The Mobile Ecosystem in Asia Pacific

Steering economic and social impact through mobile broadband

Considering there are almost as many mobile connections as there are humans on the planet, it seems somewhat paradoxical that the Asia Pacific region is expected to add another 1.5 billion connections between 2010 and 2015—similar in scale to the past five years when 1.7 billion new connections were added. This year, the region will reach another milestone as it crosses the 3 billion connections mark.

Several factors are driving the impressive growth in the Asia Pacific region's mobile communications industry (see figure 1):

• Rapid economic development has increased the population's prosperity and, therefore, communications services are affordable.
• The forces of globalization and foreign direct investment (FDI) have opened new markets.
• Operators have made ambitious investments in mobile network infrastructure, with many operators already beginning 4G rollouts.
• Pre-paid services (making up 82 percent of Asia Pacific connections, compared to 66 percent in Europe, and 15 percent in the United States and Canada) provide consumers with access to flexible, low-cost voice and texting services.
• Low-cost handsets and lower mobile usage prices have reduced the minimum total cost of mobile ownership.
• Innovative business models, including infrastructure sharing and unique distribution strategies, allow financially viable expansion (for operators and consumers) of network coverage into rural areas.

Figure 1: Asia Pacific will cross the 3 billion mark in mobile connections in 2011

Asia Pacific's embrace of mobile communications has led to impressive revenues for mobile operators in the 17 largest countries in Asia Pacific (AP17). AP17 operators earned more than $310 billion in revenues in 2010 compared to $240 billion in 2008.¹ The direct contribution of revenues accounts for approximately 1.7 percent of the total aggregated gross domestic product (GDP) of the AP17, while nearly 1 percent more of the total GDP comes from indirect contributions to the economy (see sidebar: Mobile Ecosystem Economic Contribution Methodology). We estimate that direct and indirect economic contributions from the mobile ecosystem amount to roughly $484 billion in 2010, or 2.66 percent of the aggregate GDP in the AP17 (see figure 2).

The mobile ecosystem also plays a pivotal role in employment. In 2010, nearly 11.4 million people in Asia Pacific were employed directly or indirectly in the mobile ecosystem, a 16 percent increase from the 9.8 million employees in 2008.

This paper is an excerpt of a 2011 report commissioned by the GSM Association. We discuss the current state of the Asia Pacific mobile industry and highlight A.T. Kearney's Mobile Broadband Readiness Index (MBRI). The MBRI measures mobile adoption rates by country and identifies ways the mobile industry can sustain its growth from market, regulatory, and corporate strategy perspectives (see sidebar: Defining Asia Pacific).

For the Benefit of Society

Figure 2: The mobile sector adds significant value to the economy of Asia Pacific

The mobile sector is having an impact on society that goes well beyond economic and employment contributions. This is happening both through organized efforts mobile operators have directly initiated and led, and through the collateral benefits that mobile access offers to society. While the organized efforts typically receive more coverage in both industry and company reports, the collateral effects of mobile arguably have a greater impact on society and on our everyday lives; mobile is responsible for communication, productivity, and knowledge efficiencies that were once inconceivable.

Communications efficiencies enable like-minded individuals to coordinate and empower the masses and organize against better-resourced adversaries in their fights for reform or equality. Productivity efficiencies allow for data-enabled mobile devices that provide more flexibility for processing information, allowing us to lead more productive lives and helping industries become more efficient in delivering goods and services. Knowledge efficiencies enable markets to function more capably, and the unprecedented ability of consumers to access any information, anytime, anywhere, offers deep social, intellectual, and financial benefits.

Recent events suggest that mobile in Asia is playing a lead role in furthering democratic reforms. Malaysia's general election in 2008 and Singapore's in 2011 were characterized by particularly strong opposition for the first time in history, thanks largely to social networking technology—which is increasingly being accessed via mobile handsets, tablets, and personal computers connected to mobile networks. Similarly, during the ongoing "Arab Spring," a disenchanted, physically fragmented, but like-minded groups of people across the Middle East are able to mobilize through mobile communications.

Figure 3: Asia Pacific accounts for 40 percent of global mobile data traffic

North Korea and Myanmar offer powerful counterexamples of mobile's impact. While both countries feature large, oppressed, and disenchanted populations, the heavy regulatory control over and restrictions on mobile connectivity are enormous barriers to the communication and collectivism we've seen elsewhere and are therefore arguably one of the biggest factors against political change.

