2004 South East Asian Infrastructure, Fixed Voice and Data Market

Report Description

This annual report offers a wealth of information on the Infrastructure Fixed Voice and Data markets in Brunei Darussalam, Cambodia, East Timor, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam.
Subjects covered include:
Infrastructure Issues
Regulatory issues and government policies re infrastructure
Datacomms Infrastructure, Leased Lines, ISDN
Public and Value Added Data Services
Leased Lines, ISDN, Frame Relay, ATM
Brief overviews on all of the major telecommunications carriers and service providers in the region

Category
Telecoms & Computing Annual Research

Executive Summary

Key Highlights
Brunei, with its relatively high annual GDP per capita, is a strong consumer of telecommunications services. There is an eagerness to have the most modern infrastructure available. The country has been working to restructure and generally liberalise the telecom industry to achieve this. The local landscape is still dominated by Jabatan Telekom Brunei (JTB), the incumbent telco that just happens to still be a division within the Ministry of Communications. Brunei remains coy about reporting its progress and it has been a difficult to obtain up to date statistics for the telecommunications sector.

In its effort to be a country with a modern telecommunications sector, Brunei has been moving energetically into the data and wireless technologies. Its push into mobile telephony, the country has already achieved a penetration of more than 45% compared with a fixed-line teledensity of just over 25%. By comparison the move into Internet has been less impressive so far, despite the government’s strong support for IT and e-commerce.

JTB’s BruNet introduced an Asymmetric Digital Subscriber Line (ADSL)-based broadband Internet access service in 2000 and has boosted its submarine cable link to the US to meet growth in demand.

Telecommunications in Cambodia features a flourishing mobile market and a progressively diminishing fixed-line market. There is an enormous gap between the number of mobile subscribers compared to fixed-line subscribers, the former totalling more than 600,000, while fixed lines remain at less than 40,000. Cambodia has had to tackle overwhelming obstacles in order to rebuild its telecommunications infrastructure after years of instability resulting from civil war and the consequent turmoil. The government’s major challenge is to draw more foreign investors, particularly in the telecom sector, into the country.

The development of Internet in Cambodia has been constrained by the country’s poor infrastructure. For a basic dial up service, the cost to the consumer has also been high. Despite such problems, a broadband service was first offered in September 2003, when local ISP Online announced that it had installed ADSL equipment. It had also launched a WiFi service in cooperation, establishing hotspots in Phnom Penh and Siem Reap.

The newly independent East Timor is in the process of rebuilding its telecommunications infrastructure after the turbulence that ensued after the referendum of 1999. The United Nations Transitional Administration in East Timor (UNTAET) provided overall administrative and financial assistance during the transition period until elections were held in April 2002. Australia’s Telstra operated telecommunications services until Timor Telecom took over in March 2003.

Besides the facilities operated by the UN, aid organisations and multinational military and police organisations, there were no data communications in East Timor during the UNTAET period. The one exception was 10 Internet-enabled terminals provided by Telstra at the central exchange in Dili. In December 2003, the new government set up its own data centre network offering Internet-based facilities for government services with a 512Kb/s bandwidth, which it planned to augment to 1Mb/s in 2004.

Taking over the infrastructure that had been managed by Telstra under the UNTAET mandate, Timor Telecom started out as a mobile operator in March 2003. The mobile network was based on a GSM 900 platform. Mobile coverage really only extended to Dili, but it has been quickly expanded to a number of other centres. By April 2003, there were about 12,800 pre-paid customers and 1,000 post-paid subscribers connected to the mobile network. Areas beyond the mobile coverage still need to use satellite phones.

Indonesia, with its distinctively challenging geographical character, has been struggling for years to put its national telecommunications infrastructure in place. When the Indonesia government launched its Joint Operating Service (KSO) strategy in 1994, it hoped that this would be the main driver for the development of the fixed-line telephone network in the country. The KSO program fell well short of expectations, having to contend with the devastating impact of the Asian economic crisis of 1997/98. The country’s telecom sector has, however, started to pick up momentum again.

The Indonesian mobile telephone market survived the economic crisis of the late 1990s. As arguably the hardest hit country in the region, the collapse of Indonesia’s economy saw the mobile telephone market temporarily go into reverse. It subsequently rebounded, recording remarkable growth. If the market is to continue to grow strongly, it must take advantage of the government’s regulatory changes and look for ways of attracting much-needed foreign capital into the market.

