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© Copyright 2005, Yankee Group Research, Inc. All rights reserved.
Camille MendlerVice PresidentYankee Group
Driving Global Change How Asia and Europe lead the global ICT market
NetEvents Singapore19 May, 2006
Page 2© Copyright 2006, Yankee Group Research, Inc. All rights reserved.
Agenda
• Introduction• Comparing regional trends• Issues to address• Conclusions
Page 3© Copyright 2006, Yankee Group Research, Inc. All rights reserved.
Which of these Victorians was right?
“East is East and West is West and never the twain shall meet”
Rudyard KiplingThe Ballad of East and WestThe Ballad of East and West
“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one most adaptable to change.”
Charles DarwinOrigin of the SpeciesOrigin of the Species
Page 4© Copyright 2006, Yankee Group Research, Inc. All rights reserved.
Inter-regional dependencies growMultinational companies: 2006 network expansion
Source: Yankee Group 2005 Global Network Strategies Survey, n=1,198 multinational companies globallyRegional samples: Western Europe=317, North America=370, Asia Pacific=311, Latin America=200
81% have network in
Asia
76% have network in
Europe
Continental Asia: 42% will increase capacityPacific Rim: 35% will increase capacity
W. Europe: 28% will increase capacityE. Europe: 24% will increase capacity
Page 5© Copyright 2006, Yankee Group Research, Inc. All rights reserved.
Europe and AsiaLarge Enterprise WAN Challenges
Key WAN Challenges
27%
21%
27%
30%
19%
31%
41%
47%
43%
60%
0% 10% 20% 30% 40% 50% 60% 70%
Europe
APAC
Remote & mobile access Network capacity
Disaster recovery/business continuity Containing costs
Network security
Network security key issue across both groups
Source: Yankee Group 2005 Global Network Strategies Survey
Page 6© Copyright 2006, Yankee Group Research, Inc. All rights reserved.
Enterprise Priorities By RegionKey investment areas in 2006
Rank North America
Western Europe
Asia Pacific
Latin America
1 Network security solutions
Network security solutions
Expanding Business Operations
VoIP/IP Telephony
2 VoIP/IP Telephony
VoIP/IP Telephony
Implementing business application (SAP, CRM, BI, etc.)
Improving Mobile Communications
3 Improving Mobile Comms
Storage & Data Back-up
Disaster Recovery
Implementing business applications (SAP, CRM, BI, etc.)
VOIP/IP Telephony not a priority across Asia Pac enterprises
Source: Yankee Group 2005 Global Network Strategies Survey
Page 7© Copyright 2006, Yankee Group Research, Inc. All rights reserved.
Europe and AsiaDisconnect on enterprise IP convergence
IP Telephony Status
5.1%
6.3%
46.9%
15.7%
19.6%
14.8%
79.1%
74.1%
38.3%
NorthAmerica
Europe
APAC
No plans Budgeted plans Deploying
IP Network Convergence
14% 12% 9%
11%25%
13%
26%
25%
17%
21%11%
7%
0%
20%
40%
60%
80%
Europe North America Asia Pacific
Throughout entire network
Between major domestic and international sites
Between major domestic sites
Between major international sites
Almost half of Asia Pacific enterprises have no immediate IPT plans
Source: Yankee Group 2005 Global Network Strategies Survey
Page 8© Copyright 2006, Yankee Group Research, Inc. All rights reserved.
Europe and AsiaHousehold Penetration: Fixed Broadband Subscribers
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2004 2005 2006 2007 2008 2009 2010
Pe
rce
nt
Australia
China
Hong Kong
India
Japan
South Korea
Western Europe
© Copyright 1997-2006 Yankee Group Research, Inc. All rights reserved.
• Debate continues on level of market saturation for fixed broadband
• Selected Asia Pacific markets more mature in consumer market
• Battle for ARPU vs. penetration
Page 9© Copyright 2006, Yankee Group Research, Inc. All rights reserved.
Europe and AsiaBroadband Pricing Shifts Fuel Adoption
• Downward pricing trend in consumer and residential markets.• China and India: deep cuts in business between 2002 and 2005• Australia: Aggressive cuts in residential broadband• Price remains the key broadband facilitator to boost uptake in several
Asian economies—with the exception of Korea, where the broadband market has reached maturity
Source: Yankee Group Global Consumer Fixed-Line & Media and Business Fixed-Line Forecasts, Q1 2006
Consumer DSL ARPU
$0
$10
$20
$30
$40
$50
$60
$70
2002 2003 2004 2005 2006
Australia
China
HongKongIndia
Japan
SouthKoreaEurope
Business DSL ARPU
$0
$50
$100
$150
$200
$250
$300
2002 2003 2004 2005 2006
Australia
China
HongKongIndia
Japan
SouthKoreaTotalEurope
Page 10© Copyright 2006, Yankee Group Research, Inc. All rights reserved.
EMEA
2005 2006 2007 2008 2009
Europe and Asia: Next Generation BroadbandMeeting the need for speed
Asia Pacific
2005 2006 2007 2008 2009
VDSL/VDSL2VDSL/VDSL2
ADSLADSL
ADSL2+ADSL2+
Massive shift away from ADSL. But Europe’s lack of investment in fibre optic upgrades beginning to impede.Currently <20% of European local loops are VDSL capable
Source: Yankee Group Global Broadband Forecast, Q1 2006
Page 11© Copyright 2006, Yankee Group Research, Inc. All rights reserved.
