Fig.1: Mobile subscription is set to increase at a compound annual growth rate
The Ericsson Mobility Report, published in June, presents a market overview of mobile broadband and smartphone availability in Southeast Asia and Oceania. Find the key takeaways below:
- Smartphone subscriptions are expected to increase at a compound annual growth rate (CAGR) of 15%, up until 2021 (See Fig.1).
- The rise of mobile broadband is due to smartphone availability and popularity of data intensive apps (leading to a competition of data driven bundle deals by Thai mobile carriers).
- Mobile broadband growth has the potential to trigger an entirely new wave of growth across Southeast Asia, opening up opportunities for innovation in apps and services
Fig.2: Line is the most popular app in Thailand, whereas other countries in the region prefer the Facebook trifecta.
Unlike Whatsapp, Line users in Thailand are able to do more than messaging on the app. Line offers payments, branded content through mobile marketing and has now branched out to food delivery. This would explain the app’s popularity in the country, whilst Whatsapp remains the go-to choice for smartphone users in Malaysia, Indonesia and Singapore.
Smartphone Use In Southeast Asia
Ericsson also reports that in Malaysia and Thailand, almost half of smartphone users access social networking, instant messaging and online videos on a daily basis (40-50%), making the two countries very mobile driven. This focus on mobile leaves a lot of room open for mobile commerce opportunities, from payment platforms to shopping (see Fig.3)
Fig.3: Thailand and Malaysia has the most daily users of social networking apps
When it comes to the profiles of daily smartphone users, there are differences between countries. However, there is an overrepresentation of users who are young and educated from a regional level.
Fig.4: Currently, Wi-Fi has the larger share of overall smartphone traffic
Southeast Asia’s mobile broadband and Wi-Fi data traffic on smartphones continues to grow. User generated data shows that all markets in the region experienced increases in average data traffic per user for mobile broadband and Wi-Fi. Leisure time apps, such as games are not necessarily data intensive but are often accessed from home, this also contributes to Wi-Fi growth.
Mobile Subscriptions in Southeast Asia
Fig 5: Indonesia leads the way in mobile subscriptions
- Singapore, Malaysia and Thailand are expected to have more than 100% mobile broadband subscription penetration by the end of 2016.
- Mobile subscriptions in the region will grow annually at 4% between 2015-2021, totaling to 1.2 billion by the end of 2021.
- Mobile broadband services are foreseen to account for more than 90% of total mobile subscriptions in the region by the end of 2021.
Although fixed broadband subscription penetration is still low in emerging markets, compared to mobile broadband, the region has been seeing a growth in middle income households that should contribute to the rise in demand or high speed broadband services in residential areas. This is particularly true in Thailand, Indonesia, Philippines, Vietnam and Malaysia.
Mobile broadband will still be the main form of broadband access for the majority of people in the emerging markets of Southeast Asia. This opens up a window of opportunity for operators to fill the need for home broadband.
Network Performance In the Region
Communications is increasingly becoming more app centric, with video streaming to be accounting for almost 70% of all global mobile data traffic by 2021. The increasing popularity of video streaming services on smartphones is driving innovation in video compression and display technology. In order for videos to be fully utilized, a high speed network is much needed.
High expectations will continue to be placed on network performance. This should be challenging for developing countries. As mobile connectivity grows, network connectivity should be experiencing similar rate of growth in order to facilitate innovation.
Download the full Ericsson Mobility Report, June 2016, here.