Internet services commenced in Indonesia in 1995. By end-2003, Indonesia had an estimated 8 million Internet users. This, however, represented only about 4% of the population. broadband services are in their infancy. By March 2003, Telkom had 35,000 ADSL subscribers. Problems with inferior telecommunications infrastructure, however, will continue to impede Internet growth. The country is considered to have enormous potential as an online market.

LaosWhilst recognising the importance of building its national infrastructure, including telecommunications, Laos still needs to find some economic equilibrium first. Despite setting up a telecom joint venture company with the Thai company, Shinawatra, in 1996 in a move designed to substantially boost its telephone network, fixed-line penetration in Laos is still low, sitting below 2%. mobiles, while popular, have proved unreliable and have only just started to become a substitution for fixed-lines. The mobile market was finally opened up to competition in 2003, giving an immediate boost to the market.

As one of the world’s poorest countries with very limited financial, technical and human resources, there are many obstacles to the full development of Internet in Laos. These include the political structure, widespread poverty, a general lack of adequate telecom infrastructure, poor English skills and a low level of PC penetration. ISPs in Laos initially moved cautiously into offering limited broadband Internet access. In mid-2003, ETL launched a broadband Internet service based on ADSL under a Japanese grant aid project. LaoTel then entered the broadband market in early 2004, offering satellite-based broadband Internet using the iPStar system operated by the Shinawatra Group out of Thailand.

The building of Malaysia’s telecommunications infrastructure has seen extensive fibre optic networks installed across the length and breadth of the country. The country has continued to find capital to invest in information technology and telecommunications infrastructure despite the setback of the economic crisis in the late 1990s. A prime example has been the high technology Multimedia Super Corridor (MSC) project. No matter how difficult the economy became, during this period the government continued to find funding for this key project. The end result has been the MSC strategy appears to have come through the economic crisis reasonably intact.
There has been strong growth in the mobile sector in Malaysia. Almost 50% of the 25 million people in Malaysia have a mobile telephone service. This means Malaysia has the second highest mobile penetration in South East Asia after Singapore. Malaysia’s mobile market has made a remarkable recovery after suffering a serious setback with the economic crisis of the late 1990s. Behind the recent strong growth activity, there has been restructuring of the industry. The remarkable growth in the mobile sector has not hidden the fact that the mobile industry was overcrowded. The country is looking to continue on its strong growth path in the mobile sector.

Malaysia has been heavily promoting itself as an IT hub in the Asia region. On the back of the
Multimedia Super Corridor (MSC) Project, high tech companies have been setting up in Malaysia. But efforts by the government at encouraging the wider community to embrace technology have so far met with limited success. There has been surprisingly little interest in broadband Internet. One bright spot in this market has been WiFi, as the service providers start to rollout their ‘hotspot’ services.

Myanmar's (Burma) telecommunications sector is dominated by the state-owned monopoly telephone service provider, Myanmar Posts and Telecommunications (MPT). The country continues to battle with grave economic problems and its troubled political climate. At the same time, soaring inflation is a major problem for the country, reaching a rate of 50% in 2003. Myanmar’s telecommunications sector is indicative of the overall state of the nation’s economy. Fixed telephone line penetration is less than 1%; mobile services are prohibitively expensive and therefore limited; Internet access is highly restricted.

By March 2002, there were reported to be only 4,000 people with access to the Internet in a country of 50 million. These ‘subscribers’ were carefully selected by the military regime. According to the ITU, the number of Internet users in 2002 more than doubled compared to the figure a year earlier and by 2003 the number had risen to 28,000.

The MPT prepared a master plan for the period 1990 to 2010, covering the upgrade of the national telecommunication infrastructure. Rapid advances in technology over the past 10 years give countries like Myanmar the opportunity to achieve dramatic progress in improving its telecommunications system. However, such a plan depends on being able to access the necessary capital and technological skills. The government has been considering allowing direct foreign participation in the telecommunication sector.

The Philippines telecommunications sector has witnessed substantial investment in infrastructure, driven initially by the Service Area Scheme (SAS) for fixed-line development in the 1990s and, more recently, by the burgeoning mobile telephony market. The fixed-line strategy, however, has seen the massive under-utilisation of infrastructure, raising serious questions about the effectiveness of the SAS process and other policy decisions.

The Philippines mobile market took off in 2000. Since the end of 1999, when there were only 2.7 million mobile subscribers in the country, the number of subscribers in the Philippines has grown more than ten-fold, racing past the number of fixed-line telephone subscribers in the process, to reach the 22 million mark by late 2003. The population of the country is 85 million. The mobile market in the Philippines has also seen a related phenomenon – the amazing performance of Short Message Service (SMS). Around 150 million text messages are sent every day. By 2003 and into 2004, much of the growth in the mobile sector had started to come from outside the main city of Manila, with the big operators vying for lower income segments of the population with a range of cheap prepaid products.

