Tech-sector brands face unprecedented change

The past decade has seen unprecedented change in the telecommunications sector in Asia-Pacific, and the coming years show no sign of slowing down. Availability of technology such as smartphones, tablets, Wi-Fi, 4G networks and e-commerce is changing the way business is conducted and is driving huge-scale innovation in areas ranging from customer engagement to retail models.

Despite slowing demand for voice and SMS services, today’s tech-savvy Asia-Pacific consumer is data-hungry, and the immediate focus for network operators is the expansion of 3G networks in developing markets and 4G networks in developed markets to provide customers with faster data speed and coverage. Competition among operators is rife, and as a result there is escalating merger and acquisition activity taking place and significant pressure on pricing models including bundling and promotions. Network operators also face the increasing threat of over-the-top (OTT) players that are beginning to gain share and, subsequently, revenue from traditional players. China and Hong Kong are taking the lead in driving OTT partnerships in Asia to counter this threat.

With increasing household internet penetration across the region via PCs, smartphones and tablets, telco brands are increasingly looking to leverage digital platforms to connect with consumers. Network operators in Singapore and Malaysia are moving forward in adopting the digital services by investing in gaming portals and offering music services with data plans. One example of this investment is the recent sponsorship by a network provider of an International Music Festival in the Philippines wherein an app was deployed for concert goers containing information on where to stay and where to eat, and allowed users to monitor tweets related to the event.

For handset manufacturers, or OEMs, competitive pressure is also intensifying. Penetration of smartphones across Asia-Pacific continues unabated and tablet popularity and penetration is on the increase. While developed markets like Singapore, Korea and Japan enjoy smartphone penetration of 87 per cent, 73 per cent and 57 per cent respectively, developing markets still show much room for growth, particularly in markets such as the Philippines’ (current penetration is around 15 per cent) and Indonesia (23 per cent smartphone penetration). New smartphone and tablet brands, particularly those with cheaper and entry-level models, are flooding the region looking to take advantage of the strong market conditions and threatening the foothold of traditional brands.

For network operators, key considerations for the future include:

• Expansion of data usage, particularly the introduction of affordable plans in developing markets and unlimited data usage plans in developed markets.
• Mobile money in developing countries and platforms to support m-commerce in developed markets.
• Use of apps to tap into increasing popularity of smartphones and tablets.
• Facilitation of mobile video – availability of larger mobile screen sizes is helping video gain traction in developed markets such as Hong Kong, Singapore, Korea and Japan.
• Leveraging data monetisation for additional revenue streams.

For OEMs, the biggest opportunities ahead include:
• Addressing consumer demand for multiscreens by delivering a seamless experience and one operating system across screens.
• Integration of smartphones with smart devices at home such as televisions, fridges and lights.
• Product development of wearable devices linked to growing popularity of wearable devices which keep track of physical health and sports related activities.
• Investment in improving screen size, operating systems and affordability

In the years ahead, as we witness the shift from mobility to connectivity, be it smartphones to smarthomes, handsets to wearables or someone else’s cloud to personal cloud, for telco operators and OEMs alike, the future will be about winning through collaboration.

Sagar Tamang is executive director, technology industry group, Southeast Asia, North Asia and Pacific, Nielsen