Hi -
A warm hello again from Bangalore! I've just released my first book,
"The Internet Economy of India, 2001" (see www.inomy.com for table of
contents, sales info, etc.).
An article I wrote on the wireless Internet market in Asia has been
published:
http://www.economictimes.com/today/05netw01.htm
Happy reading, and do stay in touch -
- madan
[Madanmohan Rao, Editor, INOMY.com; Consultant, 4Cplus.com; Conference
Committee, India Internet World; Bangalore, INDIA]
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Asia leads world in wireless Net technology
The Economic Times Online
http://www.economictimes.com
Thursday Apr 05 2001
Madanmohan Rao
FROM the ashes of the first generation of dotcoms is arising a new breed of
players: more focused, more result-oriented, and more targeted on emerging
technologies like the mobile internet � the �M-dotcoms.�
And the largest and fastest growing markets in the world for the wireless
internet are right here in Asia, particularly east Asia.
�Asia is beating Europe and North America in pure wireless markets, and
will lead in the wireless internet as well,� said Emmanuel Sauquet, Asia
director of wireless product solutions for Nortel Networks, at the recent
Wireless internet World Asia 2001 conference in Singapore.
Wireless communication standards and capabilities are evolving rapidly
across the spectrum, from 1G (voice only) in 1979, 2G (GSM/TDMA, with
speeds of 9.6 to 14.4 Kbps) in 1992, 2.5G (GPRS, with speeds capable of 115
Kbps in 2001; EDGE, capable of 384 Kbps, in 2002), and 3G (WCDMA, 2 Mbps)
this year.
The paradigm of the 3G world will be any device, any network, any content.
�As for devices, we will see both a convergence and a divergence,� he said.
Dedicated devices will soon converge between the home and the office
environment in a `Swiss Army knife� fashion, as handheld computers double
as cellphones and even digital cameras.
At the same time, there is a divergence of devices according to
functionality: communications (pagers, phones), computation (PDAs, PCs,
palmtops, notebooks) and entertainment (cameras, games, MP3 players).
New opportunities are opening up for startups and big operators along the
wireless internet value chain � interface devices (voice, stylus and
earpieces), content, m-services, aggregation, and systems integration
(especially in bridging networks, security, billing, and customer care
systems).
The research firm Strategies Group predicts that the majority of
Asia-Pacific inhabitants will first experience the internet through
wireless rather than traditional wired means.
The global market for wireless internet software, content, and commerce
will exceed $25 billion by 2005, with more than 80 per cent of the 2
billion wireless subscribers living outside the US, according to Merrill
Lynch.
The worldwide user base of wireless phones (estimated at about 600 million)
already exceeds the internet user base (of about 420 million, out of which
10 per cent use the wireless internet).
Asia has an estimated 250 million cellphone users today, increasing to 600
million users by 2005. In Asia the number of mobile phone users is double
the internet user base, and mobile units are fast overtaking fixed line
installations.
Japan will lead in 3G adoption, with services expected to be rolled out in
May 2001, followed by Europe and other parts of Asia in 2002, and the US in
2003.
Japan, South Korea, and the Scandinavian countries are thus in the lead;
the other `surprise mover� in Europe in Spain, which is aiming at rolling
out 3G services in August this year.
South Korea has 27 million cellphone users, out of whom 15 million use the
wireless internet for applications like stock trading, said Greg Tarr,
chief investment officer at M-Werks Mobile internet Fund in South Korea.
Korean companies are also looking to form tie-ups with wireless internet
players in other major international markets like Brazil, which share
characteristics similar to some Asian countries.
Challenges for startups, operators and investors lie in increasing ARPU
(average revenue per user), resolving standards issues so that one single
device can be used in multiple international telecom circles, and in
recovering carriers� 3G capital expenditure costs for technology and licenses.
�For startups to succeed in the long term, they must be able to scale
outside region, while also having demonstrated success with at least one
local blue-chip customer. A multinational management team also helps� Tarr
advised.
Asia also has extremely high turnover in new models of cellphones. �In
Japan, cellphones are changed by users every three to six months, as
compared to an average of nine months in Hong Kong,� said David Almstrom,
VP of Ericsson China.
China had 85 million cellphone users at the end of 2000, and will cross 100
million by the middle of this year. China also has an estimated 22 million
internet users today, and is expected to cross the 100 million user mark in
2004, according to Almstrom.
