1. Communications: Government and Business Practices in the Asia Pacific Region Khelia Johnson, J.D. Khelia_Johnson@ksg03.harvard.edu Future of Voice Workshop 15 January 2007 The Background Paper on the Asia Pacific Region

2. Objectives For each country:  Investigate the trend of declining APRU  Investigate the telecommunication market and services available  Highlight government strategies  Highlight business strategies For the region:  Analyze trends within telecommunication market  Compare government strategies  Compare business strategies

3. Hong Kong  Great deal of political independence despite being part of China  Extremely competitive and advanced telecommunications market  Independent and neutral telecommunications regulator  Open markets with transparent entry conditions  “Walled garden” approach to supply of content causes some concern Basic Telecommunication Indicators

4. South Korea  Technology savvy public  Government and business emphasis on creation of infrastructure  Broadband is fast and cheap  Emphasis on value-added service as subscriber saturation occurs in telephony and broadband  Feuding amongst regulatory agencies may interfere with market development Basic Telecommunication Indicators

5. Japan  Tokyo: the largest metropolitan area in the world,  U-Japan: the country’s vision of a ubiquitous telecommunication society  Focus is on the creation of the right regulatory environment  Strategic moves made through mergers and acquisition  Consolidation of power from mergers and acquisitions may cause antitrust concerns Basic Telecommunication Indicators

6. Australia  Strong mobile telecommunications market  Emphasis on value-added services  Lagging in fixed networks but an upgrade to a broadband fiber network is planned  Dial-up subscribers outnumber broadband subscribers  Telstra, the incumbent, is 51.8% government owned  Complications between regulatory agencies, government, and Telstra resulting in large amount of regulation and uncertainty Basic Telecommunication Indicators

7. China  Most populous country in the world, 1.3 billion  Huge market potential  Leapfrogging of technologies  Low technology penetration rates  Banning of convergence between telecommunications and broadcast has resulted in interagency rivalry  Operators are all government controlled Basic Telecommunication Indicators

8. Findings  Decline in revenue and subscriber base in traditional voice services  Consumer preference for mobile over fixed-line communication due to flexibility and mobility  Some preference for mobile data services over mobile voice  Broadband infrastructure is key, especially for converged services such as VoIP and IPTV  Value-added, converged services have been embraced by consumers and operators but are encountering regulatory difficulties in some parts of the region  Regulation has the power to encourage or encumber new services  All countries have IP telephony and VoIP in some manner and the market is growing  All countries have IPTV in some manner and the market is growing  Convergence is the future of the telecommunications market

9. A Model of Convergence Consists of the following categories:  Convergence of Operators  Convergence of Services  Convergence of Technology  Convergence of Markets  Convergence of Regulation Note: There can be overlap and one form of convergence can be catalyst for another