Asia Pacific has long witnessed one of the fastest growth rates in mobile telephone subscriptions globally. In 2016, the region will reach another milestone: Mobile telephone subscriptions will cross four billion for the first time. Asia Pacific’s large middle class, its growing prosperity and expanding digital investments will drive the growth in mobile Internet connectivity going forward. This will play a significant role in increasing mobile subscriptions, which in 2016 is expected to be three times greater than the number of mobile telephone subscriptions in the next-closest region of the Middle East and Africa.
Mobile Telephone Subscriptions by Region: 2016
Source: Euromonitor International from International Telecommunications Union (ITU) and national statistics
Asia Pacific is projected to have the largest mobile Internet user base in 2016. The mobile segment in key markets across the region has, hitherto, been driven by cheap voice services, aimed at improving telecom connectivity among low-income consumers. However, stiff competition in markets such as India has led to a sharp decline in voice tariffs and average revenues per user (ARPU) despite the rapid growth in subscriptions. Operators have, therefore, focused on data services, which will facilitate mobile subscriptions growth going forward.
China is the behemoth of the region
In emerging Asia, China will have the highest mobile subscribers in 2016. It will also be way ahead of regional peers in mobile Internet uptake with a user base of 769 million in 2016, a phenomenal growth of over 1500% since 2010. Leading cellular operators, China Telecom and China Mobile, have been rapidly expanding their 4G footprint across the country. China Mobile has also conducted pre-5G trials in collaboration with equipment vendor ZTE.
Access to high-speed mobile Internet among the tech-savvy youth has also made China the global leader in m-commerce. Euromonitor International forecasts that Chinese consumers will spend US$334 billion through mobile phones and tablets in 2016, the most of any market globally. Alibaba, which stands as one of the largest and most successful digital commerce companies globally, has also facilitated mobile-driven commerce uptake through AliPay, its online payment system , as well as its online marketplaces, Tmall and Tencent.
As is unfolding in China, mobile Internet has the potential to revolutionise how consumers make their purchase decisions and the way businesses adapt to a fast-evolving commerce landscape. In fact, digital purchases made by Chinese consumers from mobile phones exceeded those made by personal computers in 2015, according to new research from Euromonitor International. The shift to mobile-based shopping in China can be attributed to increased penetration of smartphones and the addition of more user-friendly apps that further cement the convenience of on-the-go consumption.
Smaller markets will drive future growth
The future holds great promise for some of Asia Pacific’s relatively smaller markets in terms of mobile data consumption. Over the 2016-2030 period, Pakistan will be the growth leader in mobile Internet subscriptions. Despite intermittent political instability and persistent religious extremism, the Pakistani government completed the 3G and 4G auctions in April 2014. Large cities such as Karachi and Lahore, home to a relatively affluent middle class, have witnessed strong growth in mobile Internet uptake along with other digital services such as m-commerce.
Asia Pacific's Mobile Internet Growth Leaders: 2016-2030
Source: Euromonitor International from International Telecommunications Union (ITU)
Note: Figures for 2016-2030 are forecast
Mobile telephony has flourished in mobile Internet growth leaders like Laos and Afghanistan despite high poverty levels and military conflict in the latter. In both countries, mobile operators are primarily focused on providing basic voice services. Despite the launch of 3G networks in both Laos and Afghanistan, the markets are severely underpenetrated. Mobile Internet is available primarily in select cities, such as Kabul in Afghanistan, but network investments, economic stability and demand for data services among the youth will improve mobile Internet coverage going forward.
Bangladesh is home to a highly competitive mobile market and its young population, stable economic growth and rising data demand makes the nation very promising for new digital services. With 3G already available and 4G networks expected to be rolled out in the near future, the mobile Internet segment will witness robust growth going forward. However, the telecom sector faces issues such as regulatory uncertainty surrounding delays in spectrum auctions, taxation and high prices of 4G-compatible handsets.
Among the larger Asian markets, India holds great promise in extending mobile Internet coverage to the wider population. The country is home to the second largest mobile subscriber base globally. However, mobile Internet penetration was low at 8.0% in 2015, compared to the Asia Pacific average of 34.8%. India is expected to conduct an additional round of spectrum auctions in early-2016 with the first-ever sale of 700Mhz frequency band. This is expected to enhance service quality including download speeds and coverage in smaller towns and semi-urban areas.
Rural connectivity and data privacy are key issues going forward
Despite the growth of mobile subscriptions and improved access to mobile Internet connectivity in Asia Pacific, there are potential hurdles that could constrain growth moving forward. Slow Internet speed, low rural connectivity and relatively expensive data plans are the chief growth impediments. There is also the key issue of overcoming the urban-rural digital divide and enabling poorer rural consumers to get access to high-speed mobile Internet at affordable prices. With a large number of consumers coming online for the first time in several Asia Pacific nations, online data privacy and the ‘trust’ factor will also remain an important issue in delivering Internet on smartphones.