffic growth multiples in China will continue to be limited by Wi-Fi 32. China s regulator MIIT has stated that TD-LTE will be the default standard for 4G in China, and is expected to issue licences towards the end of 2013 33. In China, public Wi-Fi has developed in a unique way
4 Contents Slide no. 34. Substitutive mobile broadband will continue to be a significant part of mobile data traffic in India 35. Growth in Indian mobile data traffic is currently very strong 36. Difficulties in refarming spectrum will limit LTE expansion in Indonesia 37. Operator traffic statistics show strong growth in Indonesia, but the case for offloading is clear 38. The rate of traffic growth in Malaysia will be between the emerging and developed Asia Pacific growth rates 39. The rate of cellular data traffic growth in Malaysia will depend on the extent to which FTTx coverage is extended 40. Mobile will provide most basic Internet access needs in Pakistan 41. Thailand has experienced severe supply-side constraints 42. Data sources and methodology 43. Data sources and methodology 44. Data growth will not surpass the constraints of technology, spectrum and infrastructure costs, and is further limited by demand-side complications 45. About the author and Analysys Mason 46. About the author 47. About Analysys Mason 48. Research from Analysys Mason 49. Consulting from Analysys Mason
5 List of figures Figure 1: Summary of report coverage Figure 2: Average monthly cellular data usage per head of population, 2013, and 5-year growth multiple for mobile data traffic, 2013 2018, Asia Pacific Figure 3: 5-year growth multiples for cellular data traffic, by region, 2013 2018 Figure 4: Average monthly cellular data usage per head of population by country, developed Asia Pacific and Sweden, 2013 Figure 5: Cellular data traffic growth rates by country, developed Asia Pacific, 2011 2012 and 2012 2013 Figure 6: Cellular data traffic by country, developed Asia Pacific, 2012 2018 Figure 7: 5-year growth multiples for cellular data traffic by country, developed Asia Pacific, 2013 2018 Figure 8: Cellular data traffic by device type, developed Asia Pacific, 2011 2018 Figure 9: Cellular data traffic by device generation, developed Asia Pacific, 2011 2018 Figure 10: Downlink:uplink ratio in cellular data networks by mobile operator location and network type, 2013 Figure 11: Typical busy-hour data traffic as a percentage of total daily data traffic, 3G-only and mainly 4G operators Figure 12: Handset and connected tablet traffic by network type, developed Asia Pacific, 2011 2018 Figure 13: Cellular data traffic by device type, Australia, 2012 2018 Figure 14: Active mobile SIMs by device type, Australia, 2012 2018 Figure 15: Cellular data traffic by device type, Hong Kong, 2012 2018 Figure 16: Active mobile SIMs by device type, Hong Kong, 2012 2018 Figure 17: Cellular data traffic by device type, Japan, 2012 2018 Figure 18: Active mobile SIMs by device type, Japan, 2012 2018 Figure 19: Mobile data traffic by device type, Singapore, 2012 2018 Figure 20: Active mobile SIMs by device type, Singapore, 2012 2018 Figure 21: Wireless@SG user numbers and hours of usage per user per month, Singapore, 2010 2012 Figure 22: Wireless data traffic by network type, Singapore, 2010 2013 Figure 23: Cellular data traffic by device type, South Korea, 2012 2018 Figure 24: Active mobile SIMs by device type, South Korea, 2012 2018 Figure 25: Cellular data traffic by device type, Taiwan, 2012 2018 Figure 26: Active mobile SIMs by device type, Taiwan, 2012 2018 Figure 27: Average monthly cellular data usage per head of population and GDP per capita (nominal) by country, emerging Asia Pacific, 2013 Figure 28: Cellular data traffic by country, emerging Asia Pacific, 2012 2018 Figure 29: 5-year growth multiples for cellular data traffic by country, emerging Asia Pacific, 2013 2018 Figure 30: Cellular data traffic by device type, emerging Asia Pacific, 2011 2018 Figure 31: Cellular data traffic by device generation, emerging Asia Pacific, 2011 2018 Figure 32: Handset and connected tablet traffic by network type, emerging Asia Pacific, 2011 2018
6 List of figures Figure 33: Cellular data traffic by device type, Bangladesh, 2012 2018 Figure 34: Active mobile SIMs by device type, Bangladesh, 2012 2018 Figure 35: Cellular data traffic by device type, China, 2012 2018 Figure 36: Active mobile SIMs by device type, China, 2012 2018 Figure 37: 4G deployment plans by operator, China Figure 38: China Mobile s wireless data traffic by network type, 2010 2012 Figure 39: Public wireless data by network type, China, 2011 2018 Figure 40: Cellular data traffic by device type, India, 2012 2018 Figure 41: Active mobile SIMs by device type, India, 2012 2018 Figure 42: Cellular data traffic by operator, India, 1Q 2012 4Q 2012 Figure 43: Cellular data traffic by device type, Indonesia, 2012 2018 Figure 44: Active mobile SIMs by device type, Indonesia, 2012 2018 Figure 45: Cellular data traffic by operator, Indonesia, 2010 2012 Figure 46: Cellular data traffic by device type, Malaysia, 2012 2018 Figure 47: Active mobile SIMs by device type, Malaysia, 2012 2018 Figure 48: Operators spectrum holdings by band following allocations in 2012, Malaysia Figure 49: Cellular data traffic by device type, Pakistan, 2012 2018 Figure 50: Active mobile SIMs by device type, Pakistan, 2012 2018 Figure 51: Cellular data traffic by device type, Thailand, 2012 2018 Figure 52: Active mobile SIMs by device type, Thailand, 2012 2018 Figure 53: The dimensions of mobile data network capacity expansion
