Ericsson Targets 50% Share of South-East Asia's Mobile Phone Market; Winning New Contracts in India, Bangladesh, Malaysia

Sweden's telecoms equipment vendor and handset maker, Ericsson, aims to take a 50% share of South-East Asia's mobile phone market by 2010, Ericsson’s president for South-East Asia, Jan Signell told reporters at CommunicAsia 2007, a communications technology exhibition and conference held in Singapore. "In South-East Asia, including Bangladesh, we are seeing the mobile penetration increasingly growing, especially in the low-ARPU (average revenue per user) market," Signell was quoted by AFX as saying.

Ericsson also announced it has secured two multimedia services hosting contracts from India's state-owned operator, BSNL. The contracts are for a content-download portal and a ring-back tone system. The Swedish vendor also indicated it has also been selected by Malaysia's leading mobile operator, Maxis Communications, to expand and upgrade its WCDMA/HSPA network, enabling the operator to provide wireless residential broadband services to major cities and towns in mainland Malaysia. Implementation has commenced and is scheduled to be completed by the end of the year. In addition, Ericsson EDA technology has been selected to supply EDA broadband-access technology to Broad Band Telecom Services (BBTS), a leading internet service provider in Chittagong, the second-largest city in Bangladesh.

In addition to the new contracts reported today, Ericsson announced a series of deals awarded in the Asia-Pacific region in the past month:

• 19 June 2007: Selected by Indian operator Spice Telecom to provide push email and personal information management services.
• 19 June 2007: Selected by Orascom Telecom to supply network radio equipment for the access network of its Bangladeshi subsidiary, Banglalink.
• 19 June 2007: Selected by China Unicom to upgrade its GSM network across six provinces and to give end-users enhanced data services.
• 10 June 2007: Signed a framework agreement with China Mobile, valued at about US$1 billion, to expand China Mobile's GSM coverage in 19 regions of China.
• 31 May 2007: Selected by China Mobile Pakistan (CMPak) for the rapid expansion of its GSM network throughout the south of Pakistan.

Outlook and Implications

• Growth Ambition: Ericsson has already said it is targeting more businesses in China and India, seeing the huge growth potential within the two markets. Global Insight expects that over 60% of global mobile subscriber net additions between 2007 and 2011 will be driven by the growth in these two markets (see China-India: 15 June 2007: Ericsson Targets More Business in China and India and World: 13 April 2007: Substitution Shakes Up the Telecoms Sector). According to Global Insight estimates, the number of mobile subscribers in China will reach about 940 million by the end of 2011 from 461.08 million at the end of 2006, while the figure for India will rise to about 370 million from 149.50 million at end-2006. Ericsson's additional plan to raise its market position in South-East Asia makes sense as the region has several high-growth emerging mobile markets, such as Indonesia and Vietnam. In these countries, mobile penetration rates are still low compared with the developed markets. Indonesia had an estimated 60 million mobile subscribers—with a penetration rate at 26.6%—at the end of 2006. Meanwhile, Vietnam had 14.8 million mobile subscribers and a penetration rate of 17.3%.
• Opportunities in Broadband Segment: At the CommunicAsia 2007 conference held in Singapore, executives from AT&T and Nokia Siemens Networks also addressed their increasing focus on the broadband internet markets in South-East Asia, eyeing significant growth opportunities in the segment. Except for Singapore, broadband penetration levels are considerably low across countries in the region. A number of barriers have inhibited growth, including low PC and landline penetration, the lack of broadband infrastructure and the low average income of consumers. However, various surveys have shown increasing consumer demand of broadband internet subscriptions in the region. Malaysia and Thailand have started to see significant subscriber growth in the sector, but Indonesia, the Philippines and Vietnam are still at the beginning of their growth curves. In contrast to most of the developed markets, where broadband services are largely provided through fixed-line technologies, the industry regulators and operators in South-East Asia are increasingly looking into the potential of wireless broadband access, particularly in remote areas (see Asia-Pacific: 24 April 2007: Broadband Metrics—Broadband Internet Ripe for Growth in South-East Asia).