A-P broadband operators seek business models

The Asia-Pacific region (excluding Japan) is adding 30,000 broadband Internet subscribers every day, but the market is still in its infancy and operators have yet to decide on profitable business models, according to Etienne Charlier, vice president of sales support and marketing for Alcatel SA's broadband networking division in Asia-Pacific.

Operators still need to find a way to exploit the corporate demand for broadband services as well as demand from residential subscribers, Charlier said, speaking at the International Data Corp. (IDC) Asia-Pacific Telecoms forum here Wednesday.

"There is a long way to go in Asia's broadband Internet market and there is clear potential, but it is not always that simple to get quick returns," he said.

From the consumer side, broadband penetration even in the region's advanced markets is well below the 25 percent to 30 percent seen as a likely maximum for the current generation of services. In Japan, only 9 percent of Internet subscribers are using broadband, 14 percent in Singapore, 17 percent in Taiwan and 24 percent in Hong Kong. Korea, which has discovered a killer broadband application in Internet gaming, has the highest proportion of broadband subscribers at 29 percent, according to Charlier.

But with 90 percent of broadband subscribers being residential users, there is also a significant opportunity for attracting business customers, especially the large number of SMEs (small and medium-sized enterprises) in Asia, Charlier said. The value of business customers is typically many times higher than that of residential customers, but operators will need to develop a range of services for the corporate broadband market. These include:

-- service packages combining voice, data and videoconferencing;-- branch office connectivity and LAN interconnection;-- business-to-employee (B-to-E) teleworking packages;-- vertical business services including agreement with ASPs (application service providers) and software companies.

Larger companies, which may want to use broadband to conduct electronic business with groups of suppliers, will also need technologies such as frame relay and leased line on DSL (digital subscriber line), voice over DSL and G.SHDSL, the new International Telecommunications Union (ITU) standard for high-speed symmetric DSL.

"There is demand for a variety of services, but the business models to support that are not easy," Charlier said. "Operators need to be ready to face exponential growth in the market."

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