Governments to spend big on broadband future
Updated
Asia's biggest telecommunications trade fair is underway in Singapore this week with hundreds of new gadgets and software vying for people's attention.
And in a closed door conference, industry leaders will be discussing how to move ahead with broadband technology and what role governments will play.
Presenter: Karon Snowdon, finance correspondent
Speaker: David Kennedy, research director, Ovum (IT consultancy)
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SNOWDON: With everything from satellite communications, smartphones, and mobile movies on display, and up for discussion, the next few days in Singapore will draw some of the world's major IT players.
A closed meeting to discuss how to deliver the next generation of broadband services will attract operators, regulators and governments from around the region.
In Australia, the government has started headhunting for a team to lead its US$34billion rollout to bring 90 per cent of the population into the high speed internet age.
After dumping Telstra from participating, it's still to decide how the national network will be financed and operated.
Business users and remote communities are demanding urgent improvements to a system not up to 21st century standards.
David Kennedy, a research director at Ovum, a global IT consultancy says Australia is not alone in having broadband problems.
KENNEDY: For example, economies like Taiwan, New Zealand, markets which are fairly highly developed, but where there is still quite a bit of investment still to go into broadband networks.
SNOWDON: And then there's mobile broadband - the potential of wireless connectivity and smartphones, using mobile phone towers, is accelerating.
David Kennedy says mobile and fibre networks are increasingly complimentary.
KENNEDY: People want to remain connected, when they are not actually sitting at home and when they are not at their desk at work, and that's where mobile broadband really shines. So, we think there is actually going to be a growing market for both kinds of broadband.
SNOWDON: And the mobile broadband is proving very popular in Asia. It's growing quite remarkably there, isn't it?
KENNEDY: Absolutely, in fact, it's growing so quickly that the underlying networks are actually starting to strain a bit, carrying all of the data that's being generated by these new devices and services. And, in fact, that is one of the things that the conference is going to be looking at, how operators and governments can finance the sort of infrastructure spend that's going to be necessary to support the growth of these two kinds of broadband.
SNOWDON: And what sort of solutions are being looked at to fund this massive expansion?
KENNEDY: Well, the trend we're seeing in the region is more and more government involvement in the construction of networks, we've seen this in Singapore and Malaysia, we've seen it in Australia and New Zealand. The real question, as elsewhere, is how in Australia will this actually be funded, and it's becoming increasingly clear that a substantial government subsidy of some sort will be required. It's pretty clear that the taxpayer and the government is back in the telecommunications industry in a very big way.
SNOWDON: The real growth area is the smartphone. Only available since 2007, it's the mobile phone that has multimedia and internet services.
Going against the trend for the total mobile phone market, which could decline by 4 per cent this year, Ovum expects smartphone sales to expand globally by almost 19 per cent, and that includes the high end 3G handsets.
It's a reflection of changing consumer tastes, the youth market, and because Asia appears less affected by the global economic slowdown.
The CommunicAsia trade fair will reflect the fierce competition to develop the latest gadget to challenge the phenomenal success of the iPhone.
KENNEDY: Asia seems to be something of a leader in the uptake of these new technologies. There is a lot of cache, I suppose you could say, in having the latest device and particularly in the youth market in Asia, that is quite a big deal and something that people are prepared to pay for.
