This is an intriguing development from a company many thought was withdrawing from the South Asian region.  A few years ago there were well publicized negotiations to sell its stake in Sri Lanka’s Suntel, which is believed to have failed for the lack of a high-enough bid.

TeliaSonera and its predecessor entities have not shown the nimbleness of its Nordic competitor, Telenor which has strong positions in South and South East Asian countries.  One hopes it will.  Both Nepal and Cambodia need investment and innovation.

This is what ITU’s Telecommunication/ICT Indicators Report for the Asia-Pacific region 2008 says. It was released at ITU TELECOM ASIA 2008, Bangkok, Thailand yesterday (Sept 2, 2008).

The Report finds evidence that ICTs and broadband uptake foster growth and development, but the question remains as to the optimal speed that should be targeted in view of limited resources.

The area in which the region really stands out is the uptake of advanced Internet technologies, especially broadband Internet access. The Asia-Pacific region is the world’s largest broadband market with a 39 per cent share of the world’s total at the end of 2007. In terms of broadband access, Asia-Pacific has made remarkable progress in the past few years, with subscriber numbers growing almost five-fold in five years: from 27 million at the beginning of 2003 to 133 million at the start of 2008.

In the region’s high-income economies, ubiquitous access is progressing through a competitive race to provide ever faster fixed broadband access. Operators in Hong Kong (China) and Japan have launched one-Gigabits per second (Gbps) broadband and triple-play services aimed at the residential market, featuring applications such as Internet telephony and television. The Republic of Korea leads the world in terms of the percentage of households with fixed broadband access, and no less than five economies in the top ten are from Asia-Pacific. The Republic of Korea, Hong Kong (China), and Japan also lead the world in terms of the proportion of households with fibre optic connections, essential for supporting the next generation of ultra-high speed Internet applications.

These high-income economies are also leaders in terms of third generation (3G) mobile cellular deployment. Fixed and mobile broadband technologies complement each other and users enjoy continuous high-speed Internet access. In Singapore, a ubiquitous Internet access plan combining unlimited 8 Megabits per second (Mbps) fixed broadband, 2 Mbps mobile broadband and access at some 800 Wi-Fi hotspots is available for just USD 35 per month.

At the other extreme, in most of the region’s low and lower-middle income economies, high-speed Internet access is limited to urban areas at best, typically expensive, and often not available at all. The regional broadband divide is striking, with poor economies having a close-to-zero broadband penetration, compared to that of rich economies where one in four persons is a broadband subscriber (Figure 1).

Figure 1: Fixed broadband Internet subscribers per 100 inhabitants, 2007

The gap in available broadband speeds between rich and poor countries is as wide as broadband penetration. In Japan, the Republic of Korea and Hong Kong (China), the minimum advertised broadband speed is faster than the maximum broadband speed in Cambodia, Tonga, Laos and Bangladesh.

While in low and lower-middle income economies mobile phones have become a substitute for the shortage of fixed lines, they are not yet fulfilling the potential of broadband access. By the end of 2007, only Indonesia, the Maldives, the Philippines and Sri Lanka had commercially deployed WCDMA networks. The region’s two largest mobile markets, China and India, have yet to launch mobile broadband. By the end of 2007, there were over 120 million mobile broadband subscribers in the region (Figure 2), but almost all (97 per cent) were in high income economies.

Figure 2: Mobile cellular broadband subscribers in Asia-Pacific

While the region’s high-income economies are pushing the frontier of broadband bandwidth to a point where applications have yet to catch up, many Asia-Pacific developing economies are bandwidth starved, inhibiting the development of their information societies.

The ITU Report argues that broadband uptake enables a range of socially desirable and valuable online services in areas such as government, education and health. The use of broadband technologies can help overcome many of the basic development challenges faced by poor countries. The Report provides a number of examples where broadband connectivity has acted as a catalyst for development. These include the provision of education through distance learning in the Solomon Islands, the creation of jobs through business incubators for women in China, and the supply of communication services for disaster management in Myanmar.

Read the press release here. Full report is not yet available in the public domain.

(Please click on the images for a better view)

Asia’s emerging markets, comprising eight nations, are expected to see mobile subscriber net gains of 573 million by end-2012, breaching the one billion mark to close the year at an estimated 1.06 billion subscribers, a report from research firm Frost & Sullivan said.

