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The mobile communications market is set for sustained growth worldwide, and 2006 is expected to be a watershed year as China adopts 3G

THE ASIAN TELECOMS sector has considerable cause for cheer as there seems to be almost universal consensus that global growth in  the industry will be driven by  the region.

As Daniel Kirwin,  managing director of the 3G World Congress and Exhibition put it, there has been a shift in the centre of gravity in the telecoms industry to the Asian market.

'The high growth mobile market opportunities are here. While the worldwide mobile communications market is set for sustained growth, Asia is leading the way with over half of the growth expected from emerging markets such as China and India,' he said, adding that the future looks bright for the region.

Four years ago NTT DoCoMo began offering applications using 3G mobile technology, and today it seems 3G has finally gained a firm foothold in the wider Asia-Pacific region.

While Japan and South Korea have, as usual, been the technological trailblazers, other markets such as Australia, Singapore and Hong Kong are at last adopting 3G on a mass scale.

'New technologies always go through a 'hype' phase and 3G has passed that and demonstrated to operators and to consumers that it is a viable service that provides a compelling option in the marketplace,' said Mary Lamb,  corporate communications and public affairs, Motorola Asia-Pacific. 'We are confident about the take-up of 3G around Asia Pacific and worldwide.'

This year marked the beginning of the 'popular' 3G era, Naohiro Yoshikawa,  of Nomura Research Institute's (NRI) communication industry consulting department, told a symposium in Taipei recently.

This year commercial 3G services were launched in Malaysia -  which has one of the highest mobile penetration rates in Asia - and Taiwan.

Some industry sources, however, feel that next year, when mainland China will issue 3G licences, will be the watershed year for 3G telecommunications in Asia.

'China is obviously the most critical market, simply because of its huge size, but developed telecom markets such as Singapore and Hong Kong will also be key in terms of operators enhancing their networks for 3G,' said Simon Yeung,  executive director and chief operating and strategy officer of Hong Kong-listed Comba Telecom Systems.

'We expect to see rapid growth next year as 3G gains mass acceptance. Besides, as more countries in Asia issue licences, we are anticipating exponential demand for our 3G solutions,'

Mr Yeung said.

The opportunites posed by the China market have not been lost on Motorola either.

'The adoption of 3G by China set for 2006 will create new opportunities for Motorola's network infrastructure business,' said Ms Lamb. 'We also see opportunities for network optimisation services and application hosting services for operators and carriers across both 2G and 3G networks.'

With increasing mobile penetration and the adoption of 3G on the cards, Mr Yeung is bullish about the prospects for Asian companies.

'They have the benefit of a lower cost base and economies of scale. We are also seeing more companies from Korea, Taiwan and the mainland giving greater impetus to in-house research and development and innovation instead of  'me-too' products.'

Meanwhile, in the standards game, several 3G technologies have evolved. This happened in a conventional and orderly fashion, said Mr Kirwin.

'There will be no dominant network standard in the future and users will be able to dynamically select the most appropriate technology from the range of options available.'

Two of the hottest topics in the mobile communications sector today are WiMax and mobile entertainment.

While technically WiMax is wireless broadband networking technology, it is being considered complementary to 3G technology, with potentially a role in the backbone infrastructure for voice communications.

No wonder this year's 3G World Congress has a separate area called the WiMax Village, and a forum dedicated to mobile entertainment.

'3G cellular systems are no longer the only game in town,' said Mr Kirwin, explaining the broad portfolio of the event.

'Technologies such as WiMax, DVB-H and DMB are starting to take shape. WiMax is well-positioned for success in local area nomadic environments and is complementary in many ways to 3G in the wide area mobile environment. It will be an important player in the hybrid wireless future. We also see business models starting to mature, such as mobile TV. Discussing 3G in isolation will provide an incomplete picture.'

A recent study by market research group In-Stat projected that the WiMax subscriber base in the Asia-Pacific region would grow from about 80,000 now to more than 3.8million by 2009, accounting for almost 45 per cent of the world total.

The growth will be led by China, which is expected to contribute 38 per cent of regional WiMax equipment revenue. Total WiMax equipment spending in the region is forecast to reach US$1.98billion by 2009. Mobile entertainment in the region is expected to garner revenues of about US$47 billion by 2010.

'Mobile entertainment is definitely a fast-growing market segment in Asia,' said Arthur Chang, chief executive of Green Tomato, a mobile game and application service provider.

'We believe that entertainment and game services on mobile phones will be increasingly multimedia-rich, with convergence and crossover from different industries. That is an indication that the market is ready to adopt 3G-enabled mobile entertainment.'



Asia to drive global growth of telecoms sector