�Mobile internet will be the key to accessing cyberspace in large Asian
countries like China,� he said. A record-breaking 10 million SMS messages
were sent out on Chinese New Year�s day earlier this year. Numerous
startups are emerging in the wireless internet space.
ICQ is a killer application - but is hot only when you are on your PC.
Mobile users, however, are always �on,� according to Steve Haslett, CEO of
Black Octopus
�The reply path to an ICQ message sent to a mobile user will entail making
a call � and the size of this market is enough to make any cell operator
sit up and take notice at the ARPU numbers. Very little direct revenues are
reported for ICQ sites, but SMS is already a $18 billion market,� Haslett
said.
�The key is to leverage buddy lists, of friends, team members, colleagues,
and other community members. People are more likely to reply to a message
from a friend than from other people,� said Haslett.
The US has a very high installed base of PCs, and has not paid as much
attention to mobile internet content. This is beginning to change, with
teens and corporate mobile users coming on to this, Haslett observed.
In addition to the consumer market, another exploding sector is the
wireless LAN market which is expected to grow from $624 million to in 1999
to $3 billion in 2002.
�We offer mobile service platforms across networks, and operate in
`middlespace.� To scale globally, you have to have a global product,� said
Adrion Stewart, co-founder of Singapore-based Edge Matrix, which has
offices India, Hong Kong, Australia, Taiwan, and Malaysia.
Another hot technology direction is Bluetooth, which focuses on low-power
wireless delivery of content and services for the �last metre.�
�Bluetooth has over 2,000 adopter companies, and industry acceptance is
increasing fast,� said Ajith Narayanan, engineer at the IBM Emerging
Technologies Centre, Singapore. IBM�s labs in the US, Japan and India are
collaborating on this front.
Typical Bluetooth communication ranges for device discovery and service
recovery protocols are less than 10 metres, and frequency hopping prevents
eavesdropping.
�Within enterprises, Bluetooth has a lot of potential for conferencing,
badge checking, and inventory monitoring. There are huge growth
opportunities for the personal area networks,� said Narayanan.
�Technology companies also need to develop solid core IPR strategies
(intellectual property rights. They need to tap into stock markets around
the world. For instance, 120 Israeli companies are listed on Nasdaq - but
only a handful from India,� said Matei Mihalca, head of software internet
research at Merrill Lynch in Hong Kong.
There is also a huge market for voice enabling wireless internet
applications. �92 per cent of users prefer to access the Web in their local
language,� said Pascale Fung, founder and chief scientist at Hongkong-based
start-up Weniwen, which integrates Web functions and VOXML with IVR systems
to create `voice browsers.�
�We use a location server, application server, and content server to
leverage geocoding techniques and provide yellow pages locator information,
routes, maps and other services which are critical for these M-platforms,�
said David Singer, vice president at Gravitate.
The company offers platforms called CLOUDS (client locator and user
discovery system) and LEAP (location enabling application platform).
�Location is the killer app in M-space,� said Singer. Attention should be
paid, however, to issues like protecting user privacy, he warned.
Some of the more popular wireless internet services include realtime stock
quotes, stock trading, weather updates, traffic alerts, sports scores,
flight confirmation, news flashes, currency conversion, online yellow
pages, games, M-banking, and other location-based time-sensitive
information. For business users, sales tracking for mobile salesmen via the
Intranet is a useful application.
�But it is absolutely clear that for the wireless internet services market
really take off in a country, there will have to be close cooperation
between carriers, handset companies, content providers and m-service
companies who will have to work together,� advised M-Werks� Greg Tarr.
Japanese telco NTT DoCoMo, whose i-Mode wireless internet service is the
world�s leader, has got its business model perfectly right, according to
Tarr � revenues are proportionately shared with the content providers. In
other markets, operators even expect content providers to pay to get
featured on their networks, he lamented.
In sum, then, the US may have started off the global internet race in the
PC era, but east Asia currently leads in the mobile internet race. The
International Telecommunications Union predicts that the Asia-Pacific
region will ramp up internet-enabled wireless phones before the rest of the
world and is poised to become �the world�s mobile powerhouse.�
The ITU also predicts that by 2010, more than 50 per cent of all
mobile-phone users in the world will be in the Asia-Pacific region, up from
35 per cent in 2000. Hong Kong, Japan, South Korea, Singapore, and Taiwan
now have more mobile subscribers than wireline subscribers.
But the ITU also observes that the rest of the Asian countries are not
moving as fast, and many have restrictive government policies in this
regard. -
� The Economic Times Online. All rights reserved.
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