In 2007, these emerging markets were home to some 487 million mobile users, accounting for 37.1% of Asia-Pacific’s total mobile subscriber base, the report said.

The report also said the mobile services sector in eight emerging Asia-Pac countries (excluding China) earned revenues of $33.27 billion in 2007. This is predicted to reach $61.35 billion by end-2013, at a CAGR of 10.7% (2007-2013).

Countries included in this study are Bangladesh, Cambodia, India, Indonesia, Laos, Pakistan, Sri Lanka and Vietnam; all with mobile penetration rates of under 50%.

According to Frost & Sullivan industry analyst Jeff Teh, over half of the world’s mobile networks are believed to exist in emerging markets.

“Most mature markets in Europe, the Americas and even Asia are fast reaching saturation, adding fewer connections and offering fewer growth opportunities. As mobile operators in Asia scramble to add another staggering one billion subscribers onto their networks, Asia’s emerging nations offer the most palpable growth prospects, particularly in the rural sectors,” Teh said.

He adds that such opportunities are however not without a gamble “the inherent characteristics across these emerging markets are that they are generally lower-income hence low ARPU segments, with blended ARPU as low as $3.90 per month in some countries, and subscribers are largely inclined towards prepaid services.

The Economist is not correct saying ‘No Evidence’ of Internet blocking in Sri Lanka, and in Laos and Cambodia the Internet usage is low so blocking does not make any difference.

As shown, even in Asia the attitude of officialdom varies when it comes to filtering content of a social nature. In many places agreements are set with service providers to block nasty stuff such as child pornography. In a few countries intervention is stronger, up to the level of pervasive censorship. This week Pakistan’s block on YouTube accidentally caused an international outage for that website. Iran and Saudi Arabia have also prevented their citizens from accessing the video-sharing site.  

Source: The Economist, Chart Gallery 

The next highest was Singapore at a surprisingly low 23rd, and Malaysia at 34th. The top 35 countries are otherwise dominated by Europe, Australasia and North America. 

The biggest revelation was that most Asian countries are sliding down the rankings.
Singapore was the most prominent to fall from grace, falling to 22nd from seventh position in 2005. China fell to 65 from 57, India from 87 to 113, Thailand from 46 to 62, the Philippines from 41 to 66 and Indonesia from 96 to 106.  

Other countries to slide included Maldives, Sri Lanka, South Korea, Brunei and Myanmar while Japan, Malaysia, Vietnam and Cambodia improved their rankings. Sweden topped the rankings followed by Denmark, Norway and the United States. Read more.

In rural Cambodia, a new 3G/UMTS mobile network is being deployed for delivery of high-bandwidth wireless services, including live streaming of mobile TV channels.  

In rural India, farmers can monitor crop prices and place orders for goods electronically by visiting broadband “community centers” that are taking root around the country. 

All are examples of a “rural revolution” enveloping less-developed countries in
Asia and around the world, made possible by advanced telecommunications technologies such as Wi-Fi, WiMAX and 3G.  

This revolution is bringing high-speed Internet access and next-generation telephony to millions of users who previously had little or no access to even the most basic telecoms services. Read more.

However, three new players, Viettel, SLD Telecom, and AZ Communications are all preparing to enter the market which will lead to increased competition with established players Mobitel, Camshin, and Casacom.

Pyramid Research believes while new players will undoubtedly drive growth via lower tariffs and increased mobile coverage, six players in a market of 14.3m inhabitants is unsustainable and we do expect some consolidation in the medium term. Read more.

However, he emphasized that ICTs must drop in cost for the investments of the 1990s to bear fruit. “I’m involved in nanotech and biotech, and fairly rapid diffusion of this technology will be very important.”

Although mobile and wireless access are expanding, fixed line and Internet access lag – and the differences are largely due to regulation.

The future may be wireless broadband, but for the foreseable future the policy is fixed line.

Dr. Michael Spence

Dr. Spence began by telling his economic perspective on the importance of good governance. “There’s a lot of talk about how all you need is a market system and that’s just nonsense. Anyone who’s studied information flows in an economy knows that good governance is the foundation of the market system. As an example, a country that doesn’t have a central bank that can control interest rates, etc is a country that’s in trouble. Everyone knows the consequences of a weak central bank, what we need to do is let people know that there are consequences to having instability in the ICT sector.

