Prediction 1: Regulation
The battle over mobile broadband spectrum and national broadband initiatives will be the key regulatory themes in Asia Pacific in 2012.
While Asia's 3G and now 4G subscriber base continues to grow, limited spectrum available to operators will become an increasingly contentious issue in the region. While many markets have already auctioned LTE spectrum, there will be increasing calls for more bands – particularly in the 700 MHz band – to be opened to mobile operators. Spectrum refarming will be another issue that is a gray area in many countries, and while 2G network shutoffs are still not feasible in most countries, this will become an option for operators who can't secure enough spectrum.
On the fixed broadband side, national broadband plans are well underway in Singapore, Australia, New Zealand and Malaysia with Indonesia becoming the most recent country to announce such a plan. We believe that more countries will follow suit such as Thailand, Vietnam, and India to promote the use of fiber optic services and at the same time protect the revenues of state-owned fixed incumbents.
Prediction 2: M&A activity
The region will see less M&A Activity then in years past, but some transactions will occur driven by overcrowding and spectrum grabs.
The region will see some M&A activity, notably in markets like India, Indonesia, Cambodia and potentially Vietnam where market overcrowding has led to big losses for market laggards. A new trend that will emerge is that an operator's spectrum assets will be valued considerably higher due to the need for more mobile broadband spectrum, especially now that the 2.3 GHz band can be used for TD-LTE. We don't expect many new opportunities for new mobile licenses, as South Korea seems reluctant to offer a fourth license (which would go to a domestic consortium in any case) although the NTC might offer a new license in the Philippines to rebalance the market after the Smart-Sun Cellular deal.