Emerging Asia Pacific telecoms market: trends and forecasts 2017 based on 3Q 2017 data REGIONAL FORECAST REPORT EMERGING ASIA PACIFIC TELECOMS MARKET: TRENDS AND FORECASTS 2017 BASED ON 3Q 2017 DATA SIMON LUMB APRIL 2018
Emerging Asia Pacific telecoms market: trends and forecasts 2017 based on 3Q 2017 data About this report This report provides: a 5-year forecast of more than 180 mobile and fixed KPIs for the EMAP region as a whole and for 6 key countries an in-depth analysis of the trends, drivers and forecast assumptions for each type of mobile and fixed service, and for key countries an overview of operator strategies and country-specific topics, in order to highlight similarities and differences by means of a cross-country comparison a summary of results, key implications and recommendations for mobile and fixed operators. Our forecasts are informed by on-the-ground regional market experts from our topic-led research programmes and our consulting division, as well as external interviews. In addition to our robust set of historical data, our forecasts draw on a unique and in-house modelling tool, which applies a rigorous methodology (reconciliation of different sources, standard definitions, top-down and bottom-up modelling). For the complete data set, see the accompanying Excel file at www.analysysmason.com/emap-telecoms-forecast-rdrp0. Geographical Regions modelled: Emerging Asia Pacific (EMAP) Countries modelled individually Bangladesh Cambodia China India Indonesia Malaysia Myanmar Nepal Pakistan Philippines Sri Lanka Thailand Vietnam REPORT COVERAGE Key performance indicators Connections Mobile Handset, mobile broadband, 1 IoT 2 Prepaid, contract 2G, 3G, 4G, 5G Smartphone, non-smartphone Fixed Voice, broadband, IPTV, dial-up Narrowband voice, VoBB DSL, FTTP/B, cable, BFWA, 5G, other Voice traffic Fixed and mobile Outgoing minutes, MoU Revenue Mobile Service, 3 retail Prepaid, contract Handset, mobile broadband, 1 IoT 2 Handset voice, messaging, data Fixed Service, 3 retail Voice, broadband, IPTV, dial-up, business services DSL, FTTP/B, cable, BFWA, other ARPU Mobile: SIMs, handset Prepaid, contract Handset voice, data 1 Includes USB modem, and mid- and large-screen, but not handset-based data. 2 IoT connections and revenue figures include mobile services only. 3 Service revenue is the sum of retail and wholesale revenue. 2
Emerging Asia Pacific telecoms market: trends and forecasts 2017 based on 3Q 2017 data Contents [1] 9. Executive summary 10. Telecoms retail revenue for EMAP will increase over the forecast period, but the CAGR will fall from 5.1% (2012 2016) to 3.4% (2016 ) 11. Retail revenue across the EMAP region will increase, with no countries in the region experiencing revenue decline over the period 12. Geographical coverage: most countries will see substantial technological development of fixed and mobile networks 13. Key trends, drivers and assumptions for the mobile and fixed markets 14. Key recommendations for telecoms operators 15. Regional forecasts and cross-country comparison 16. Market context: telecoms service revenue in EMAP reached USD280 billion in 2016 (1.7% of total GDP); China contributed more than half 17. Key mergers, acquisitions and market entries 18. Key drivers at a glance for each emerging Asia Pacific market 19. Market overview: the total telecoms service revenue will increase over the forecast period, reaching USD328 billion in 20. Mobile: the amount of data traffic will increase dramatically over the forecast period with a CAGR of 61% 21. Mobile: Malaysia and Cambodia will be the only countries in the region with declining mobile penetration 22. Mobile: in most markets, competitive price pressure will outweigh data monetisation resulting in a decrease in the regional ARPU 23. Mobile: the markets in EMAP are at varying stages of development, but most operators will focus on data monetisation over the forecast period 24. Fixed: FTTP/B will account for 87.8% of fixed broadband connections in 25. Fixed: China leads the way in broadband penetration thanks to substantial government-backed investment 26. Fixed: the broadband ASPU will decrease at an average rate of 2.6% per year as operators lower prices to attract mass-market customers 27. Fixed: increased fibre coverage and affordability will drive broadband penetration over the forecast period 28. Business services: operators will benefit from increasing other business services revenue 29. IoT: total revenue from the IoT value chain will grow to almost USD40 billion by 30. Pay TV: strong growth in IPTV and satellite services will be at the expense of cable 31. Individual country forecasts 32. China: total service revenue will increase, driven by growth in mobile data ARPU and fixed broadband penetration 33. China: almost all mobile connections will be 4G/5G; this will increase mobile data usage and stabilise mobile ARPU 34. China: network investment has resulted in one of the most developed telecoms markets in the world 35. China: forecast changes 36. Indonesia: the overall revenue will peak in 2019 and then decrease as a result of the level of competition in the market 3
