Asia/Pacific Telecom Services Growth Predicted

SINGAPORE, May 17 -- Despite the problems facing the overall telecom industry, the Asia/Pacific (including Japan) fixed telecom services market will continue to show modest growth over the next five years, according to market researcher Gartner Dataquest.

Gartner Dataquest analysts said that after suffering a decline of 4.5 percent in 2001, Asia/Pacific fixed telecom services revenue will increase to $111.6 billion in 2002, up 1.8 percent from 2001, and that the industry will continue to experience single-digit growth rates through 2006, when the market is projected to total $136.8 billion.

Telephony still contributes about 75 percent of the Asia/Pacific fixed telecom services revenue. While usage volumes have gone up, revenue dropped 9.3 percent because of severe price competition, tariff rebalancing and increasing deployment of voice-over Internet Protocol. Gartner Dataquest analysts said future growth will be flat.

"Asia is facing the same problems western countries faced several years ago when prices plunged as a result of liberalization. If it had not been for local call services, telephony revenue would have taken a severe beating," said Chee Eng, principal analyst for Gartner Dataquest's Asia/Pacific Telecom and Internet research group.

In contrast, data services, including Internet and public IP services, is growing strong. It already accounts for 24 percent of the total market, and this is expected to increase to 35.6 percent by 2006. Total data revenue is expected to hit $49 billion in 2006.