However, there are significant dangers in communications efficiencies that require intervention by the authorities. For example, BlackBerry Messenger (BBM) was cited as playing a pivotal role in the London riots of summer 2011 by allowing youths access to real-time group conversations to plan attacks and warn of police presence. Governments in Asia Pacific and beyond are still struggling to devise strong intervention approaches that can curtail dangerous and illegal uprisings without censoring public liberties such as freedom of speech.

Mobile Broadband: The Growth of an Ecosystem

As mobile broadband spreads throughout Asia Pacific, the sector's economic and social impact could grow. Mobile broadband is booming across the region and is increasingly becoming the standard conduit for accessing the Internet. By 2015, Asia Pacific is expected to account for 40 percent of the world's mobile data traffic (see figure 3). The growth in mobile data is driven by investment and innovation across the entire mobile ecosystem—mobile operators providing connectivity and data services; content and service providers providing applications and content; device manufacturers providing data-ready handsets; and enablers providing support services (see figure 4).

Mobile operators. Asia Pacific has been at the forefront of 4G networks ever since Japan-based NTT DoCoMo first proposed the long-term evolution (LTE) format in 2004. After Hong Kong-based CSL launched its 4G LTE in its home country in November 2010, a month later the carrier launched LTE in Japan and now is investing $3.7 billion to cover 70 percent of Japan's population by 2015. Through 2011, other developed markets in Asia Pacific have joined as early global adopters of LTE, with Singapore's M1 going live with Southeast Asia's first LTE service in June, SK Telecom following suit in South Korea in July, and Telstra launching its service in Australia in September.²

Emerging Asia Pacific markets are also showing strong commitment to 4G. The GSM Association estimates that half of the 126 million LTE subscribers forecast in the Asia Pacific region in 2015 will be in China. China Mobile is targeting 60 trial networks and 20 commercial networks by the end of 2012; in February 2011, it teamed up with Japan's SoftBank, India's Bharti AirTel, and four European and U.S. operators to help push the global adoption of the TD-LTE standard. In India, several operators are in the process of rolling out TD-LTE networks, with launches planned for 2012. In Sri Lanka, both Mobitel and Dialog announced LTE testing in 2011, while Malaysia's Maxis Communications started LTE testing in 2010. Both Smart Communications and Globe Telecom launched 4G mobile services in the Philippines in April 2011.

Figure 4: The mobile data ecosystem

Connection speeds in Japan and South Korea are already the highest in the world, with average speeds of 1,400 kbps in 2010—almost triple the Western average (see figure 5).³ Although China and India lag well behind, with average access speeds of only 50 kbps and 19 kpbs respectively, speeds in those countries are projected to grow nearly 100 percent annually and cross the 1,000 kbps mark by 2015. China and India are therefore positioned to experience the same boom in mobile data consumption currently taking place in Japan and South Korea.

Content and service providers. Innovation around the development of mobile-based services has been a key factor in driving mobile data usage. These services can be broadly defined in three categories: communication, such as VoIP, instant messaging, email, and video calling; entertainment, including gaming, video-on-demand, mobile TV, and music-on-demand; and functional services such as mobile commerce, payments, bookings, and location-based services.

In communications, Asia Pacific's mobile users, as their counterparts worldwide, have many communication tools available to them beyond simple voice calls. For example, Tencent, China's biggest Internet company, has partnered with Taiwanese handset maker HTC to embed its QQ instant messaging (IM) system into HTC's smartphones.⁴ Beyond IM services, Tencent will provide users with online storage, a browser interface, and micro-blogging services. Fellow Chinese Internet behemoths Alibaba and Baidu have presented similar ventures in partnership with handset manufacturers.

Figure 5: Mobile broadband speeds in Japan and South Korea are the highest in the world

Asia Pacific is also among the world's leaders in innovative mobile entertainment services. Mobile video is one especially fast-growing area, as connection speeds continue to rise together with smart-phone penetration. Nico Nico Douga, a Japanese video-sharing site, launched its mobile version in 2007 and had amassed nearly 6 million active mobile users by the end of 2010, of which 96 percent are in Japan. Revenues in 2010 (including fixed-line Internet) stood at $60 million, driven mainly by premium memberships and advertising. In India, Hungama, South Asia's biggest digital entertainment company, has partnered with Korean digital rights management (DRM) technology provider INKA in 2010 to deliver Bollywood movies and TV series to 250 different kinds of mobile devices, ensuring maximum coverage.