Asia Pacific Private Sector Investment in Greenfield Projects
• Commitment to ICT development linked to private sector
• Examples where constitutional reforms and interim measures taken to facilitate telecom liberalization
– KOS joint operating schemes in Indonesia, BTO schemes in Thailand and BCC in Vietnam
• Since 2000, growth in private infrastructure investment projects
• Greenfield projects most common, with exception of China, where divestitures preferred
• Companies pursuing infrastructure projects changing
– National large enterprises important participants.
– Eg: Reliance, Bharti in India and Banpu in Thailand
Private telecom project investments 2001-2004
$0 $2 $4 $6 $8
China
India
Indonesia
Thailand
Divestiture Greenfield project
Source: World Bank PPI Project Database and Yankee Group, 2006
• Level of greenfield investment will drive innovation in Asia Pacific
• European infrastructure investment trends more muted, focused to new EU member nations
Page 12© Copyright 2006, Yankee Group Research, Inc. All rights reserved.
Show me the moneyMobile revenues by region 2003 to 2010 ($ millions)
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
2003 2004 2005 2006 2007 2008 2009 2010
Asia-Pacific
Europe
Africa
Middle East
North America
Latin America
Differences in ARPU mask vast size of Asia Pacific market in subscriber terms
Source: Yankee Group Global Mobile Premium Forecast, Q1 2006
Page 13© Copyright 2006, Yankee Group Research, Inc. All rights reserved.
Asia and EuropeMobile Data Revenues – 3G and beyond?
APAC
Consumer Messaging Share of Data Revenue
Infotainment Share of Data Revenue
Mobile Marketing/Advertising Share of Data Revenue
M-Commerce Share of Data Revenue
Enterprise Share of Data Revenue
Europe
Consumer Messaging Share of Data Revenue
Infotainment Share of Data Revenue
Mobile Marketing/Advertising Share of Data Revenue
M-Commerce Share of Data Revenue
Enterprise Share of Data Revenue
Enterprise market undeveloped
Infotainment market less developed
Source: Yankee Group Global Mobile Premium Forecast, Q1 2006
Page 14© Copyright 2006, Yankee Group Research, Inc. All rights reserved.
Asia Pacific and EuropeAll Eyes on Broadcast Mobile TV and IP TV
Asia: Mobile TV Deployments
Operator Country Standard
KT Freetel Korea T-DMB
LG Telecom Korea T-DMB
SK Telecom Korea S-DMB, T-DMB
NTT DoCoMo Japan ISDB-T
KDDI Japan ISDB-T
Vodafone KK Japan ISDB-T
Beijing Jolon China T-DMB
Guangdong Mobile Television Media
China T-DMB
Europe: IP TV Deployments
Operator Country Service/ Platform
France Telecom
France, (Neth, Spain, UK)
Ma Ligne TV
Fastweb Italy Basic, etc
Free France Freebox
Telefonica Spain, (Czech, Chile, Brazil)
Imagenio
Grupalia Spain Superbanda.net
Homechoice UK Big/base pack
Fitness for purpose? “You can’t eat a sandwich through a straw”
Page 15© Copyright 2006, Yankee Group Research, Inc. All rights reserved.
Global deploymentsMobile TV Standards
StandardSpec
DVB-H T-DMB S-DMB MediaFLO IP Datacasting
ISDB-T
Regions Europe, US Asia, Europe Korea US, Japan Global Japan
Channel switching
5 to 8 seconds 2 to 3 seconds 2 to 3 seconds 1.5 seconds N/A N/A
Major Backers
Nokia, TI, Samsung, Philips, Crown Castle, Motorola, Freescale
Korean govt., Samsung, LGE, Toshiba, Frontier Silicon
Samsung, LGE, SK Telecom
Qualcomm, KDDI
Ericsson, Qualcomm, IP Wireless
NEC, Fujitsu, Sony, Mitsubishi
Pros •Piggyback DVB-T sites•Largest list of backers
•Broadcasts over DAB spectrum, largely available Europe and Asia
•First mover advantage
•Spectrum secured in US•Minimal infrastructure investment for US operators
•No spectrum issues•Positioned as bridge to broadcast•Regulatory consistency
•Easy setup in Japan due to existing infrastructure
Cons •Securing spectrum•User experience
•Bulky antenna•Power consumption
•Bulky antenna•Line of sight needs heavy investment•Power consumption•Finite satellite lifespan and repair issues
•Fewer backers outside US, Japan
•Non TV like experience
•Limited to Japan•Power consumption
Page 16© Copyright 2006, Yankee Group Research, Inc. All rights reserved.
Issues to AddressLearning from each other
Asia Pacific• Mobile
– Success of Mobile TV still under question – business model/technology
– Leading mobile consumer infotainment
• Fixed Broadband– Saturation in some residential
markets, future push in enterprise– VOIP services now gaining strong
attention– Leader in FTTH
• Content– No global content competitor– Still dominated by US firms
Europe• Mobile
– Operators begin to admit that 3G investment has been disastrous
– Push to reduce opex– Push to find/retain higher ARPU
subscribers (eg: enterprise)• Fixed broadband
– Infrastructure issues begin to impact deployment
– Push for IPTV may be muted– VOIP everywhere
• Content– Wanadoo (France Telecom) only
strong European content provider – but far behind US
Evolution is inevitable, survival is not
Page 17© Copyright 2006, Yankee Group Research, Inc. All rights reserved.
Camille Mendler
Vice President
cmendler@yankeegroup.com
+44 207 307 1085
Charles Moon
Senior Analyst
cmoon@yankeegroup.com
+852 9047 2490
www.yankeegroup.com
Any Questions?
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