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The Holy Grail: Connecting “The Next Billion”

By Madanmohan Rao

There are over a billion users of mobile communication services worldwide, and a billion users in Asia alone who have access to either mobile or fixed-line telecommunications services – but growth is in danger of slowing down unless operators and manufacturers come up with creative ways of connecting “the next billion” on this planet.

Leading mobile players, entrepreneurs and policymakers from around the world gathered in Busan, South Korea, for the ITU (International Telecommunication Union) Telecom Asia 2004 conference and exhibition, suitably titled “Asia Leading the Future.”

Markets for voice services and basic data offerings are beginning to saturate and stabilise, especially in the countries that got into the game early on. The challenge now is to reach the as-yet unreached, using a clever combination of diverse hardware platforms, more affordable devices, new market segments, and better marketing campaigns.

ITU Secretary-General Yoshio Utsumi stressed that the Asia Pacific region has become a byword for technical innovation and success as reflected in widespread deployments of mobile, WiFi and online gaming in the region. “But a significant proportion of countries within the Asia-Pacific region are still struggling to provide affordable telecommunications services to their citizens,” cautioned Utsumi.

Yang Seung-taik, president of the ITU Telecom Asia 2004 Pusan organisation committee, remarked that Asia is forecast to have another 1 billion consumers in coming 10 years in spite of a current slow in the IT industry and the recent downward trend in the world economy.

While most mobile growth has happened in urban concentrations, the challenge and opportunity lies in targeting less urbanised and rural pockets of Asia, according to Ashok Jhunjhunwalla, professor at the Indian Institute of Technology in Madras, whose Telecom and Networking research group has also successfully incubated a range of telecom services companies such as Midas Communication.

“If you get all of India into the mobile market, that’s a billion right there,” Jhunjhunwalla joked. Currently India is one of the fastest growing mobile markets in the world, clocking a steady 2 million new users a month. Growth is picking up not just in the major metros but the smaller cities as well.

During the first six months of 2004-2005, around 10.5 million subscribers have been added in India. 1.85 million subscribers were added during September 2004 compared to 1.67 million in August 2004.

Price points of mobile devices and calling plans have to continue to drop even more in India to bring new millions of users into the fold – and while this may cause some worry for investors, the good news is that the overall numbers will drive up revenues, said Jhunjhunwalla.

“Cheaper phones will definitely help,” observed Andreas Malzach, VP of OpenPlug, a manufacturer of more affordable phones. Other suggestions made at the conference in Busan included strengthening the feasibility and enforceability of universal service obligations (USO) to ensure that mobile operators do not ignore rural markets in favour of more lucrative urban ones, but the quest for an appropriate workable USO model continues.

Increasing the wireless reach into rural areas is a concern in Japan as well, said Shunichi Yamaguchi, senior vice minister for posts and telecommunications in Japan. Japan boasts some of the cheapest prices in the world for broadband Internet, not only in terms of absolute price but also as a percentage of the average monthly income. It is a leader in mobile Internet as well, but this market is largely in the urban areas.

Another strategy is to push new kinds of services into the market and open up new user bases. Operators KT and KTF of South Korea are pushing the concept of "Total Ubiquitous Technology." SK Telecom is marketing "Ubiquitous Town" services spanning satellite digital broadcasting as well as mobile services.

In fact, for countries like South Korea, the very definition of “digital divide” keeps changing. While basic Internet access is used by over two-thirds of the population, concern is growing about the emerging “broadband divide” between city and village.

Korean operators are also eagerly eyeing the M2M (machine to machine) market for wireless communications. In some markets next year, the traffic of wireless communications between machines is expected to surpass the wireless traffic between human beings – thanks to a huge push into wireless-enabled sensors and transmitters in industrial plants, warehouses, machines, supply chains and shopping areas.

Connecting “the next billion” can thus also mean bringing a billion machines and animals online, not just another billion human beings! Korean providers of satellite-based mobile services are describing scenarios where consumers can eventually scan tags on grocery and meat items to find out where they come from, and even whether they were raised using organic as compared to synthetic nutrients -- thanks to ubiquitous standardised and certified data entry schemes on RFID-like tags!

But there are huge markets, of course, of subscribers as well that are yet to be tapped. One-third of the world’s ICT users reside in Asia, and 35% of the world’s major IT corporations are also based in the region. The five countries with the highest broadband Internet penetration rates are all Asian countries. More than a third of the world’s CDMA subscribers are in Asia as well, especially in South Korea.

If you thought “e-Korea” was as far a vision as one could push at a national level during the years of the dotcom boom, the Koreans have gone a step ahead in the era of ubiquitous communications. The Korean government and industry are advocating the concept of “u-Korea,” in which a variety of digital services are integrated seamlessly into country-wide communications networks powered by mobile and satellite technology.

Much of the growth of mobile subscribers in Asia will come from regions of the world which are not yet on major infrastructure maps. Eager to bridge the gap and tap into these new markets, the “u-society” vision of Korea is targeted at the internal and external digital divides. South Korea has launched cooperation agreements with countries ranging from Cambodia to Myanmar, with its National Computerization Agency forging agreements with the Development Gateway Foundation and the World Bank.

Japan has also launched a new pan-Asian project to connect academic and research institutions in the Philippines, Vietnam, Thailand, Malaysia, Singapore and Indonesia via satellite.

The ITU's Asia Pacific Telecommunication Indicators report for 2004, released at the conference in Busan, showed that the increase in teledensity was close to 28 percent in lower-income countries of the region, reaching overall levels of 1 per cent. Countries with the lowest teledensity in Asia include Myanmar, Afghanistan, Bangladesh and Nepal.

The ITU report identified mobile as well as WiMax technologies as having great potential for socio-economic development of the region. The Asia-Pacific is experiencing a 38-percent annual growth rate in the mobile telecommunications space.

Asia leads the world in the overall telecommunications market, with 42 percent of the global total number of 2.46 billion subscribers. Europe accounts for 31 percent and the Americas 23 per cent.

China leads the mobile world with over 310 million subscribers, who are expected to send close to 550 billion text messages by the end of 2004, up from 170 million in 2003. The Philippines SMS market is robust with over 150 million messages being sent each day. South Korea and Japan together account for 86 percent of the 118 million 3G subscribers worldwide. 

Other innovations targeted at new markets, unveiled in Busan, included the world's first mobile phone with a hard drive, the Samsung CDMA phone, SPH-V5400, which has a 1.5GB, 1-inch hard drive and a megapixel camera.

Intel also disclosed key technical details of its upcoming wireless broadband chip for WiMax products, code-named Rosedale – the first system-on-a-chip design for cost-effective WiMax.

New networks based on standards like WiFi (IEEE 802.11, for local access) and WiMax (802.16, for backhaul) can help tap low-cost broadband Internet infrastructure and bridge the last-mile gap, thus accelerating technology transfer and adoption. Considerations of sustainability and profitability can be met with adequate planning and investment. Risks like theft of communication wires can reduced, as also costs of set-up, according to a report published by the Wireless Internet Institute.


The writer can be reached at madan@techsparks.com


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