Emerging Asia Pacific telecoms market: trends and forecasts 2017 based on 3Q 2017 data Contents [2] 37. Indonesia: FTTP/B has become the fixed broadband technology with the highest share of connections 38. Indonesia: declining mobile ARPU will limit overall telecoms revenue growth, despite the scope for growth for fixed broadband 39. Indonesia: forecast changes 40. Malaysia: telecoms revenue will remain approximately constant at around MYR31 billion over the forecast period 41. Malaysia: the average mobile data usage per connection will increase at a CAGR of 60.6%, and will be the highest in EMAP 42. Malaysia: potential market consolidation should keep the ARPU stable, despite a saturated mobile market 43. Malaysia: forecast changes 44. Philippines: mobile handset service revenue will decrease over the forecast period, but the overall revenue will increase 45. Philippines: prohibitive pricing will deter consumers from taking postpaid subscriptions, despite the mobile data usage growth 46. Philippines: the eventual entry of the third mobile operator will shake up the Philippine telecoms market 47. Philippines: forecast changes 48. Thailand: total fixed and mobile telecoms service revenue will peak at THB394 billion in 2020 49. Thailand: market competition will cause mobile and fixed broadband ASPU to decrease over the forecast period 50. Thailand: network improvement will result in one of the most technologically developed telecoms markets in EMAP 51. Thailand: forecast changes 52. Vietnam: extensive FTTP deployments will result in a fixed broadband retail CAGR of 12.9% over the forecast period 53. Vietnam: the volume of mobile data traffic per connection remains the lowest in the EMAP region 54. Vietnam: operators fibre roll-outs will result in Vietnam being the only EMAP nation (other than China) to be 100% NGA in 55. Vietnam: forecast changes 56. Methodology 57. Our forecast model is supported by sound market knowledge 58. Examples of forecast input drivers 59. Key drivers at a glance table: methodology [1] 60. Key drivers at a glance table: methodology [2] 61. About the author and Analysys Mason 62. About the author 63. About Analysys Mason 64. Research from Analysys Mason 65. Consulting from Analysys Mason 4
Emerging Asia Pacific telecoms market: trends and forecasts 2017 based on 3Q 2017 data List of figures [1] Figure 1: Telecoms and pay-tv retail revenue by service type and total service revenue, emerging Asia Pacific, 2012 Figure 2: Telecoms retail revenue and nominal GDP growth by country, emerging Asia Pacific, 2016 Figure 3: 4G/5G share of mobile connections and NGA share of fixed broadband connections by country, emerging Asia Pacific, 2016 and Figure 4: Summary of key trends, drivers and assumptions for emerging Asia Pacific Figure 5: Metrics for the 13 countries modelled individually in emerging Asia Pacific, 2016 Figure 6: Recent and upcoming market structure changes in emerging Asia Pacific Figure 7: Major forecast drivers: current situation (2016) and future trajectory (2017 ), by country, emerging Asia Pacific Figure 8: Total fixed and mobile telecoms service revenue, emerging Asia Pacific (USD billion), 2012 Figure 9: Mobile connections by type, emerging Asia Pacific (million), 2012 Figure 10: Telecoms retail revenue and growth rate by service type, emerging Asia Pacific, 2012 Figure 11: Fixed connections by type, emerging Asia Pacific (million), 2012 Figure 12: Mobile connections by generation, emerging Asia Pacific (million), 2012 Figure 13: Mobile ARPU by type, emerging Asia Pacific (USD per month), 2012 Figure 14: Contract share of mobile connections (excluding IoT), emerging Asia Pacific, 2012 Figure 15: Mobile data traffic per connection, emerging Asia Pacific (MB per month), 2012 Figure 16a: Mobile penetration by country, emerging Asia Pacific, 2012 Figure 16b: Mobile penetration by country, emerging Asia Pacific, 2012 Figure 17a: Mobile ARPU by country, emerging Asia Pacific, 2012 Figure 17b: Mobile ARPU by country, emerging Asia Pacific, 2012 Figure 18: Broadband connections by technology, emerging Asia Pacific (million), 2012 Figure 19: Fixed retail revenue by service, emerging Asia Pacific (USD billion), 2012 Figure 20: NGA broadband household penetration and NGA share of broadband connections, emerging Asia Pacific, 2012 Figure 21: Fixed Internet traffic per broadband connection, emerging Asia Pacific (GB per month), 2012 Figure 22a: Fixed broadband household penetration by country, emerging Asia Pacific, 2012 Figure 22b: Fixed broadband household penetration by country, emerging Asia Pacific, 2012 Figure 23a: Fixed broadband access ASPU by country, emerging Asia Pacific, 2012 5
