Telco industry in AP face adjustments, says IDC

By Staff, ZDNet Asia
Friday, January 20, 2006 04:02 PM

SINGAPORE--The telecoms market in the Asia-Pacific region is poised to witness some game-changing technologies and services this year, according to IDC.

Said Sandra Ng, vice president of communications, peripherals and services research at IDC Asia-Pacific: "Changing regulatory environments, coupled with disruptive technologies in the guise of Skype, will cause many industry players to go back to the drawing board."

Among the top predictions in the telecoms market made by Ng is the evaluation of the consumer VoIP (Voice over Internet Protocol) market by operators. She said this is spearheaded by non-operators moving into IP telephony, such as eBay’s acquisition of Skype, Microsoft’s purchase of Teleo, and the re-sale of Skype services by operators and service providers.

Ng also pointed out that regulatory issues pertaining to "triple play" services comprising voice, video and data services, will crop up this year as government agencies ponder over who should regulate services such as IPTV. In addition, operators looking to offer "triple play" services this year will need to evaluate current network architectures and make changes to ensure the provision of adequate bandwidth and high quality of service, she added.

Although the Asia-Pacific region saw little or no take-up of VPLS (virtual private LAN services) in 2005, IDC expects 2006 to be different--especially among mid-sized enterprises, said Ng.

She noted that VPLS is expected to be a strong alternative to both frame relay and IP-VPN services. However, the downside for operators is that VPLS offers customers the opportunity to easily set up and manage their wide area networks (WANs). Ng explained that as operators are seeking new revenue opportunities by managing more of customers’ local area networks (LANs) and WANs, VPLS can be seen as a step back from this approach.

IDC also predicted that smart phone shipments will make up almost 7 percent of all mobile phones by year-end. As more companies embrace enterprise mobility, antivirus software will soon become a must-have for all smart phones and other converged mobile devices.

Ng also reckoned that telcos would be the "disruptive force" in the managed services arena, a market long dominated by IT service providers. Faced with the onslaught of disruptive technologies and declining revenue from traditional telecoms services, telcos will re-brand themselves as ICT (info-comm technology) service companies, bundling value-added managed services into connectivity contracts with their enterprise customers, she noted.

Ng predicted the revival of mobile commerce as well. With various payment modes using technologies such as infrared, text messages, interactive voice response, mobile scan, and contactless chips, the mobile phone is becoming a replacement for petty cash, debit and credit cards, with payments charged either through the mobile phone bill, or even directly to a bank account, she said..

In fact, she said that mobile commerce took root several years ago but so far, it has been an overly ambitious goal of the industry. However, with an expanding ecosystem, the increasing pool of applications developed and a rising acceptance of such modes of payment, IDC expects the market to begin to take root, beyond the leading adopters of Korea and Japan.


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