19 June 2015
Growing Digital Divide and IoT Seen as Asia's Online Challenges
The gap between Asia's digital-haves and have-nots is clearly widening dramatically, while the capacity is not yet in place to handle the surge in demand from mass IoT uptake, according to many experts at this year's CommunicAsia event.
Chief among the many items on the agenda at this year's CommunicAsia were three particular issues – the digital divide in Asia, the opportunities emerging from the Internet of Things (IoT), cloud services and data analytics, and the challenges of mobile and location marketing.
In Asia, the growth of various aspects of the telecommunications industry hinges on just how good the internet access is. Abu Saeed Khan, Senior Fellow of LIRNEasia, a Sri Lankan headquartered ICT policy and regulation think tank, expressed his concern about Asia's growing digital divide. Highlighting the issue, he said: "The cost of internet access is high in Asia. In most American and European cities, it's under US$2 per Mbps. The cheapest in Asia is Hong Kong and Singapore at US$6. Markets that can least afford it – such as Jakarta – are paying US$12.
"This has led to South Asia being poorly serviced. Southeast Asia is largely okay, and the rich parts of Asia are as good as Europe. The problem is that Asia's internet access resembles a patchwork quilt with little or no cross border connectivity. We have proposed that the Asian Highway – the 140,000 kilometres of highway linking Japan to Turkey – incorporate fibre optic lines along its route."
Broadly in agreement was Michael Ruddy, Director of International Research for Terabit International, a specialist US-based telcom marketing consultancy, who pointed out that, in Southeast Asia, the difference between the least connected country, Myanmar, and the most (Singapore) is a bandwidth per person 900 times larger. By comparison, the difference between the most and the least in Central Asia is 180 times, and in West and South Asia, 100 times. Cost, he said, was indeed a huge barrier. The average Singaporean pays 0.1% of his income to secure a 1Mbps line, while the average Myanmarese would have to pay 182%.
Recognising this problem in his own country, Sigit Puspito Wigati Jarot, Commissioner, Indonesian Telecommunications Regulatory Authority, announced that Indonesia's goal for 2019 was to achieve fixed broadband access for 71% of urban homes and 49% of rural homes, as well as mobile broadband coverage of 100% and 52%, respectively. He said: "In 2014, Indonesia was the largest IT spender in Southeast Asia, ranking 19th globally. In 2016, our goal is to invest US$17.8 billion in IT."
This divide between the digital-haves and have-nots was also reflected when it came to IoT. A recent International Data Corporation (IDC) report predicted that the world would have 29.5 billion connected devices by 2020. Asia Pacific, not including Japan, would have 8.6 billion. China alone would account for 59% of this figure, while one in five of such devices globally would be in China. IoT represents a market of US$583 billion in Asia Pacific. Yet it is the rich parts of the region that will forge ahead, with the countries with highest per capita IoT set to be South Korea, Australia, New Zealand, Singapore and Taiwan.
Getting there, however, may be a bumpy ride, bandwidth issues aside. Identifying the wider problems, Rob van den Dam, Global Telecommunications Industry Leader for IBM, said: "The current approach to IoT is designed to connect billions of devices, but that approach won't scale to hundreds of billions. IoT is in need of a reboot. For the future, the industry needs to rethink IoT in line with the costs involved for devices that may last decades, the inherent lack of privacy, and the lack of functional value."
Also heavily reliant on bandwidth, of course, is cloud computing. Here, again, problems are clearly on the horizon. Citing the need to plan for expansion, Bernie Trudel, Data Centre and Cloud Chief Technical Officer for Cisco Systems Asia, based in Singapore, said: "While worldwide cloud traffic will quadruple from 2013 to 2018, the pace of growth is slightly slower in Asia. Cloud services now take up 12% of total IT spend in Asia Pacific, not including Japan, growing four-and-a-half times faster than overall IT spend. The major uses of [the] cloud are for email and workgroup apps, file and print functions, and web serving.
"Bandwidth quality is one of the factors in the growth of cloud services. Other areas of concern in this region are privacy, IP protection, business sophistication, the reliability of the power grid – with different concerns more relevant in particular markets. It should be no surprise the top five most cloud-ready territories are Japan, New Zealand, Australia, Singapore and Hong Kong."
A report by Gartner, the US IT research group, indicates that cloud services will grow by 29.1% per year from now to 2019, with the market size reaching US$16.5 billion this year. It's a market now dominated by just three players – Amazon Network Services, Google Compute Engine, and Microsoft Azure. For Peter Moore, Regional Marketing Director for the Public Sector at Amazon Web Services, the impact of the cloud is already far-reaching. He said: "Cloud has become the new normal, not just with established companies, but also with start-ups and government agencies. Cloud enables you to disrupt long-standing businesses quickly – as has been shown by Airbnb and Uber. It's now hard to remain competitive without using [the] cloud."
A number of delegates addressed the need to provide services on top of telco networks. A particular advocate here was Sunita Kaur, Managing Director – Asia for Spotify, the music streaming service. She said: "Spotify now has 60 million users worldwide. It started in Asia two years ago and now serves Singapore, Malaysia and Hong Kong. Our biggest Asian market, though, is the Philippines.
"Getting into Asia is challenging. The tastes in music vary greatly per country, so we have built up an editorial team to meet this need. We needed to get the price right too. In Singapore it's US$8 a month, in the Philippines it's US$3. A mobile strategy is absolutely the way to go. It is customer-focussed, provides music at your fingertips wherever you are, whatever you are doing. 'Freemium' works too –allowing users to try for free. Overall, 20% of free users become subscribers."
In terms of promoting mobile concepts, Asif R. Khan, Founder and President of the Toronto-headquartered Location Based Marketing Association, advised retailers to engage in conversation, rather than to simply sell. He said: "Don't just do mobile – think mobile in conjunction with other avenues. The retailer's conversation has to be consistent across all platforms.
"Mobile uniquely provides a bridge between the online and real world. Mobile is intimate; it's something you carry everywhere, or these days, something you wear. Mobile is not about the buy. Mobile is about the buy and tell. Let the customer tell wherever he likes to. And continue the conversation there.
"Location marketing is at the intersection of places, people and media. Some 85% of all data now has some location content. That makes location the new 'cookie', providing information about where the customer is and what he's interested in. I see the future as one where we will derive different data sets from different sensors, data which will be mined to fine-tune marketing plans."
Data mining was also a key part of a presentation by To Himanshu Jha, Head of Data Solutions (Business Intelligence) for Yahoo Asia-Pacific. He said: "Over the past few years, four trends have transformed data analytics. Firstly, there are new data sources, such as searches, and data from tablets and mobiles. Then there is the need for speed. In the past, data took so long to analyse, it was not used for current programmes. Now, data must be analysed quickly to be actionable instantly.
"Thirdly, there are new metrics to consider – user behaviour on social networks, searches, what's trending? What's the response after a product launch? What are people saying? Lastly, innovation in traditional customer analytics, as well as new behaviour to analyse, have resulted in fresh insights that were previously not possible."
Perhaps the proceedings were best summarised by Mark Hukill, a Consultant for the Pacific Telecommunications Council, who identified a number of particular challenges for the telecoms industry. He said: "Just how customer-centric are you? Just how social is your media? What are regulators going to do when the network becomes ubiquitous? And how will IoT affect human behaviour? I see the second half of this decade as being transformative for the industry and for society as a whole."
CommunicAsia 2015 took place from 2-5 June at the Marina Bay Sands in Singapore.
Ronald Hee, Special Correspondent, Singapore