Compared with many of its Asian neighbours, the Philippines has been moving slowly on the adoption of Internet. Of the estimated 5% of the population who are Internet users, only a small fraction use a broadband connection to go online. Nevertheless, the data and Internet markets are well positioned for growth. Future growth will depend on the provision of reliable infrastructure, especially in the area of broadband Internet.

Singapore’s reputation for a truly progressive telecommunications market over the past three decades has been built on its excellent infrastructure. Whilst the nation’s geographical situation has been of considerable advantage in putting its infrastructure in place, other factors, including the government’s strong commitment to developing telecommunications, have certainly helped. Singapore was one of the first countries in the world to have a fully digital telephone network.

The mobile market in Singapore is characterised by its energy and innovation. Even as the growth appeared to have slowed somewhat, there was still considerable effort going into value-added products and services. At the same time, the market is approaching the future cautiously. The planning for 3G is a case in point. Some of the major operators and, to some extent, the government are being circumspect about the next generation of mobile telephony and the benefits it will bring.

Singapore is proud of the way it has embraced the Internet. It has built this Internet awareness through the early adoption of a range of innovative data technologies and platforms. Whilst the rate of development of online commerce in Singapore has been somewhat erratic over the last few years, the country continues to systematically promote the ever wider application of Internet within the community.

In the application of broadband Internet, Singapore was the first country in the world to deploy ADSL commercially when SingTel launched its Magix service in November 1997. However, broadband access did not really take off in Singapore as expected after such an early start. Despite having lost the broadband lead to South Korea and Japan, the last few years have seen Singapore starting to rapidly build its broadband base.

Thailand has dedicated a considerable amount of its resources to the building of a national telecommunications infrastructure over the last decade. The economic crisis of the late 1990s was certainly a setback to this process. However, the country has recovered much of the earlier momentum and is again attracting foreign capital and expertise to the continuing process of expanding and integrating its networks.

The Thai mobile market remains energetic. The number of subscribers had jumped to over 22 million by end-2003. With the arrival of two more players in the mobile market - TA-Orange and Hutchison CAT – to challenge the powerful duopoly of AIS and DTAC, competition has been heating up. And add to this the launch of Thai Mobile, the TOT/CAT cellular joint venture.

After a slow start, Thailand is now enthusiastically embracing Internet. Over the last two years, admittedly starting from a very low base, the estimated number of Internet users in Thailand has jumped by almost 400%. Most Internet subscribers are dial up. ISPs also seem to be recovering from their earlier reputation for unreliable performance.

The number of mobile phones in Thailand moved quickly past fixed-lines in 2001. Nonetheless, fixed-line services remain an integral part of telecommunications in the country. The Ministry’s promotion of ADSL broadband services in 2004 is likely to see an enhanced role for the copper network. Whilst good infrastructure is now in place to support data communication services, this segment of the market remains somewhat of a backwater for the moment.

Vietnam continues to grapple with the transition from a centrally planned economy to an economy based on the open market model. Its effort to preserve a substantial the role for the state in telecommunications sector has been holding back progress towards deregulation. Vietnam continues to remain unattractive to foreign investors and this, in turn, has a negative impact on its ability to develop its infrastructure.

On a positive note, Vietnam’s mobile market has been growing strongly, with signs that the government’s limited competition model is in fact working. The government is keen to encourage coverage in the provinces. The government has started to open the market up to new players, including at least one with no VNPT involvement. As with most other Asian mobile markets, growth in Vietnam was substantially boosted by the introduction of prepaid mobile services in 2001.

Having come late to the Internet, Vietnam is only now starting to explore the possibilities to be found in higher access speeds. The initial roll out of some broadband services has certainly started to happen but it remains on a relatively small scale. Incumbent VNPT has made moved on the development of an ADSL infrastructure and had launched a trial service.

