Progressive broadband markets in Asia- Pacific

Excerpt from "Convergence in Developed AsiaPacific: Operator Strategies Move beyond Bundling to VAS" by Asia Pacific Insider Report (August 2013)

Executive summary: Progressive broadband markets in Asia- Pacific move beyond basic bundling

Advanced broadband markets in parts of Asia-Pacific show high adoption of fiber, multiplay and 3G+, setting the stage for convergence. Operators are looking to take advantage of convergence to reduce churn and introduce new value-added services.

Cloud and multiscreen access are becoming standard elements of bundles, providing access to content across a wide plethora of devices.

Smart living provides a next step beyond cloud and multiscreen VAS: 

• Home hub device penetration is increasing, and provides a portal to a range of services;
• Healthcare, surveillance and home automation provide new revenue opportunities for established players.

The Convergence in Developed Asia: Operator Strategies Move beyond Bundling Insider presents case studies on Chunghwa, NTT, PCCW, SingTel, StarHub and Taiwan Mobile, and examines how these different operators are approaching convergent offers.

Key findings

 Developed markets in Asia-Pacific, such as Australia, Hong Kong, Japan, South Korea, Singapore and Taiwan, have some of the highest rates of broadband service penetration, including for LTE, FTTB/H, household broadband and multiplay. Many operators in these markets are therefore moving beyond bundling strategies in order to develop new revenue streams.

 Bundling has become a fundamental part of all broadband operator propositions. Challenger operators tend to offer very attractive discounts in order to expand their customer base, while larger incumbents offer smaller discounts but highlight their reliable high-speed networks and broader coverage and more often differentiate themselves with value-added services. Furthermore, quadruple plays and the addition of mobile services to bundles are also becoming more important, while pricing and content strategies are being used to address specific market segments to boost overall adoption.

Value-added services such as cloud storage and multiscreen access are becoming standard components of broadband bundles. Most operators include some volume of cloud storage as part of their bundles, enabling different devices to access content. We believe that more and more operators will start charging for cloud storage as demand for data storage increases in line with multimedia usage.

 Very advanced operators such as PCCW and NTT are moving rapidly into the smart living space. This includes services such as healthcare, surveillance and home automation. Personal health monitoring devices are being used by NTT and PCCW to address the smart healthcare opportunity, while Chunghwa and PCCW are pushing home hub devices to increase their revenue opportunity and offer new types of services.

 Smart living services are a long-term opportunity requiring a commitment that will take time to provide a return. As such it is not a priority opportunity for all operators to pursue, particularly smaller challengers and operators planning to invest in markets with different levels of development.