3G driving growth in Asian mobile data revenue

Nicole Mccormick/Informa Telecoms & Media
19 Mar 2009

Mobile data revenues accounted for 30% or more of total revenues for 13 operators in Asia Pacific in 3Q08, compared with just eight operators a year earlier, according to an Informa Telecoms & Media survey of 41 Asia Pacific operators.

Australia's Telstra, Optus and 3 derived more than one-third of their total revenues from data in the quarter, thanks in part to aggressive 3G pricing, which has fueled take-up. In 3Q08, Telstra's data revenue amounted to $136.7 million - making up 31% of its total - and its closest rival, Optus, took in $87.9 million, which equates to a slightly higher portion (32%) of its total revenue.

In 3Q08, Singapore Telecom, Telecom New Zealand and Hong Kong cellco CSL saw data revenue shares rise to 34%, 31% and 30% respectively, up from less than 30% apiece in 3Q07. SingTel Mobile's data revenues jumped a massive 63% year-on-year to $34.1 million, a testament to the extent of 3G take-up among the operator's subscribers. 3 Australia posted the second-largest hike in 3Q08, of 56.5%, with data revenues of $36.7 million.

But it came as no surprise that SMS-led Filipino operators Smart Communications and Globe Telecom saw the region's largest percentage contributions from data in 3Q08. In the No. 1 spot was Smart, whose data revenues made up 55.9% of its total, and rival Globe took second place, with 47.3%. Since September's economic slowdown, both operators have felt compelled to boost the value of their SMS bucket plans by including more free texts each month. The operators have even introduced unlimited-SMS service for periods ranging from a few hours to a day.

Smart is also seeing its share of revenue from 3G services rise. In 3Q08, its wireless-broadband service, SmartBro, showed no signs of slowing down, with its wireless-broadband-subscription count having grown 57% in the nine months to end-September, to 473,000, up 65,000 in 3Q08 alone. Wireless-broadband revenues grew 94% in the nine months, to about PHP3.1 billion ($65.84 million), a significant improvement from the PHP1.6 billion recorded for the same period in 2007.

SmartBro's prepaid Plug-It wireless-modem service, which was launched in late March, had more than 76,000 subscriptions at end-3Q08, thanks to its affordable bundle pricing, nationwide coverage and ease of use.

Data revenues accounted for more than 40% of total revenues for Japanese operators NTT DoCoMo and SoftBank Mobile in 3Q08, thanks to rising 3G penetration and the popularity of flat-rate data pricing in Japan. SoftBank Mobile's data revenues grew almost 46% year-on-year, reaching $312.9 million in 3Q08. Although the figure is higher than DoCoMo's 19.68% rise, it was from a much smaller base.

It was the region's heavyweight, China Mobile, who topped the list in terms of data revenue, taking in $1.43 billion in 3Q08, followed closely by DoCoMo, with $1.2 billion.

The volume of SMS sent by China Mobile subs grew 5% quarter-on-quarter in 3Q08, to 153.4 billion, and the number of value-added-business-service, MMS and music-service users, who use the GPRS and EDGE networks, grew steadily, at 5%, 8% and 7%, respectively.

Elsewhere, the data revenues of Indonesian operators Indosat and Telkomsel grew to 34% and 31.5% in 3Q08, from 33% and 30% in 3Q07, because of growth in 3G-subscription counts and continued high SMS usage.

3G contribution

In general, the rise in 3G subscriptions is fueling growth in mobile data revenue in the region. In turn, 3G take-up is being stimulated by large bundled data packages, cheaper 3G handsets and the popularity of mobile broadband data cards.

At the same time, voice tariffs are falling across the region, boosting the share of revenue attributable to data. As mobile markets in Asia Pacific become more mature, voice and SMS services are becoming commoditized. For instance, in Hong Kong, the introduction of 3G networks doubled capacity, causing voice prices to be cut in half.

The climb in data revenues has in general not been able to offset the declines in ARPU, though it has kept ARPU from falling more than single-digit percentages quarter-on-quarter.

The ARPU of 3G users is in general 25% higher than that of 2G users. The discrepancy is due to higher data usage but could also be due to the fact that high-end users are likely to migrate to 3G.

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