In functional services, data-enabled mobile handsets have allowed users to perform everyday functional and transactional activities that used to be handled through other channels. Asia Pacific has been at the forefront of innovation for many such services. Mobile payments are well-established but continue to breed innovation, especially in m-commerce. In 2011, Alibaba launched its mobile wallet solution, in which users deposit funds in an AliPay account (and may also link their bank cards to the system) and then use their mobile phones to make in-store payments with-out charges. AliPay produces a mobile barcode, which can be scanned by merchants using the built-in camera on their own AliPay-enabled handset or using a standard scanning gun.⁵ With 550 million users at the end of 2010, this is not only a testament to the success of the system but also helped drive Alibaba's expansion from fixed-line to mobile e-commerce. Japan's leading e-commerce player, Rakuten, is increasing its focus on m-commerce, acknowledging it as a key growth area. Rakuten is now applying its expertise in e- and m-commerce on a global basis, spending nearly $40 million since 2010 to acquire the U.K.'s Play.com (rated the best U.K. mobile commerce site in 2010), Russia's ozon.ru (which has a dedicated English- and Russian-language iTunes application), and the United States' buy.com (whose m-commerce platform features barcode scanning and voice recognition).⁶

Device makers. Asia Pacific device manufacturers are well-established as global innovation leaders and command a significant share of the global smartphone market. South Korea, Taiwan, and, increasingly, China lead the way. Together, Samsung, LG, HTC, Huawei, and ZTE had 37 percent global market share at the end of 2010. South Korean manufacturers have grown rapidly, with a combined sales market share in 2010 of nearly 30 percent, compared to 23 percent in 2005. Their transition from low-end to leading-edge is remarkable. More recently they have also emerged as credible global players in the fast-growing tablet computer market, with Samsung (with its Galaxy Tab) emerging as perhaps the primary challenger to Apple. As the availability, affordability, and desirability of smartphones has increased, smartphone penetration in Asia Pacific has surged. In 2005, only 7.5 percent of handsets were smartphones; by 2010, this had increased to 14.5 percent, with Japan and South Korea leading the way. Those two countries are projected to have smartphone penetration of 55 percent and 45 percent respectively by 2012.

The most recent Asian smartphone manufacturer making waves is Huawei, which in August 2011 announced its planned launch of several low-cost, Android-powered smartphones priced as low as $100. Huawei will take advantage of its strong existing presence in the sector, close relationships with mobile operators through its network infrastructure business, and experience in providing "white-label" phones to other brands over several years. The handset will have all the specifications expected of higher-priced smart-phones—including a touch screen, a built-in camera, an SD memory slot, and Wi-Fi connectivity—and is expected to make smartphone ownership, and therefore the full suite of mobile data services, accessible to millions more lower-income customers, not only in Asia Pacific but also in Africa and other emerging regions.

Figure 6: The 2011 Mobile Broadband Readiness Index

Enablers. Enabling platforms in Asia Pacific have emerged across smartphones, payment platforms, and billing platforms. For example, in the Philippines, the two main players have developed their own platforms to go with their services. Globe Telecom's GCASH and PLDT's SMART Money each operate as separate mobile payment systems, which means there are two different currencies without the ability to exchange them. This trend, in which operators develop independent mobile payment platforms, has been the norm up to now. But most operators recognize the inefficiencies in this setup, and Globe recently suggested that GCASH and SMART Money will eventually need to interconnect to eliminate the inefficiencies.7 In Singapore, the government's Infocomm Development Authority (IDA), rather than the operators, has taken the lead in developing a common mobile payment platform that will launch in 2012.8 This platform will connect mobile operators, banks, and payment providers in a completely operator-neutral manner. The IDA has also taken the lead in rolling out payment terminals across the country and establishing common standards.

The Mobile Broadband Readiness Index: Measuring Progress

While it is clear there is rapid growth in mobile broadband, traffic, applications, and services across Asia Pacific, not all countries are at the same stage of evolution. Until now, there has not been any authoritative tracking or modeling of the mobile broadband adoption cycle, nor any macro-level classification of the progress countries have made along this cycle.

We developed the Mobile Broadband Readiness Index (MBRI) to measure different countries along this adoption cycle from a readiness perspective, and to identify the means to sustain growth from a market, regulatory, and corporate strategy perspective. For this inaugural Index, we calculated results for 2011 and used historical data to create 2009 rankings.

