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The challenge of m-commerce, the rise of BYOD and Myanmar joins the wired world: CommunicAsia 2013

Photo: CommunicAsia 2013: 2,044 exhibitors under one roof for the first time.
CommunicAsia 2013: 2,044 exhibitors under one roof for the first time.

This year CommunicAsia took "Enhancing User Experience, Monetising Content" as its theme and it proved a more than apt clarion call for an event that combined BroadcastAsia, EnterpriseIT, SatComm, and the Creative Content Production Conference. This year, as many exhibitors were only too keen to testify, the connected customer was truly acknowledged as king.

Time and again, the feeling was that today's highly mobile consumers want to bring their own devices to the office, while constantly consuming content and generating huge amounts of data everywhere they go. Voice and SMS are so last century; it's now all about social media, chat apps, and anywhere, all-the-time connection. Standard notions of TV viewing are obsolete; it's all about TV when-you-want-it, with on-demand access through multiple devices. Suresh Sidhu, Chief Operations Officer of Celcom Axiata, one of Malaysia's longest-established mobile operators, is one such evangelist. He says: "The days of telcos charging one cent for one second of usage are over."

The numbers are staggering. According to Gartner, the international technology research company, some 226 million mobiles were sold across Asia in Q1 this year. Overall, the region as a whole now enjoys a penetration rate of 72%, representing some three billion users. Of these, China alone accounts for nearly a third. The figures also show that Asians are prone to talk less and download more. According to IDC, the American IT market research specialist, the region will see only flat-to-anaemic growth in voice traffic up until 2016. By contrast, Cisco Systems, a leading California-based networking supplier, predicts that mobile data traffic in Asia will rise from 310,000 terabytes per month to a stunning 5.5 million terabytes by 2017, accounting for 47% of the world's data traffic.

Nick Nindra, Director of Asia sales for Pacnet CDN, a Hong Kong and Singapore headquartered network and data centre supplier, is far from surprised by the figures. He says: "Asia has the world's largest digital population. Some 44.8% of the world's Internet users are now in Asia, with growth over the past 12 years that is nearly double the rest of the world."

As well as China now having the world's largest Internet population, Hong Kong, Japan, Singapore and South Korea now lead the world in mobile broadband penetration rates, with some of the continent's developing countries, notably Myanmar, likely to skip a generation in terms of technology.

Myanmar is considered the last, truly untapped market in Southeast Asia. Its population of 55 million people has only 1.3 million mobiles and there are only 400,000 Internet users. The country awarded two new mobile licenses last month (to Norway's Telenor and Qatar's Ooredoo), following a tender that attracted 91 submissions. The two winning companies have now been tasked to deliver a fixed and mobile penetration of 75% by 2016. Commenting on the change, Nindra says: "Networks are under strain due to this explosive growth. Networks need to collaborate to provide more cost-effective delivery of content, with greater reach and better web performance."

A note of caution, however, is struck by Abu Saeed Khan, Head of the Association of Mobile Telecom Operators in Bangladesh. He says: "The wholesale cost of Internet bandwidth in Asia is six times higher than that in Europe, so how can mobile broadband grow in the region? The reason behind this cost is an over-reliance on submarine cables. Asia must adopt far more terrestrial connections to bring down these costs."

One answer may be satellites, at least according to Drew Brandy, Vice President for Enterprise Industry, at Inmarsat, a British satellite communications company. He says: "Asia Pacific represents huge opportunities for Inmarsat, due to the growing demand for reliable satellite services in sectors such as maritime, energy, mining and the media. We will be launching our new BGAN High Data Rate service between Q4 2013 and the end of 2014. This will provide the first truly global broadband satellite network."

For Karim Temsamani, Google's Head of Asia Pacific Operations, high-tech is not the only element shaping Asia's digital future. He says "It's not the technology, it's not the platform, it's the people of Asia that are driving change. In Japan, 78% of smartphone users use their mobile every day, compared to 58% in the US. Similarly 50% of Indians say they would rather give up TV than their mobile, which is probably also true of most other Asians.

Photo: Getting connected: 2013 delegates and visitors at the Singapore event.
Getting connected: 2013 delegates and visitors at the Singapore event.

"Currently, two-thirds of the world still has no Internet access. Of this number, half are from just six Asian countries – Bangladesh, China, India, Indonesia, Pakistan and the Philippines. There's going to be 500 million new Internet users over the next couple of years. Most of them will be from Asia and almost all will be accessing the Internet via their smartphones. The way they use the Internet will be very different from those coming from a PC base. Yet most companies and governments do not have a mobile presence. In India, only 1% of its 47 million small businesses have a mobile presence."