On What’s Important

On data: A reasonably accurate portrait of the portrait of the state in these dimensions is useful. If you look at the Chinese data, you can debate if the growth is exaggerated, but the data is there and it’s clear.

Foriegn Investment: Creating appropriate conditions for. Competition is the best way since it assures that pricing is appropriate.

Internet: I would not like to see the Internet set aside in favor of ‘plumbing’. I would like to see LIRNEasia get Internet and the www talked about and worked on. I didn’t realize this until I was in Cambodia at an cafe, and then’s when I realized that the Internet wasn’t ‘real’ at that speed. The right answer seems to be high speed connections to hubs where the Internet is real.

We do this in part to reduce volatility and encourage investment. We need to do stuff that is unpopular. The regulator also serves as someone the politicians can point to and say ‘it’s not my fault’.

Finally, let me just say that the network based information technology we’re now seeing develop is in economic terms lowering transaction costs all over the place

It’s absolutely crucial that we not end up in a situation where those powerful forces are at play in one part of the world and not the other.

It’s impossible to not get discouraged about success, but there’s no other way to do it. (This is said with a smile. It was encouraging)

Why LIRNEasia?
Enormous amounts of money are invested annually in ICTs. The potential of information and communication technologies, or ICTs for economic and social progress is substantial. ICTs aren’t necessarily the answer to higher incomes and development in itself; but together with other factors, they provide a means to improve people’s capabilities and knowledge so that they may better their lives. ‘Asia’ is the collective name for the countries roughly encircled by Russia, Turkey, Egypt and the Indian and Pacific Oceans. There is little that the entire region holds in common. Within this vast continent, lies South Asia, home to the largest concentration of poor people in the world. Yet Asia is seen as driving the global economy and is home to some of the world’s highest ICT industry performers. Korea has the highest broadband penetration rate as well as the second highest estimated number of Internet users in the world. Taiwan (China) has the highest number of mobile phones per hundred inhabitants in the world; Hong Kong (China) has the third highest (ITU, 2004). But Asia is also home to some of the lowest: the Internet is used by less than one per cent of the population in DPR Korea, Myanmar, Afghanistan, Bangladesh and Cambodia, just to name a few. There are less than two telephones (fixed or mobile) per one hundred people in several of these countries (ITU, 2004). Broadband penetration is barely worth mentioning in many of Asia’s poorer nations. In terms of ICT sector performance, there are many Asias. ICT use in Asia and developing countries is held back by laws and regulations. The existing policy and regulatory arrangements do not help people use ICTs to live their lives; they actively hinder them, for the most part. Very often, especially in South Asia, laws and regulations restrict, or even preclude the exploitation of new low-cost technologies, such as Wi-Fi. Wi-Fi is ideally suited for developing countries, it is a very low-cost and convenient technology developed by multiple small manufacturers because the United States government chose to unregulate two bands of frequencies (2.4 GHz and 5.8GHz), also called the Industrial, Scientific and Medical (ISM) bands. Subject to minimal safeguards, people were free to do whatever they wanted in these bands. Today, pretty much every laptop you buy has got Wi-Fi built in. The equipment is cheap and ideal for countries where purchasing power is low. However, the frequency band that Wi-Fi operates in is regulated in most other countries. In Sri Lanka, for example, the law requires operators to obtain a license for ‘every frequency emitting apparatus’ from the telecom regulator. Although some operators, like LIRNEasia’s service provider have managed to include Wi-Fi services within the scope of their licenses, the full potential of the service cannot be achieved unless the law is changed. Unlicensing or deregulation of this band would greatly reduce the cost of making use of this technology, allowing the cost to users to reflect the true cost of the technology, not arbitrary regulatory charges. This is the kind of thing that we will seek to promote and facilitate.