The MBRI's highest-ranked countries are those considered furthest along the adoption cycle, so their progress can offer lessons for countries that rank lower. The purpose isn't to identify winners or losers, but rather to learn how to drive mobile broadband adoption further within national boundaries. Additionally, this Index is a relative comparison of the AP17 countries, which means that although a country may have made significant progress in terms of the metrics between 2009 and 2011, it may still fall in the rankings if its improvement is slower than its peers.

Figure 7: The 2011 Mobile Broadband Readiness Index

Beyond this international comparison, there is also considerable variation within countries between urban and rural areas. Rural areas in particular score lower on metrics in the mobile environment realm, including 3G coverage and smartphone penetration. Like most indices, the MBRI rates countries as a whole, which may implicitly improve the rankings of "city-states" such as Singapore and Hong Kong compared to lower-ranked countries with an urban-rural mix, such as South Korea or Australia, when in fact those countries' mobile environments may not necessarily be more developed than those in Seoul or Sydney.

Figure 6 identifies the 13 factors used in the MBRI. Details of the methodology, including definitions and terminology for each metric, are provided in the appendix.

The 2011 MBRI places Japan at the top, followed by Singapore (see figure 7). Japan's leading position is mainly due to its mobile environment. Japan has the highest smartphone penetration, 3G or 4G population coverage, and downlink speeds in the region, while mobile broadband penetration is the second highest behind South Korea. Its e-readiness is also exemplary, with the second highest number of Internet domains providing a wealth of local content for mobile Internet users. Finally, the business environment is regarded as the most pro-innovation in the AP17. Together, this creates the basis for high mobile data usage.

Singapore was the top-ranked country in 2009 but cedes this position to Japan in 2011, due mainly to NTT DoCoMo's 4G, which significantly increased access speeds beyond those in Singapore. In 2011, Singapore remains a close second, with the highest mobile penetration in the AP17 at nearly 200 percent, indicating not only that nearly all Singaporeans are connected to mobile networks but also that many of them use multiple devices (for example, a smartphone and a 3G-enabled tablet). Trends such as these will drive up the usage of mobile data services. Singapore's scores are high in the business and technology environment categories, with the most favorable regulatory environment and highest business Internet usage in AP17, which provides a strong basis for investment and usage of mobile data services.

Hong Kong rises two spots, leapfrogging Australia and South Korea for third place. This is due mainly to a large increase in mobile broadband penetration, stimulated by CSL's late 2009 launch of Next G, described by the operator at the time as the "world's fastest all-IP mobile broadband network." CSL followed this with the first Asian 4G launch in 2010, which led to a huge increase in access speeds.

The biggest rise overall since 2009 is Vietnam, which goes from 13th to 9th place in the Index. Vietnam's mobile environment has advanced considerably in the past two years, with mobile penetration surging from 86 percent to 126 percent. Vinaphone launched the first 3G network in 2009, and the country's other major operators followed suit in the next year. The resulting increase in access speeds and launch of mobile broadband services has also stimulated growth in smartphone adoption, ushering in an environment ready for the uptake of mobile data services. Rankings of Vietnam's regulatory and innovation environments have also improved.

Sri Lanka (falling two spots to 12th) and Thailand (down three spots to 15th) drop the furthest in this year's rankings. Sri Lanka has fallen behind on 3G coverage and access speeds. It was ahead of most other emerging markets on both metrics in 2009, but countries such as Vietnam and China have caught up and moved ahead. Thailand is ranked lower in 2011 on most mobile environment metrics, including 3G population coverage and mobile broadband penetration, which has been hampered by ongoing delays in issuing 3G licenses. Additionally, four of Thailand's business and technology environment metrics are ranked lower than in 2009: the quality of the regulatory environment, the business conditions for entrepreneurs, the innovation environment, and the effectiveness of government usage of information and communications technology (ICT). Overall, the combination of a relative deterioration of the business and technology environment and delays to 3G expansion have led to stagnation while most of Thailand's peers have made progress on both fronts.

Comparing the region's two largest markets, China remains above India in 2011. Mobile, smartphone, and mobile-broadband penetration rates and 3G population coverage are all higher in China. China is also more e-ready, with higher fixed-line broadband penetration and the highest number of domains in AP17, although this is partly because of language, as there are more English speakers in India, increasing access to foreign sites. In addition, India's business and technology environments are perceived less positively than in 2009, falling two places in business Internet usage and four places on conditions for entrepreneurs, conditions that, for example, impact small and medium enterprises (SMEs) developing data services.

