While Asia Pacific is now the leading indicator for mobile trends worldwide, the region is ripe for consolidation as scale, reach and depth of content will determine the winners of the future
Asia Pacific is leading other markets in mobile technology and services, but the proliferation of too many service providers is expected to lead to consolidation as firms face challenges related to infrastructure and economies of scale.
Steve McWhirter, HP Asia Pacific's VP for software, told Telecom Asia that Asia Pacific is by far the company's leading indicator across the globe in many aspects despite the region having tended to be a follower in the past.
He noted that as HP looks at industry trends and relates these back to the big picture, the observation is that the rest of the world now takes its cue from Asia Pacific on where the markets and the trends are going.
'Compare what you use your cellphones for here and in North America,' McWhirter said. 'You don't see many Americans streaming videos over their cellphones, but here it's quite common. We compare DoCoMo and the equivalent provider in North America and some of the stuff they're playing in Japan is miles in front.'
McWhirter said the trends you find in Brazil and other countries are following what is happening in India and China. 'If you look at the value-added services that are now being talked about in the US, they've followed Japan and Korea.'
While Asia Pacific had initially lagged in technology, the region is catching up by leapfrogging. He said that in China players will go straight to 3.5G and bypass 3G. McWhirter describes this phenomenon as mirroring what happened in the computing world when many countries jumped over client servers.
Still, he said the game being played in Asia Pacific boils down to the anticipated emergence of stable giants as opposed to a free-for-all among struggling players.
'You're going to see a reduction in service providers like we've seen in the finance sector. It just can't go on this way,' he insisted. 'Competition is always good in the industry, and I think we all, as consumers, want competition because it drives the price down. So there's got to be consolidation - it's just a matter of time.'
He predicts that big players like those from Europe will have more influence in the sector. 'We're going to see more Vodafones pop up around the world.'
The clincher then is scale, reach and the content that a firm delivers to the end-user. A service provider that fails one of these won't be competitive in the long run.
'Some of these guys are struggling. There's a Indian service provider that tells me they are making less than a hundredth of what they were making on a per call basis three years ago,' McWhirter said. 'That's an unbelievable drop, and that's because we've got these huge masses wanting to use cellphones, and firms just trying to get as many [subs] out there as they possibly can but they aren't prepared.
With HP having 'probably most' of the region's service providers in its list of customers, McWhirter said the need to weave together the network side and the application side of businesses would cull those that can't adapt.
'Customers are asking us to help them bring these two things together because clearly, as people move to smarter devices, they're going to want applications delivered to the device,' he said.