Temsamani's concerns over the lack of mobile readiness are shared by Philip Yen, Mastercard's Group Head of Emerging Payments for Asia/Pacific, Middle East and Africa. Citing his company's Mobile Payments Readiness Index, he says: "Singapore is the world's most m-commerce ready nation, with South Korea the only other Asian country in the top five. Despite this, more than 50% of respondents in China, India and Thailand say they have bought something on their mobile, possibly because they are skipping using the PC.

"Hong Kong ranked 15th overall, possibly because its smartphone market has been dominated by the iPhone, which currently does not support Near Field Communications. There has not been a market-wide service that allows consumers to load card details onto their phone, similar to that established by the IDA [Infocomm Development Authority] in Singapore. Hong Kong residents appear to have a greater affinity for shopping in physical stores, wanting to touch and feel the merchandise, a factor that might also have contributed to lower consumer willingness to shop on their mobile devices."

Photo: Grass Valley, a regular BroadcastAsia exhibitor from the US.
Grass Valley, a regular BroadcastAsia exhibitor from the US.

Changes are also afoot on the broadcast front, with streaming TV already outpacing pay TV. In the US, in Q1 this year, Netflix grew to 29 million subscribers, outstripping the cable veteran HBO for the first time. This is a sign of things to come, according to Charlie Dunn, Senior Vice-President of strategic accounts at Grass Valley, a US-based digital-broadcast solutions provider. He says: "Netflix has created its own content, bringing back Arrested Development which had been cancelled by its network. New competitors are now coming in, such as Amazon, while YouTube has started charging for its best channels. Apple is also strongly rumored to be entering the field soon."

It is this streaming model that many now expect to dominate in Asia. Fedor Ezhov, Chief Operating Officer of SPB TV, a mobile television services provider, says: "In 2012, for the first time, sales of TV sets fell. The mobile and the tablet are now replacing the TV. While paid subscriptions still work best in North America and Europe, in Asia we expect streaming TV to benefit from targeted advertising and subscriptions, with the best way to engage an audience being to provide them with a mix of free and premium content. Viewers don't like ads and, in many markets, they like paying for content even less."

The other notable development this year is that users with their own connected devices now insist on using them in the office too, a trend called Bring Your Own Device (BYOD). In Q1 this year, IDC, reported that, for the first time, more smartphones (216 million) were shipped than basic or feature phones. The research group further projects that 190 million tablets will be shipped this year, compared to just 205 million notebooks.

Photo: Broadcast broadside: new technology unleashed at this year's event.
Broadcast broadside: new technology unleashed at this year's event.

These findings are echoed by the management consultant McKinsey & Company. Samba Natarajan, a partner at the company, says: "By 2014, 40% of smartphones and 30% of tablets will be used in the office. Gen Y workers want to use their own device at work, so much so that they are willing to work in a company that pays them less."

This preference, though, has sparked some concerns about security. Sugiarto Koh, ASEAN and North Asia Regional Director for Sourcefire, a US-based network security provider believes, companies should start talking precautions now. He says: "People prefer to carry just one device with them. This means personal and corporate data get mixed. There's the problem of security, with these devices easily lost or stolen, as well as data migration when people change devices. There is also the question as to how to deal with the data when the person leaves. For all of these issues, the cloud is key. With the cloud, you can split the data. Security is better if the data is on the cloud and not on the mobile. Then you can cut off access easily when required."

Gartner believes the value of cloud computing will grow by 18.5% this year, rising to US$131 billion worldwide. While the US and Europe will continue to dominate into 2016, the highest growth rates are expected to come from Asia (particularly China, Indonesia and India), and Latin America. For many, adoption of this new technology seems all but inevitable.

Photo: Sony: one of the international brands gathered at BroadcastAsia.
Sony: one of the international brands gathered at BroadcastAsia.

Rob van den Dam is the sector leader for global communications at the Institute for Business Value, IBM's research wing. He says: "By the end of this year, 90% of connected consumer devices will have cloud integrated into them. For the broadcast and media industries, this means challenges and opportunities. The key is to identify content attractive to the customer and engage them in real time. The cloud offers cost flexibility, business scalability, market adaptability, and 'hides' complexity from the end user."

This year, CommunicAsia and BroadcastAsia were both held under one roof for the first time. The event was opened by Dr Yaacob Ibrahim, Singapore Minister for Communications and Information and attracted 2,044 companies from 56 countries, as well as 50,000 attendees. There were 33 national pavilions (including four from China alone), with Hungary participating for the first time.

CommunicAsia and BroadcastAsia 2013 were held at the Marina Bay Sands in Singapore from 18-21 June 2013.

from special correspondent Ronald Hee, Singapore

Content provided by Picture: HKTDC Research
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