Asia Pacific has what it takes to bring broadband to consumers
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The Asia-Pacific region has the key elements in place to lead a second global wave of eCommerce, in which consumers will use their television sets to shop, bank and communicate electronically.

An Andersen Consulting study* found that digital TV represents an enormous and growing opportunity in Asia-Pacific and could help put the region at the forefront of the development of this medium and its use for eCommerce. The study looks at eight countries: China, Japan, Hong Kong, Taiwan, Australia, South Korea, Singapore and India.

A number of factors contribute to the area’s high potential, including higher rates of TV penetration than any other region in the world, and a substantial and growing broadband subscriber base already in place in some markets, according to the study.

“For the business world, digital TV marks the second wave of the eCommerce gold rush,” said Steve Snyder, managing partner for Andersen Consulting’s Asia media and entertainment industry group, “and is likely to have even more profound and wide-sweeping implications for business-to-consumer commerce than the Internet

Asia-Pacific, which has lagged behind Europe and the US in business-to-business commerce over the Internet, has some key advantages in this new eCommerce wave, Snyder said. “With high television penetration rates, extensive cable TV networks, strong growth in broadband internet penetration, and a youthful population, the Asia Pacific region is well positioned to carve out a leading role in a medium that will ultimately reshape the way the world lives, works and plays.”

Governments across the region are actively encouraging the development of digital TV by deregulating broadcasting and telecommunications industries and opening markets to competition.

The infrastructure required for the most advanced form of digital cable TV is rapidly being built across major markets in the region. The 470 million households connected to the region’s existing cable and satellite TV networks are more extensive than those in either the US or Europe. For example in China’s major cities cable TV penetration is close to 100%.

In addition, all major Asian countries have acquired domestic satellites to meet the rising demand for increased bandwidth for corporate data, and multimedia and Internet services. In the more affluent countries and cities, the telecom companies look to compete with cable via broadband entertainment offers as well.

The study describes Asia’s youthful population as willing to embrace new technologies and says businesses in the region, attracted by the high potential TV subscriber base, are ready to develop digital content and services.

Consumers in the region are likely to adopt digital TV in whatever form it is available. In the near-to-medium term, satellite is likely to be the most popular due to the limited reach of cable and telecom infrastructure today, but this is very likely to change dramatically in the next 18 to 36 months.’’

Several uncertainties surround digital TV, including the high initial cost of an integrated digital television set, consumer comfort level with buying goods and services via interactive TV, and the ability of broadcasters and content providers to create engaging and entertaining content.

If these barriers could be overcome, however, digital TV would fundamentally redefine how companies and consumers interact and do business in the future. Like the Internet revolution, the advent of digital TV would throw the market wide open in almost every service industry, creating opportunities for fast-moving, innovative firms to get way ahead of their competitors.

Companies who are the first to move in digital TV will achieve tremendous competitive advantages. These advantages include building a powerful brand franchise through customer mind-share, strong investor support, and positive responses from market analysts.

To succeed in the digital world, Andersen Consulting believes that content providers have three options:
• leasing a channel from a broadcaster to provide exclusive branded content
• providing exclusive company content to a third-party broadcaster channel
• providing non-exclusive content to develop services that help customers turn their homes into smart information hubs by integrating stand-alone services, and enabling them to meet needs for information, customer service, household purchases and financial planning investments in a simple, fast, cost-effective way.

Country highlights
• In China’s major cities, there is nearly 100% cable penetration, and Singapore has already cabled 99% of all homes in the country.
• In South Korea, cable operators are offering a range of advanced broadband services and enjoying greater up- take of services than their counterparts in many advanced economies.

* Riding the Next Wave: The Strategic Implications of Interactive TV and Broadband Services in Asia Pacific



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