China the biggest DSL market as A-P telecoms rebounds

China will become the world’s largest Digital Subscriber Line (DSL) market in 2004 as Asia-Pacific’s investment in telecommunication infrastructure rises for the first time in five years, according to a report released Tuesday by Gartner Inc.

After years of cost-cutting, carriers will be looking at growth this year, especially in new technologies which can combine voice and data services, and new services such as new high-speed data and video services, Gartner said.

Gartner expects investment in this year to be about nine per cent higher than in 2003, although this leaves it 11 per cent lower than the record investment in 1999.

Gartner’s other predictions for the Asia-Pacific telecommunication market in 2004 include:

— Asia-Pacific will add 125 million phone connections this year, taking the total connection figure to 1.1 billion. Two-thirds of these new connections will be mobile connections and the combined revenue from mobile and fixed services will reach US$17.1 billion, seven per cent higher than in 2003.

— China will become the world’s largest DSL market in 2004, ahead of Japan, the U.S. and South Korea. Carriers are offering prices as low as US$6 per month to stimulate demand for broadband, and China is the fastest-growing major broadband market in the world. According to the China Internet Network Information Center (CNNIC), China had 17.4 million broadband Internet subscribers at the end of 2003, compared to 6.6 million subscribers one year earlier.

— Third-generation (3G ) mobile services will not take off in Asia-Pacific (excluding Japan) in 2004. 3G Wideband CDMA services have failed to show a clear advantage over cheaper standard mobile services, and W-CDMA penetration in Asia-Pacific (excluding Japan) will reach 1.4 per cent in 2004, and 10 per cent in Japan.

— The size and growth of the Chinese mobile phone market will propel one of its handset vendors into the world’s top 10 manufacturers this year. Chinese manufacturers accounted for 38 per cent of the market in 2003, and over 70 million handsets will be sold in China in 2004.

— IP telephony will take off in Asia-Pacific in 2004, with half of all new fixed telephone lines for enterprises being pure IP rather than just IP-enabled as companies replace aging PABX systems.

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