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‘New category’ of mobile internet emerges in Asia

Reuters/ AFR | July 24, 2013
Telcos, handset makers and content providers are buckling up for a bumpier ride as growth shifts to emerging markets, primarily in Asia.

"The spike in usage seems to happen when the user moves to a smartphone - any smartphone," he said. "These users are by far more active than users on a feature phone." Viber is seeing its fastest growth and highest usage in Vietnam, Pakistan, Myanmar and many African countries.

What's surprising those behind the services that ride on top of these networks is the speed of take-up - even if the networks aren't that good. In India, for example, 3G coverage is spotty and largely confined to bigger cities, said BitChemy's Singh.

When serial entrepreneur S. Mohan co-founded Bollywood streaming site Spuul in Singapore, for example, he expected India to be about five years behind the diaspora in more developed countries in using the service. "I was surprised by the timing in India," Mohan said. "I was told it would take longer to become aware about streaming, that there wouldn't be enough WiFi or 3G. But I found that if you have a smart device you were hungry for content."

In China, it's services like Tencent Holdings' chat platform WeChat, which has more than 300 million users, American Idol-like shows such as The Voice of China and games like online mahjong which are spurring demand.

But bottlenecks remain.

Poor network coverage or the high cost of 3G access relative to phone and SMS services still hold many users back. Last year, according to market research firm Euromonitor, 62 per cent of all mobile phones sold in China were smartphones, but only 16 per cent of subscribers had access to a mobile Internet connection.

The three carriers - China Mobile, China Unicom and China Telecom - typically dole out billions of dollars of handset subsidies to entice users to subscribe to their networks, dragging down profit margins.

Elsewhere, operators in the Philippines are experimenting with subsidies at the lower end, while in India the handset makers are trying to stimulate smartphone adoption. Apple offers installment plans for its iPhone, while Micromax bundles several free months of data together with a handset.

As the industry matures, phone and tablet makers will have to settle for smaller margins and lower prices, says Joe Nguyen, Singapore-based analyst at internet metrics company comScore.

"At the end of the day these are utility devices much like the PC was."


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