HONG KONG, November 16, 2011 /PRNewswire/ --

GSMA Calls for Greater Spectrum Allocation, Lower Taxes and Rebalanced Regulatory Frameworks to Further Extend Mobile Connectivity Throughout Asia Pacific

Mobile Asia Congress -- The GSMA today announced that global mobile connections will reach six billion by the end of November 2011 and that the Asia Pacific region, a major driving force behind the global mobile sector, accounts for half of these connections. According to the GSMA Asia Pacific Mobile Observatory 2011 report(1), mobile penetration in Asia Pacific will reach a landmark three billion connections in Q1 2012 - nearly two years earlier than projected in the region's 2009 Mobile Observatory. By 2015, it is expected that the region will reach 4.1 billion connections, growing at twice the rate of Europe and North America, and will account for 40 per cent of mobile data traffic worldwide.  

Tom Phillips, Chief Government and Regulatory Affairs Officer, GSMA commented: "Asia Pacific is one of the world's fastest-growing mobile markets, through an impressive combination of investment and innovation. China alone currently has 940 million total mobile connections, exceeding the total number of connections in Europe and the US combined."

The extensive growth in penetration of mobile services in Asia Pacific - from just 12 per cent in 2002 to 78 per cent in 2011 - is largely due to mobile operators in the region's major markets investing an average of 16.3 per cent of their revenues into capital expenditure, significantly higher than their counterparts in other parts of the world. Other key factors include:

• Investment in Mobile Broadband infrastructure, as many operators across the region are already driving HSPA+/LTE rollouts;
• Cost-effective pre-paid services (84 per cent of Asia Pacific connections versus 66 per in Europe and 15 per cent in USA/Canada);
• Introduction of low-cost handsets and reduction in mobile usage prices;
• Innovative business models including infrastructure sharing and unique distribution strategies, making the expansion of network coverage to rural areas economically viable for operators and consumers; and
• Limited fixed-line infrastructure, driving many consumers to adopt mobile communications.

Social and Economic Contribution of the Mobile Industry to Asia Pacific

Mobile connectivity has rendered significant social and economic benefits for the Asia Pacific region. The mobile market across the AP17(2) countries currently generates an estimated US$485 billion, or 2.7 per cent of total GDP, with mobile operators alone contributing over US$310 billion in 2010. The industry is also a significant contributor to employment in the region, with approximately 11.4 million people either directly or indirectly employed through the mobile ecosystem.

However, as impressive as Asia Pacific's mobile connectivity growth has been, its largest countries by population, China and India, have penetration rates at just over 60 per cent, which means that approximately one billion people in these two countries alone are still without a mobile connection. Meanwhile, other markets such as Pakistan and Bangladesh still have mobile penetration rates below 60 per cent.

Mobile Broadband Readiness Index (MBRI)

According to the Observatory's inaugural Mobile Broadband Readiness Index (MBRI)(3), the 17 largest markets in Asia Pacific are actively cultivating a mobile ecosystem that is conducive to further growth. In 2010, Japan was at the top of the index, driven by its early HSPA, HSPA+ and LTE rollouts and its pro-innovation environment. Hong Kong and Vietnam also featured strongly demonstrating their commitment to fostering a prosperous Mobile Broadband landscape.

However, although the results of this Index indicate markets' 'preparedness' for increased growth, they also demonstrate how key barriers such as insufficient spectrum, ineffective regulatory policy and taxation inhibit connectivity and major socioeconomic benefits delivered through Mobile Broadband services.

The GSMA Observatory finds that there is scope for far greater progress to 'connect the unconnected' across the Asia Pacific region and is calling for the following measures:

• Optimise spectrum allocation and licensing

The Observatory has found that the majority of Asia Pacific countries still lack sufficient spectrum, which is preventing a full range of voice and data services being made available for consumers across the region. To ensure the delivery of mobile services at the lowest possible cost and to allow consumers to use the widest selection of devices, the mobile industry needs allocation of internationally harmonised frequency bands and implementation of internationally harmonised band plans.

• Drive effective taxation

The GSMA is also calling for mobile industry taxes in Asia Pacific to be reduced in order to drive mobile penetration, and, ultimately, increase the total tax intake for governments.  For example, the Bangladesh mobile sector is one of the most heavily taxed amongst developing nations, where no less than six different taxes are in place, resulting in the lowest mobile penetration rate among the AP17 countries (49 per cent).

• Rebalance regulatory frameworks

The GSMA is also an advocate of rebalancing regulatory frameworks to address new players in the growing mobile ecosystem.  Overall, the market power of mobile data service providers, device manufacturers and operating system providers in the mobile sector is growing rapidly, as are their revenues from mobile services.

"This situation needs to be redressed, both to ensure that major players in the mobile sector do not remain below the regulatory radar, and to bring transparency to the sector, which in turn will help stimulate investment and growth," continued Phillips. "A more balanced regulatory framework and strategic public and private partnerships would have a significant impact in decreasing the costs of handsets, increasing the availability of cost-effective pre-paid services and propelling both domestic and foreign investment. The sum of these factors would support Asia Pacific reaching 100 per cent mobile penetration and enable the full extent of the economic and social benefits of Mobile Broadband services to be realised."

To view the full report, please follow this link: http://www.gsmworld.com/MO

Notes to editors

(1) This is the latest Asia Pacific edition in the GSMA Mobile Observatory series, produced by the GSMA in collaboration with A.T. Kearney, and provides a comprehensive review of the Asia Pacific mobile communications industry. This Observatory provides the latest statistics and market developments, and a reference point for participants in the mobile industry, policy makers and other interested stakeholders. It covers the state of the industry, including the evolution of competition, innovation in new products, services and technologies and the industry's contribution to social and economic development in Asia.

(2) The AP17 is comprised of Japan, Singapore, Hong Kong, Australia, South Korea, New Zealand, Taiwan, Malaysia, Vietnam, Indonesia, China, Sri Lanka, Philippines, India, Thailand, Pakistan and Bangladesh.

(3) The purpose of the MBRI is to show how the AP17 countries compare against one another from a 'readiness' perspective and identify means to sustain the growth from a market, regulatory policy and corporate strategy perspective.

About the GSMA

The GSMA represents the interests of mobile operators worldwide. Spanning more than 220 countries, the GSMA unites nearly 800 of the world's mobile operators, as well as more than 200 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment organisations. The GSMA also produces industry-leading events such as the Mobile World Congress and Mobile Asia Congress.  

For more information, please visit Mobile World Live, the online portal for the mobile communications industry, at http://www.mobileworldlive.com or the GSMA corporate website at http://www.gsmworld.com.

SOURCE GSMA