2012 2013 2014 2015 2016 2017 2018 Active SIMs (million) 2012 2013 2014 2015 2016 2017 2018 Traffic (PB) Wireless network traffic in Asia Pacific: forecasts and analysis 2013 2018 20 Singapore cellular data traffic growth will be limited by tight supply Singapore s three operators all had city-wide HSPA in place before launching LTE in 2011 and 2012. This explains the historically high levels of usage in Singapore. Traffic has not surged since the introduction of LTE, and long-term growth is under 40% per year. The regulator IDA auctioned 270MHz of spectrum in June 2013 150MHz of spectrum in the 1800MHz band and 120MHz in the 2.5GHz band. The rights will not come into use until 2015 for 2.5GHz and 2017 for 1800MHz, and licence holders will be obliged to deliver coverage at street level and on Singapore s public transport network. 40MHz of the 2.5GHz band was set aside for a potential new entrant, but no such bidder emerged. Therefore, Singapore will continue to have three operators for a while yet, which will potentially keep prices high and usage growth subdued. At the time of the auctions, SingTel and StarHub dramatically reduced basic data caps on handset plans from 12GB per month to 1GB or 2GB. Given that mean usage levels on postpaid were higher than 2GB per SIM per month, this is bound to have an impact on cellular network usage levels in the short term. Additional spectrum release, refarmed spectrum and smallcell roll-out should add extra capacity midway through the forecast period. Figure 19: Mobile data traffic by device type, Singapore, 2012 2018 [Source: Analysys Mason, 2013] 400 350 300 250 200 150 100 50 0 3G/4G modem/router 3G/4G mid-screen 4G handset 3G handset Figure 20: Active mobile SIMs by device type, Singapore, 2012 2018 [Source: Analysys Mason, 2013] 10 9 8 7 3G/4G modem/router 6 3G/4G mid-screen 5 4 4G handset 3 3G handset 2 1 2G 0 2G
2011 2012 2013 2014 2015 2016 2017 2018 Percentage of traffic Wireless network traffic in Asia Pacific: forecasts and analysis 2013 2018 28 Public Wi-Fi has a major role in the emerging economies, but we forecast that its importance will start to decline towards the end of the decade Public Wi-Fi has a significant role in some of the emerging Asia Pacific markets. China: China Mobile was forced to use Wi-Fi on a massive scale to subscribers and non-subscribers because some popular handsets were not compatible with its TD-SCDMA network. Other operators do not have the same problems, but have rolled out millions of access points. Indonesia: Some delays in network roll-out and reliability, plus demand-side factors, limit spending on cellular data. Thailand: State-funded roll-out of public Wi-Fi and severe delays in 3G roll-out have limited cellular data usage. However, limited take-up of Wi-Fi-compatible handsets has constrained Wi-Fi s impact. Where fixed infrastructure is poor, public Wi-Fi s share of traffic will be more limited even if the demand-side factors are in place. In some poorer markets, public Wi-Fi may even be backhauled by 3G, although public Wi-Fi can be a significant driver of fixed broadband in these markets too. Major initiatives for public Wi-Fi are underway in some markets. Telkom Indonesia s WiFi.id plan aims to set up 10 million access points across the country by 2015. Google launched the very inexpensive public Wi-Fi service Google Passport for Android users in Indonesia in October 2013. Figure 32: Handset and connected tablet traffic by network type, emerging Asia Pacific, 2011 2018 [Source: Analysys Mason, 2013] 100% 80% 60% 40% 20% 0% Private Wi-Fi Public Wi-Fi Cellular The ICT Ministry in Thailand is co-ordinating a state-funded roll-out of free Wi-Fi at 400 000 access points across urban Thailand by the end of 2014. The network will eventually be operated by TOT and CAT Telecom. In 2012, the Kuala Lumpur authorities made Wi-Fi availability a condition of any restaurant or bar licence in the city. The expansion of capacity through LTE will have the effect of reducing prices to a level that will make recourse to Wi-Fi unnecessary for many handset users. Hence, we would expect its share of traffic to begin to diminish towards the end of the decade.
45 Executive summary Developed Asia Pacific trends Developed Asia Pacific markets Emerging Asia Pacific trends Emerging Asia Pacific markets Data sources and methodology About the author and Analysys Mason
46 About the author Rupert Wood (Principal Analyst) is the lead analyst for Analysys Mason s Fixed Networks research programme. His primary areas of specialisation include next-generation networks, long-term industry strategy and forecasting the dynamics of convergence and substitution across fixed and mobile platforms. Rupert regularly contributes to the international press on a wide range of telecoms subjects and has been quoted by The Times, The Economist, Business Week, Telecommunications Online and La Tribune. Rupert has a PhD from the University of Cambridge, where he was a Lecturer before joining Analysys Mason.
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