Asian Internet Outlook Health Despite Currency Crisis, Finds IDC
SINGAPORE, February 3, 1998– Since the beginning of Asia's economic woes in July, the number of internet users in the Asia/Pacific region continues to grow, according to a recent survey by IDC Asia/Pacific. Initial findings from the survey indicate the growth in Internet users in the region has remained positive, despite increasing economic pressures on consumers, Internet service providers, and vendors of Internet access devices. Before July 1997, the compound annual growth rate (CAGR, 1995-2001) for Internet users in Asia/Pacific (including Japan) was forecast at 69 percent. As of January 1998, revised forecasts show only a moderate change in CAGR for the region to 63 percent over the same period. This is good news to local ISPs and vendors, as demand for their products and services will remain stable through 1998.
According to Pete Hitchen, senior internet analyst at IDC Asia/Pacific, the impact of the currency crisis will be felt by the local ISPs, as they purchase bandwidth in US dollars but charge customers in local currencies. "There will be some fallout in the next few months from the poor economic conditions. However, this will create a more streamlined ISP market environment which will benefit business users and consumers in the long run," said Hitchen. "Governments are revising restrictions on pricing and services that ISPs can offer. This makes for a more competitive environment which will nurture and promote Internet use."
Thailand Sees Lower Pricing
Specifically, Thailand has seen slower growth of new Internet users. However, government initiatives are in place to insure positive growth in 1998. For example, the Communications Authority of Thailand (CAT) has abolished floor pricing requirements for ISPs which lowers prices for the end users and will encourage ISP business.
Philippines – ISPs Will Experience Mergers
The Philippines has seen a slow down in overall consumer spending, which has also been felt by ISPs. Although new internet subscriptions are not growing at the furious pace of early 1997, there is a strong government push for internet usage in business and education. Currently, the Philippines has over 130 ISPs; however, the currency problems will undoubtedly lead some smaller companies to merge and others to close. ISP pricing in the Philippines remains steady, though some ISPs are charging corporate customers in US dollars in an effort to ease the effects of the devalued peso.
Indonesia Maintains Status Quo
Indonesian ISPs have maintained pricing in local currency so far, even in the face of moderate slow down in the new consumer growth for ISP subscriptions. Despite currency woes, the government is determined to encourage internet use. With the formation of the APJII (Asosiasi Penyelenggara Jasa Internet Indonesia/Indonesia Internet Service Provider Association) the ISP players (currently numbering 38) appear to have their interests taken care of. Although there has been little growth in the number of Indonesian internet users, existing ISPs are still aggressively promoting Internet usage, and the larger ISPs are actively expanding their internet technology.
Korea is Composed
As an indication of the hardiness of the internet market in Korea there has been no decline in the ranks of the larger ISPs. On the contrary, a new large ISP started commercial service in 1997 and at least two new ISPs will commence operations in 1998.
Singapore and Malaysia Unaffected
ISPs in Singapore and Malaysia have been relatively unaffected by the currency crisis. Like countries around the region, overall consumer spending has slowed, but local ISPs are still looking for increased business, primarily driven by government initiatives such as Singapore One and the Multimedia Super Corridor.
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