August 1, 2020

Asia Pacific Will Account for Around Half of New Subscribers Globally by 2025, Says GSMA

According to a report authored by GSMA Intelligence, the research and consulting arm of the GSMA, a UK-based organization that represents the interests of mobile operators worldwide, "The Covid-19 outbreak has had wide-sweeping effects on all aspects of the [Asia Pacific] economy due to falling commodity prices, reductions in international investment, decreased incoming remittances, rising foreign debt burdens and a disproportionate impact on the informal sector (especially important in Asia Pacific). Undoubtedly, the outbreak will affect the development of the mobile ecosystem as well, despite the industry’s best efforts to cushion the impact."

The report, The Mobile Economy Asia Pacific 2020, further says "the digital ecosystem has proved vital in the response to Covid-19. Participants from the entire digital value chain – including operators, vendors, internet players and governments – are pulling together to ensure the most positive outcome possible. And as a side effect of the pandemic, mobile operators have been granted a unique opportunity with a boost in the adoption of mature/quality-based services e.g. video calling for business, online collaboration tools, video streaming, e-commerce and mobile payments. At the same time, the situation has brought to attention governments that have not taken the necessary steps to establish an inclusive digital economy."

What is more, "Across Asia Pacific, and indeed around the world, the Covid-19 outbreak has highlighted the importance of a robust digital economy." The strength of a robust digital economy will depend on the variety of information and communications technology (ICT) solutions made available for consumers and enterprises alike.

"Digitization, which was already an important target, is therefore moving up the agenda for businesses and governments alike, with many accelerating their timelines because of Covid-19. A range of businesses, particularly those in retail, transport, logistics, manufacturing and healthcare, are looking to potentially increase their investment in digital transformation to cope with the impact of the pandemic and build a stronger position for the future."

Based on conversations with colleagues in the Asia Pacific region, I concur that "[v]endors of ICT solutions, especially those operating across the entire value chain, should take this as an opportunity to strengthen their role as key ICT partners to enterprises. But timelines will vary: some enterprise customers will escalate their ICT investments immediately, while others will have to balance addressing the short-term crisis with long-term opportunities."

Below are the report's key findings:

5G Investment:
  • Mobile operators will invest over $400 billion (Capex) on their networks between 2020 and 2025, of which nearly two-thirds ($331 billion) will be spent on 5G deployments;
  • Asia Pacific is home to some of the most advanced 5G markets in the world, with nine markets having launched commercial mobile 5G services – including Japan at the end of March – and 12 more have officially announced plans; and
  • 4G remains the dominant technology across the region in countries such as Bangladesh, India, Indonesia and Pakistan, where the focus remains in areas such as identity, digital commerce and payments, and cross-ecosystem collaboration to help create the digital societies of the future.

Regional Growth:
  • At the end of 2019, 2.8 billion people in Asia Pacific subscribed to mobile services, accounting for 66 percent of the population. With nearly 500 million new subscribers added since 2014, the region is one of the fastest-growing in the world and home to over half of total global subscribers; and
  • Asia Pacific will account for around half of new subscribers globally by 2025 and by this time, we forecast 266 million new subscribers to be connected across the region, bringing the total to just over 3 billion (70 percent of the population).

Socio-economic Development:
  • Over the next six years, 663 million people across Asia Pacific will start using mobile internet for the first time, bringing the total number of mobile internet users in the region to around 2.7 billion by 2025 (61 per cent of the population).
  • This growth in connectivity is helping the mobile industry increase its impact across all of the UN's Sustainable Development Goals and spurring adoption of mobile-based tools and solutions (e.g. in agriculture, education and healthcare) that aim to improve livelihoods in low- to middle-income countries and close the gender gap.

As reflected in the image to the right, the spread of 5G throughout the region will facilitate the adoption of connected devices (IoT). GSMA predicts that over six billion new IoT connections in Asia Pacific by 2025, accounting for half of global new additions. This creates an opportunity for those companies developing key growth verticals such as smart home and smart buildings.

Given my interest in digital health, I appreciate that "5G's role in the healthcare response to the pandemic, which utilized technologies such as telemedicine, remote ultrasound and thermal imaging, together with the benefits from the digitization of supply chains/Industry 4.0 in Asia Pacific, underscore the importance of the B2B segment." Furthermore, "Policymakers will need to provide regulatory flexibility for B2B partnerships so that operators have the freedom to innovate to realize 5G's full potential."

While not mentioned in the report, per se, it is important to note that companies developing hardware and services as a result of an improving technology infrastructure must implement the most stringent cybersecurity measures.

Infographic: GSMA Intelligence

What impact do you think the Covid-19 will have on Asia Pacific's digital economy? What ICT solutions are you developing for this rapidly growing region?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

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