IDC: China, Taiwan to be Asia’s next broadband stars

China and Taiwan will see a rapid growth in the number of broadband Internet access subscribers and will begin to challenge South Korea, currently the largest broadband market in Asia-Pacific (excluding Japan), according to research released by IDC Wednesday.

South Korea has nearly 10 million broadband subscribers out of a population estimated at 48 million and the broadband market is reaching saturation with a 21 per cent penetration rate, according to IDC.

China had around three million broadband subscribers in 2002, out of a population of 1.28 billion, a relatively low penetration rate of 0.2 per cent.

By 2007, South Korea and China will have around 18 million subscribers each, representing compound annual growth rates (CAGRs) of 12 per cent in South Korea and 55 per cent in China.

Taiwan’s subscriber base will rise at a CAGR of 25 per cent from two million now to 6 million in 2007, giving it the third largest broadband subscriber base in Asia-Pacific. Other broadband markets with over two million subscribers in 2007 will emerge in Hong Kong, Australia and the Philippines, IDC said.

Digital Subscriber Line (DSL) is the preferred broadband technology in Asia-Pacific with a 60 per cent market share and the large telecommunications companies being key providers of the technology. Cable modem subscribers account for 28 per cent of subscribers and optical-fibre metro Ethernet accounts for eight per cent. Metro Ethernet will gain market share at the expense of cable through 2007 when it will account for 19 per cent of the subscriber market, according to IDC.

Broadband providers are looking to increase average revenue per user (ARPU) with new services such as voice over broadband telephony, Internet protocol-to-virtual private network connectivity, videoconferencing and security applications.