Table of Contents

1. OVERVIEW OF FIXED VOICE, INFRASTRUCTURE AND DATA MARKET
1.1 Key developments
1.1.1 General
1.1.2 Infrastructure
1.2 Market overview
1.3 Telecommunications infrastructure
1.3.1 Overview
1.3.2 International infrastructure
1.3.3 Satellite networks
1.4 Data market
1.4.1 Overview
1.4.2 ISDN
1.4.3 Frame Relay and Leased Circuit
1.4.4 ATM
1.4.5 Value Added Networks (VANs)
1.4.6 VSAT networks

2. BRUNEI DARUSSALAM
2.1 Telecommunications market
2.1.1 Overview
2.2 Fixed network operators
2.2.1 Jabatan Telekom Brunei
2.2.2 DST Group
2.3 Telecommunications infrastructure
2.3.1 National
2.3.2 International
2.4 Data market
2.4.1 Overview
2.4.2 SHuTT
2.4.3 ISDN

3. CAMBODIA
3.1 Telecommunications market
3.1.1 Overview
3.2 Telecommunications infrastructure
3.2.1 National
3.2.2 International

4. EAST TIMOR
4.1 Telecommunications market
4.1.1 Overview
4.2 Fixed network operators
4.2.1 Telstra
4.2.2 Timor Telecom
4.3 Fixed network voice services
4.3.1 International calls
4.4 Data market

5. INDONESIA
5.1 Telecommunications market
5.1.1 Overview
5.1.2 Five-year telecommunications plans
5.1.3 Market analysis – 2004
5.2 Fixed Network Operators
5.2.1 PT Telkom Indonesia
5.2.2 PT Indonesian Satellite Corporation (Indosat)
5.2.3 PT Satelit Palapa Indonesia (SATELINDO)
5.3 Telecommunications infrastructure
5.3.1 National infrastructure
5.3.2 International infrastructure
5.4 Data market
5.4.1 Overview
5.4.2 ISDN and IN services

6. LAOS
6.1 Telecommunications market
6.1.1 Overview
6.2 Fixed network operators
6.2.1 Lao Telecommunications Company
6.2.2 Enterprise of Telecommunications Lao
6.3 Telecommunications infrastructure
6.3.1 National
6.3.2 International

7. MALAYSIA
7.1 Telecommunications market
7.1.1 Overview
7.1.2 Key developments
7.2 Fixed network operators
7.2.1 Overview of operators
7.2.2 Telekom Malaysia
7.2.3 TRI Celcom
7.2.4 Time dotCom
7.2.5 Maxis Communications
7.2.6 DiGi Telecommunications
7.3 Telecommunications infrastructure
7.3.1 Overview
7.3.2 National telecommunications network
7.3.3 International infrastructure
7.3.4 VoIP
7.4 Data market
7.4.1 ISDN
7.4.2 Frame relay and leased lines
7.4.3 Value-added networks
7.4.4 MPLS

8. MYANMAR (BURMA)
8.1 Telecommunications market
8.1.1 Overview
8.1.2 Network expansion
8.2 Telecommunications infrastructure
8.2.1 National infrastructure
8.2.2 International infrastructure
8.2.3 Satellite
8.3 Data market

9. PHILIPPINES
9.1 Telecommunications market
9.1.1 Overview
9.2 Fixed network operators
9.2.1 Overview of operators
9.2.2 BayanTel
9.2.3 Bell Telecom
9.2.4 Digital Telecommunications Philippines (Digitel)
9.2.5 Eastern Telecommunications Philippines Inc
9.2.6 Globe Telecom
9.2.7 PhilCom
9.2.8 Philippine Long Distance Telephone Company
9.2.9 Philippine Telephone and Telegraph Co
9.2.10 Smart Communications
9.3 Telecommunications infrastructure
9.3.1 Overview
9.3.2 National telecom network
9.3.3 International
9.3.4 Infrastructure developments
9.4 Data market
9.4.1 Services and networks

10. SINGAPORE
10.1 Telecommunications market
10.1.1 Overview
10.1.2 Liberalisation brought forward
10.2 Fixed network operators
10.2.1 Singapore Telecom
10.2.2 StarHub Pte Ltd
10.2.3 Other players
10.3 Telecommunications infrastructure
10.3.1 National telecom network
10.3.2 International infrastructure
10.3.3 Infrastructure developments
10.4 Data market
10.4.1 National
10.4.2 International

11. THAILAND
11.1 Telecommunications market
11.1.1 Overview
11.1.2 Market analysis – 2004
11.1.3 Information Technology Policy
11.2 Fixed network operators
11.2.1 Major telecom operators by market segment
11.2.2 Telephone Organization of Thailand
11.2.3 Communications Authority of Thailand
11.2.4 Proposed CAT/TOT merger
11.2.5 TelecomAsia
11.2.6 TT&T
11.2.7 Loxley
11.2.8 Shin Corporation
11.2.9 United Communication Industry Group
11.2.10 Jasmine International
11.3 Telecommunications infrastructure
11.3.1 National telecom network
11.3.2 Wireless Local Loop
11.3.3 International
11.4 Data market
11.4.1 Overview
11.4.2 Data infrastructure
11.4.3 Data services