Emerging Asia Pacific telecoms market: trends and forecasts 2017 based on 3Q 2017 data List of figures [2] Figure 23b: Fixed broadband access ASPU by country, emerging Asia Pacific, 2012 Figure 24: Total market revenue from business services, emerging Asia Pacific, 2012 Figure 25: Total IoT value chain revenue by sector, emerging Asia Pacific, 2013 Figure 26: Retail revenue from pay TV, emerging Asia Pacific, 2013 Figure 27: Total fixed and mobile telecoms service revenue, China (CNY trillion), 2012 Figure 28: Mobile connections by type, China (billion), 2012 Figure 29: Telecoms retail revenue and growth rate by service type, China, 2012 Figure 30: Fixed connections by type, China (million), 2012 Figure 31: 4G, 5G and contract share of mobile connections, China, 2012 Figure 32: Mobile ARPU, fixed voice ASPU and fixed broadband ASPU, China (CNY per month), 2012 Figure 33: Mobile data traffic per connection, China (MB per month), 2012 Figure 34: Broadband connections by technology, China (million), 2012 Figure 35: Total telecoms service revenue current and previous forecasts, China, 2012 Figure 36: Total fixed and mobile telecoms service revenue, Indonesia (IDR trillion), 2012 Figure 37: Mobile connections by type, Indonesia (million), 2012 Figure 38: Telecoms retail revenue and growth rate by service type, Indonesia, 2012 Figure 39: Fixed connections by type, Indonesia (million), 2012 Figure 40: 4G and contract share of mobile connections, Indonesia, 2012 Figure 41: Mobile ARPU, fixed voice ASPU and fixed broadband ASPU, Indonesia (IDR thousand per month), 2012 Figure 42: Mobile data traffic per connection, Indonesia (MB per month), 2012 Figure 43: Broadband connections by technology, Indonesia (million), 2012 Figure 44: Total telecoms service revenue current and previous forecasts, Indonesia, 2012 Figure 45: Total fixed and mobile telecoms service revenue, Malaysia (MYR billion), 2012 Figure 46: Mobile connections by type, Malaysia (million), 2012 Figure 47: Telecoms retail revenue and growth rate by service type, Malaysia, 2012 Figure 48: Fixed connections by type, Malaysia (million), 2012 6
Emerging Asia Pacific telecoms market: trends and forecasts 2017 based on 3Q 2017 data List of figures [3] Figure 49: 4G, 5G and contract share of mobile connections, Malaysia, 2012 Figure 50: Mobile ARPU, fixed voice ASPU and fixed broadband ASPU, Malaysia (MYR per month), 2012 Figure 51: Mobile data traffic per connection, Malaysia (MB per month), 2012 Figure 52: Broadband connections by technology, Malaysia (million), 2012 Figure 53: Total telecoms service revenue current and previous forecasts, Malaysia, 2012 Figure 54: Total fixed and mobile telecoms service revenue, Philippines (PHP billion), 2012 Figure 55: Mobile connections by type, Philippines (million), 2012 Figure 56: Telecoms retail revenue and growth rate by service type, Philippines, 2012 Figure 57: Fixed connections by type, Philippines (million), 2012 Figure 58: 4G and contract share of mobile connections, Philippines, 2012 Figure 59: Mobile ARPU, fixed voice ASPU and fixed broadband ASPU, Philippines (PHP per month), 2012 Figure 60: Mobile data traffic per connection, Philippines (MB per month), 2012 Figure 61: Broadband connections by technology, Philippines (million), 2012 Figure 62: Total telecoms service revenue current and previous forecasts, Philippines, 2012 Figure 63: Total fixed and mobile telecoms service revenue, Thailand (THB billion), 2012 Figure 64: Mobile connections by type, Thailand (million), 2012 Figure 65: Telecoms retail revenue and growth rate by service type, Thailand, 2012 Figure 66: Fixed connections by type, Thailand (million), 2012 Figure 67: 4G, 5G and contract share of mobile connections, Thailand, 2012 Figure 68: Mobile ARPU, fixed voice ASPU and fixed broadband ASPU, Thailand (THB per month), 2012 Figure 69: Mobile data traffic per connection, Thailand (MB per month), 2012 Figure 70: Broadband connections by technology, Thailand (million), 2012 Figure 71: Total telecoms service revenue current and previous forecasts, Thailand, 2012 Figure 72: Total fixed and mobile telecoms service revenue, Vietnam (VND trillion), 2012 Figure 73: Mobile connections by type, Vietnam (million), 2012 Figure 74: Telecoms retail revenue and growth rate by service type, Vietnam, 2012 Figure 75: Fixed connections by type, Vietnam (million), 2012 7
