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ASEAN ANALYSIS  24  August 2010

Telecoms in Asean

By David Swartzentruber
AseanAffairs   24 August 2010

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Throughout the 20th century, as western countries surged progressively ahead in telecommunications, residents, tourists and expatriates had good reason to complain about the poor and often expensive telephone telephone communication from Asian cities to the rest of the world.

In many countries, this was because the “telephone company” wasn’t a private company but a government agency that was poorly managed and funded, had no competition and little incentive to improve.

But following the development of the first cell phone in Chicago in 1977 and its arrival in Asia a decade later, things began to change.

The 1990s were a decade that saw cell phones change the face of telecommunications throughout Asia. As tech-savvy private firms obtained concessions to invade the markets of various countries, everyone, even those isolated in rural areas, benefitted.

The government telephone operation often extracted heavy fees from the new cell phone concessionaires and they needed the money as their land lines languished and they verged on bankruptcy.

Whole countries such as Laos and Cambodia have now gone to cell phones and even have services more advanced than supposedly modern Thailand. The latter country is still struggling to get its 3G service off the ground.

The cell or mobile countries made the world smaller and no part of the world benefitted more from that communications revolution than Asia.

In Asia the march is now on to smartphones. Consultancy Frost and Sullivan said smartphones would account for 54 percent of the Asia-Pacific mobile market in five years, up sharply from 5 percent in 2009.

The Asian market is still dominated by prepaid users (80 percent of the total) rather than users who have long-term contracts, as is often the case in the United States and other western countries.

The consultancy said data usage from smartphones would generate more than US$38 billion for the region's telecom operators by 2015, from slightly more than US$1.3 billion dollars in 2009. The report noted that smartphones were spreading rapidly in the populous countries of China, India and Indonesia.

The communications revolution in Asia has made “the mystery of Asia” more accessible to the rest of the world and has brought tremendous changes in the social, political and economic sectors.

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