12. VIETNAM
12.1 Telecommunications market
12.1.1 Overview
12.1.2 Market analysis – 2004
12.1.3 Future plans
12.2 Fixed network operators
12.2.1 Vietnam Post & Telecommunications
12.2.2 Saigon Postel
12.2.3 Viettel
12.3 Telecommunications infrastructure
12.3.1 National telecom network
12.3.2 Wireless Local Loop
12.3.3 International
12.4 Data market
12.4.1 Multi Service Digital Data Network
12.4.2 VSAT networks
12.4.3 ISDN
12.4.4 Frame relay
12.4.5 Vietpac
12.4.6 Data centres

13. GLOSSARY OF ABBREVIATIONS

Exhibit 1 – Major submarine cables in the Asia-Pacific region - 2004
Exhibit 2 – Satellite launches in Asia region – 2003 and beyond
Exhibit 3 – APT satellites in orbit – April 2004
Exhibit 4 – AsiaSat satellites in orbit - 2004
Exhibit 5 – BSAT satellites in orbit - 2004
Exhibit 6 – JSAT satellites in orbit - 2004
Exhibit 7 – New Skies satellites in orbit (Asia footprint) - 2004
Exhibit 8 – PAS footprint
Exhibit 9 – Overview of telecom service and operators – 2004
Exhibit 10 – Original consortia operating in each geographical zone
Exhibit 11 – Indonesian satellites – 2003
Exhibit 12 – Major operators by market segment
Exhibit 13 – Overview of telecommunications development in Vietnam – 1993 - 2004

Table 1 – Top 10 carriers in the Asia Pacific region – July 2002
Table 2 – Total WLAN equipment forecasts for Asia – 2003 - 2007
Table 3 – Asia Pacific ISDN growth – 1998 - 2003
Table 4 – Telephone network statistics – 2002
Table 5 – Fixed lines in service – 1990 - 2002
Table 6 – Telephone network statistics – 2003
Table 7 – Telecom revenue and investment statistics – 2002
Table 8 – Fixed lines in service – 1990 - 2003
Table 9 – Telephone network statistics – 2003
Table 10 – Telecom revenue and investment statistics – 2003
Table 11 – Fixed lines in service – 1995 - 2000, 2003
Table 12 – Telephone network statistics – 2004
Table 13 – National network statistics – March 2004
Table 14 – Fixed lines in service – 1995 - 2003
Table 15 – Fixed-line services by region – March 2004
Table 16 – Fixed lines* in Telkom and KSO regions – March 2004
Table 17 – Telephone network statistics – 2004
Table 18 – Telecom revenue and investment statistics – 2002
Table 19 – Fixed lines in service – 1995 - 2004
Table 20 – Telephone network statistics – 2003
Table 21 – Fixed lines in service – 1995 - 2003
Table 22 – Companies granted MSC status – April 2004
Table 23 – Telephone network statistics – 2003
Table 24 – Telecom revenue and investment statistics – 2002
Table 25 – Fixed lines in service – 1990, 1995 - 2003
Table 26 – Telephone network statistics – 2002
Table 27 – Telecom revenue and investment statistics – 2002
Table 28 – Fixed lines installed versus in operation – 1995 - 2002
Table 29 – Fixed-line market share – 2002
Table 30 – Fixed-line subscribers by operator – 2002
Table 31 – PLDT revenue share by sector – 2000-2001
Table 32 – Fixed lines in service – 1994 - 2002
Table 33 – Total fixed lines installed by operators – 2002
Table 34 – Telephone network statistics – 2004
Table 35 – Telecom revenue and investment statistics – 2002
Table 36 – Fixed-line versus mobile growth – 1998 - 2004
Table 37 － Fixed lines in service - 1998 - 2004
Table 38 – SingTel’s direct exchange lines – 1995 - 2002
Table 39 – Telephone network statistics – 2003
Table 40 – Telecom revenue and investment statistics – 2002
Table 41 – Fixed lines in service – 1990 - 2003
Table 42 – Number of subscribed ISDN circuits – 1994 - 2003
Table 43 – Telecom revenue and investment statistics – 2003
Table 44 – Telephone network statistics – 2003
Table 45 – Teledensity forecasts – 2005; 2010; 2020
Table 46 – Fixed lines in service – 1990 - 2003

Date Published：2004-8-3

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