Our Mission
LIRNEasia’s mission is to improve the lives the people of Asia; by making it easier to use the information and communication technologies that they need; by changing the laws, policies and regulations to enable those uses; by building Asia-based human capacity through research, training, consulting and advocacy. To that end, LIRNEasia will endeavor to transform governance and regulation of ICTs in the Asian region from obstructive, inhibiting regimes, into ones that will allow opportunities for people to use ICTs in ways that will improve their lives and to expand opportunities for entrepreneurs and innovators to introduce new products and services with a minimum of government interference. Our immediate priority is building a team of Asian ICT policy and regulatory professionals that can work on equal terms with the best in the world. Initially concentrating on the South Asian and Bay of Bengal areas, LIRNEasia will soon expand its scope to the rest of Asia, with the help of our regional partners. Sri Lanka will anchor this effort, but it will be a genuinely regional initiative, drawing on human capacity from the region itself. We will focus on creating and disseminating independent, useable, actionable knowledge, through applied research, on documenting and disseminating regional best practices, on training and on some forms of short-term advisory assistance to governments/parties who request it. Our primary audiences are government (including bilateral and multilateral donor agencies), the private sector within and outside Asia and civil society. We emphasize Asian expertise, but are not exclusive about it. We do case studies, but our policy is to abstract from the complexity to produce information that other countries can use.

Our culture

‘We aim to build a virtual organization that will one day make working from Bhutan as easy as working from this office. We will work in teams; we will work flexibly and we will work effectively. The organization centered on this office will help each person work to their full capacity; it will be a learning organization; a place where creativity is valued and debate encouraged. It will not be a place to clock in and out from; to engage in office intrigue; or to worry about the next promotion. It will add to your productivity, not drain it.’ -Rohan, LIRNEasia office opening

Currently, LIRNEasia’s physical presence consists of two full time staff, an executive director and a compact 15 by 20 ft office under the leafy shade of an ancient Mara tree at the back of the parking lot of SLIDA, the administrative training academy of Sri Lanka, in Colombo. Neither our size nor our location will in any way limit our possibilities. With a small administrative core, much of our work will be facilitated through extended networks across Asia. The value of this is parallel to that of networks according to Metcalfe’s law: the total value of a network is greater than the sum of the number of its users. We already have several researchers and partners across South Asia involved in our first projects. As far as technology and cost permit, LIRNEasia will function as a virtual organization, with small ‘wireless, paperless’ offices located in a few South Asian countries at a second stage. These offices will function primarily as administrative units, as well as communication points, where, for example, someone in Dhaka can participate in a project meeting, taking place in Colombo via video conferencing facilities at a Dhaka office. As well as a facilitator of innovative ICT uses, we aim to be an exemplar. Our office is one of the few Wi-Fi hotspots in Sri Lanka. At LIRNEasia’s inaugural event, the 2004 WDR Expert Forum at the Mount Lavinia Hotel, a temporary hotspot was provided for the participants, so they could check their email from their seat at the forum, saving them the hassle of going down to the hotel’s highly priced Business Center for Internet access. We also hope to collaborate or make use of the Distance Learning Center Limited, an advanced video-conferencing and IT-based teaching facility at the SLIDA office, onsite. Our website is a user friendly work and discussion platform, adapting innovations from the blogging culture. Animated discussion and debate, and is open to anyone interested. Whilst making innovative use of technologies, we emphasize the building of relationships and common values among our team members. Regular colloquia are held for our local partners to share information on discuss hot topics. In the future, we even expect that our regional partners can be virtually present at these, by the use of whatever technology possible. For the most part, the project teams will not be in the same country, so for this reason it is very important that we have effective mechanisms for the seamless coordination and completion of our work. Additionally, the significance of Colombo office as the base of LIRNEasia’s operations will gradually be reduced over a period of three years.

Supporting organizations
LIRNEasia is the Asian affiliate of LIRNE.NET, collaboration among leading universities in Denmark, the Netherlands, South Africa and the United Kingdom and now LIRNEasia. LIRNEasia’s programs over 2004-2005 will primarily be funded by IDRC [International Development Research Center] of Canada, which supports many projects in developing countries, and has over the last two decades supported hundreds of research projects in South Asia, including the ISP, Pan Lanka Networking. LIRNEasia’s work will also be funded by infoDev, a World Bank unit that has partnered with LIRNE.NET since 2001 in the World Dialogue on Regulation for Network Economies. LIRNEasia is a non-profit organization incorporated under Sri Lankan law but intending to operate throughout Asia. LIRNEasia was officially launched on 17 September 2004 during the World Dialogue on Regulation’s Expert Forum in Sri Lanka.