Emerging Asia Pacific telecoms market: trends and forecasts 2017 based on 3Q 2017 data List of figures [4] Figure 76: 4G and contract share of mobile connections, Vietnam, 2012 Figure 77: Mobile ARPU, fixed voice ASPU and fixed broadband ASPU, Vietnam (VND thousand per month), 2012 Figure 78: Mobile data traffic per connection, Vietnam (MB per month), 2012 Figure 79: Broadband connections by technology, Vietnam (million), 2012 Figure 80: Total telecoms service revenue current and previous forecasts, Vietnam, 2012 Figure 81a: Methodology for attributing scores to each element in the key drivers table (current and future) and impact of high scores Figure 81b: Methodology for attributing scores to each element in the key drivers table (current and future) and impact of high scores 8
Emerging Asia Pacific telecoms market: trends and forecasts 2017 based on 3Q 2017 data Geographical coverage: most countries will see substantial technological development of fixed and mobile networks Figure 3: 4G/5G share of mobile connections and NGA share of fixed broadband connections by country, emerging Asia Pacific, 2016 and 1 CHINA INDIA INDONE SIA MALAYSIA MYANMAR CAMBODIA NEPAL BANGLADE SH 9 PAKISTAN 6 KEY 4G/5G share in 2016 4G/5G share in VIE TNAM THAILAND SRI LANKA PHILIPPINE S NGA share in 2016 NGA share in Source: Analysys Mason 1 For a full list of countries modelled as part of the emerging Asia Pacific region, please see the accompanying data annex. Mobile connections exclude IoT connections. NGA share of fixed broadband connections is calculated as cable, VDSL and FTTP/B connections (that provide access speeds of 30Mbps or more) divided by the total number of fixed broadband connections. 12
Emerging Asia Pacific telecoms market: trends and forecasts 2017 based on 3Q 2017 data CONTENTS EXECUTIVE SUMMARY REGIONAL FORECASTS AND CROSS-COUNTRY COMPARISON INDIVIDUAL COUNTRY FORECASTS METHODOLOGY ABOUT THE AUTHOR AND ANALYSYS MASON 61
Emerging Asia Pacific telecoms market: trends and forecasts 2017 based on 3Q 2017 data About the author Simon Lumb (Research Analyst) is a member of the regional markets research team in London, contributing primarily to the Telecoms Market Matrix, European Core Forecasts, European Country Reports and Global Core Data research programmes. Simon holds a BSc in Physics from Durham University, and during his studies conducted research on the collision of galaxies and helped to develop a GPS tracking system for a start-up company. 62
Emerging Asia Pacific telecoms market: trends and forecasts 2017 based on 3Q 2017 data Analysys Mason s consulting and research are uniquely positioned Analysys Mason s consulting services and research portfolio CONSULTING We deliver tangible benefits to clients across the telecoms industry: communications and digital service providers, vendors, financial and strategic investors, private equity and infrastructure funds, governments, regulators, broadcasters, and service and content providers. Our sector specialists understand the distinct local challenges facing clients, in addition to the wider effects of global forces. We are future-focused and help clients understand the challenges and opportunities that new technology brings. RESEARCH Our dedicated team of analysts track and forecast the different services accessed by consumers and enterprises. We offer detailed insight into the software, infrastructure and technology delivering those services. Clients benefit from regular and timely intelligence, and direct access to analysts. 63
Emerging Asia Pacific telecoms market: trends and forecasts 2017 based on 3Q 2017 data Research from Analysys Mason 64
Emerging Asia Pacific telecoms market: trends and forecasts 2017 based on 3Q 2017 data Consulting from Analysys Mason 65
Emerging Asia Pacific telecoms market: trends and forecasts 2017 based on 3Q 2017 data PUBLISHED BY ANALYSYS MASON LIMITED IN APRIL 2018 Bush House North West Wing Aldwych London WC2B 4PJ UK Tel: +44 (0)20 7395 9000 Email: research@analysysmason.com www.analysysmason.com/research Registered in England No. 5177472. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher. Figures and projections contained in this report are based on publicly available information only and are produced by the Research Division of Analysys Mason Limited independently of any client-specific work within Analysys Mason Limited. The opinions expressed are those of the stated authors only. Analysys Mason Limited recognises that many terms appearing in this report are proprietary; all such trademarks are acknowledged and every effort has been made to indicate them by the normal UK publishing practice of capitalisation. However, the presence of a term, in whatever form, does not affect its legal status as a trademark. Analysys Mason Limited maintains that all reasonable care and skill have been used in the compilation of this publication. However, Analysys Mason Limited shall not be under any liability for loss or damage (including consequential loss) whatsoever or howsoever arising as a result of the use of this publication by the customer, his servants, agents or any third party.