2006 South Asian Mobile Communications and Mobile Data Markets

This annual report offers a wealth of information on the Mobile Communications and Mobile Data markets in Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka. Subjects covered include:

Overview, Regional Characteristics, Growth and Market Structure
Mobile Technologies - GSM, CDMA, PCN/PCS
Mobile Services - Prepaid, fixed-mobile convergence, gaming
Mobile Data - Market Overview, SMS, MMS, PoC, GPRS, WAP
Overview on 3G
Mobile Satellite Services

Afghanistan In 2003, the second GSM mobile service in the country was launched, while another two mobile licences were issued in September 2005. By end-2005, the mobile subscriber base had reportedly reached about one million (approaching 4% penetration). In the meantime, the government, in a push to develop the fixed-line network, launched what it called the Local Fixed Service Provider (LFSP) program. This program was expected to see hundreds of small-scale investors set up companies at the village or provincial level using Wireless Local Loop (WLL) technology.

Bangladesh, ranks among the most densely populated countries on the globe, but its fixed-line teledensity remains the lowest in South Asia. With teledensity at less than 1%, only a relatively small proportion of the population has had access to any telecom facility. Almost 99% of homes lack a telephone and there is a four year waiting list for a fixed-line service. The situation is worse in the rural villages, with more than 90% of Bangladesh�s telephone services located in urban areas. The overall situation in Bangladesh has been improved to some extent by a rapidly expanding mobile market. But after a number of years of strong growth (138% in 2005), mobile penetration was still only a little over 5% (7.5 million mobile subscribers) at end-2005, compared with close to one million fixed-line telephone services.

Bhutan A country that preferred to remain isolated from the world from a long time, Bhutan has very recently started to improve its telecommunications capability. To do so it has had to overcome the country�s mountainous landscape. Whilst the country had a basic connection to the outside world as early as 1974, with the introduction of trunk calls between Bhutan and India, it was not until 1999 that television, satellite dishes and Internet services started to appear. The tiny country proceeded to invest relatively heavily � to the tune of around US$27 million - in telecommunications infrastructure between 1996 and 2002 to provide the country with a modern fixed line network. In late 2003, the country�s first mobile service was launched by Bhutan Telecom (b-mobile) and by early 2006 was claiming almost 40,000 subscribers, giving a mobile penetration of less than 2%.

After a late start, Bhutan has been cautiously embracing the Internet. The Bhutanese Government and the United Nations Development Program (UNDP) signed a project agreement in March 1999 to support the development of DrukNet, the country�s first Internet Service Provider (ISP). There were an estimated 5,000 Internet subscribers in the country at end-2005.

Accurate statistical information on Bhutan is difficult to obtain; there is even a huge variation between sources on what is the country�s population.

India India continues to be one of the fastest growing major telecom markets in the world. Sweeping reforms introduced by successive Indian governments over the last decade have dramatically changed the nature of telecommunications in the country. The mobile sector has grown from around 10 million subscribers in 2002 to 80 million (including both GSM and CDMA services) by early 2006, aided by a mix of higher subscriber volumes, lower tariffs and falling handset prices. Whilst GSM technology remains the dominant technology platform in the market, CDMA has quickly grabbed a 23% market share. Despite the huge mobile subscriber base, this represented only around 8% of India�s one billion plus population. Clearly, the mobile industry should continue its strong growth. The country�s telecom regulator, the TRAI, says that the rate of market expansion would increase with further regulatory and structural reform. The adoption of Unified Licensing, a change in the Access Deficit Charge regime, increased sharing of infrastructure and coverage of new areas by operators will contribute to ongoing growth.

The Maldives The Maldives, with its relatively small population of 300,000, can rightly claim an efficient, up to date national telecommunications system, despite it being spread of a large archipelago of islands. Dhiraagu, the country�s monopoly telco, has invested considerable effort to ensure that there is now a complete and effective telephone service covering the whole country. As well as operating the fixed-line network, the company has also been operating an extensive mobile service and is an Internet Service Provider (ISP). Dhiraagu�s monopoly was officially set to run out in 2008, but the government was keen to open up the market earlier than that and this was starting to happen progressively. The licensing of a second ISP in 2002 signalled that the government was already moving on its plans to open up the market ahead of time. Dhiraagu has responded by increasing its product range and improving its customer service.

Then, in 2004, a second mobile licence was issued, again resulting in the incumbent moving quickly and aggressively to increase its presence in that sector of the market. The new operator, Wataniya Telecom, launched its service in the second half of 2005 and by December had signed up 50,000 subscribers. The rapid roll-out continued and by March 2006 its subscriber base was approaching 60,000. In the meantime, Dhiraagu was not standing still; it had increased its subscriber base to 164,000 by March, having managed to grow by 23% over the previous 12 months. The overall market had reached an amazing 67% penetration.

Nepal Nepal is among the poorest and least developed countries in the world. Amid what has been an unsettled political climate that erupts as a major problem from time to time the country has been moving steadily towards a more liberalised telecom market. Positive regulatory changes in the telecom sector have been implemented, including the incumbent telco losing its monopoly status in the market. By April 2006, over 170 operators had been authorised to provide a wide range of telecom services, including two for basic telephony and two for mobile telephony. Mobile services are provided in the country by two operators - Nepal Telecom and newcomer Spice Nepal. With Spice providing some serious competition to the incumbent, the total mobile subscriber base had reached 600,000 by March 2006, a penetration of just over 2%, after the market had expanded by 100% in 2005.

Pakistan After a period in which the country slowly transitioned from one dominated by a regulated state-owned monopoly to a comparatively deregulated competitive structure, Pakistan�s telecom sector had finally begun moving and looked set for an era of phenomenal growth. Pakistan�s mobile sector, which had started to grow strongly over the last few years, continued its rapid expansion. After growing by almost 170% in 2005, the mobile subscriber base had reached 22 million (14% penetration) in early 2006.

The government�s reform plans were being progressively implemented and this is certainly starting to have some impact on the market. The country�s four mobile operators have been joined by two new operators - Warid Telecom and Telenor Pakistan - following a decision by the government to issue two additional mobile licences. By end-2005, after less than 12 months operation, Telenor had 1,870,000 subscribers and Warid Telecom claimed 2,070,000. An important aspect of reforming the telecom sector was the privatisation of PTCL (Pakistan Telecom). In June 2005, the UAE operator, Etisalat, submitted the highest bid of US$2.6 billion for a 26% stake in PTCL. Despite lodging the winning bid, the acquisition took a further six months to complete after a dispute over payment terms arose almost jeopardising the sale.

Sri Lanka's Sri Lanka has been demonstrating considerable determination in its efforts to develop the country despite its ongoing political problems. With a modern progressive telecommunications sector high on the list, the sector looks to be well positioned for vigorous growth. The country�s fixed-line teledensity was approaching 6% and mobile penetration was over 17% in early 2006, with annual growth of the mobile sector running in excess of 50%. At the same time, the strong growth looks very much like it was set to continue.