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Global players need to capitalise on Asia-Pacific opportunities

The low penetration in Asia-Pacific is due to its broad, diverse and fragmented make-up

The low penetration in Asia-Pacific is due to its broad, diverse and fragmented make-up

Global telecoms service providers need to strengthen their efforts in the Asia-Pacific region to make the most of the opportunities available, according to research firm Ovum.

David Molony, principal analyst at the firm, said that the total value of deals announced by global telecoms providers in the second half of 2010 was $16.86bn, but only three per cent of this figure was business won in Asia-Pacific.

“The big five US and European-owned global service providers have woken up to the new business opportunity the Asia-Pacific region offers them. However, while they have won their first notable contracts there, they are only scratching the surface of the market,” Molony said.

He explained that the low penetration in Asia-Pacific is due to its broad, diverse and fragmented make-up, which has meant that it has been difficult for global providers to ensure continuity and quality of service, leading companies in the region to turn to local suppliers.

“In effect, businesses have become used to using local and national suppliers, who also enjoy more regulatory protection in their markets,” said Molony, “But above all, with the exception of Japan and Australia, the region has not grown as many global multinational corporations (MNCs) as America and Europe.”

“However, that is changing, and there will be significant new demand out of the region for global telecoms service providers to target.”

Molony added that the market is calling out for a global provider to take the plunge and invest heavily in the region, and claimed that any such boldness would be met with reward. “There’s not been a single regional service provider in Asia-Pacific, No-one has built an extensive network in the region,” he said.

“Telstra and NTT have made headway in various pockets of the region, AT&T and Verizon have begun and have relatively small operations, and China Telecom, Reliance and Tata Communications have strong presence, but only in specific markets. Tata is well placed to become a regional provider but is instead casting its eye towards Western Europe and US markets, despite being based in the region.”

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