The two lowest-ranked countries, Bangladesh and Pakistan, did not move in the rankings between 2009 and 2011. They rank among the bottom three for seven of the 13 metrics, including four out of the five mobile environment metrics. Perhaps most critically, both countries are in the bottom three in the quality of the regulatory environment. Addressing regulatory priorities will help drive improvement in all of the main factors in the MBRI. Still, both countries have shown growth in many areas. Bangladesh's mobile penetration rose 18 percent between 2009 and 2011, while Pakistan has increased mobile Internet access speeds considerably. In addition, there are many positive signs in the market. Pakistan is the third-most competitive market in AP17 and Bangladesh is seventh, based on their Herfindahl-Hirschman Index (HHI) scores, defined in the appendix on page 15. Pakistan is also the highest-ranked emerging market in terms of the environment for business entrepreneurs.

When bringing together the relative weighted scores that underpin the rankings and examining the change in scores between 2009 and 2011, three distinct groups emerge (see figure 8). From a public policy perspective, the best approaches going forward differ by cluster.

Mature markets. This first cluster comprises developed markets that have scored highly in both years. These mature markets face the challenge of large data traffic volumes and growing diversity in their traffic profile—for example, rising demand for mobile-to-mobile traffic. Regulators must ensure that operators can differentiate on the quality of service provided and manage traffic to avoid potentially crippling congestion. They must also ensure that sufficient spectrum is available, for example through the digital dividend.

Figure 8: The 2011 Mobile Broadband Readiness Index results point to three clusters of countries

Telecom regulators should also consider how to bring regional leadership to the global stage. This can happen through constructive policies regarding innovation and SMEs in the mobile sector, including creating economic and sector clusters, providing fiscal incentives, and acting as a bridge between business, academia, and the public sector.⁹

Rising markets. The next cluster includes lower-scoring countries that have shown improvement since 2009, indicating that the gap with mature markets is closing in mobile data readiness. These markets will have to tackle massive increases in data traffic passing through networks that were, in many cases, designed with voice traffic in mind. Large-scale network upgrades are required, and regulators must ensure that sufficient spectrum becomes available. In addition, reaching these countries' full potential—all, except for Malaysia, have at least 80 million people—requires rolling out networks to underserved rural areas. In order to facilitate these requirements, regulators must make sure that operators can build, own, and share network infrastructure as needed. In addition, incentives and subsidies, potentially from monies collected in universal service funds, should be used to ensure that this expansion is viable for operators. Finally, the government can lead by example by driving innovative public sector service provision over mobile platforms, as is the case in more advanced markets.

Nascent markets. This final cluster includes countries that scored relatively low in both 2009 and 2011; three countries actually scored worse in 2011, indicating a widening gap between them and their peers. These developing markets must first concentrate on driving growth in mobile penetration and accelerating 3G network rollout. This can happen by ensuring that 3G (and in the future 4G) licenses and spectrum are distributed in a timely, fair, and transparent manner, at a price that does not restrict the ability of operators to invest in network infrastructure that can drive up population coverage. Additionally, telecom-specific taxes must be removed because they act as a barrier to adoption by pushing the cost of connectivity, handsets, and data services beyond the reach of the masses.

A Watershed Moment

We have reached a watershed moment in debating how Asia Pacific's mobile industry is steering economic and social impact through mobile broadband.

Economically speaking, the industry continues to punch above its weight, contributing an estimated $484 billion, or 2.7 percent of GDP, in the AP17. The collateral impact on society is profound, as mobile technology creates efficiencies in everyday communication, productivity, and knowledge. The adoption of mobile broadband continues to grow at an astonishing rate, and by 2015 Asia Pacific is expected to account for 40 percent of global data traffic. Our inaugural MBRI, covering 17 of Asia Pacific's largest markets, indicates that countries that successfully create an ecosystem conducive to further growth in mobile data services have the potential to make rapid leaps ahead of their peers.

The long-term growth prospects for mobile broadband are electrifying. Operators are finding consumers hungry for bandwidth-intensive applications and services that transform the way they live and work.

Authors

Soon Ghee Chua is a partner in the Singapore office.

Adam Dixon is a partner in the Sydney office.

Nikolai Dobberstein is a partner in the Mumbai office.

Hoonjin Hwang is a partner in the Seoul office.

Naveen Menon is a partner in the Singapore office.

Mohit Rana is a partner in the Gurgaon office.

Naoki Yamamoto is a partner in the Tokyo office.

Mobile Ecosystem Economic Contribution Methodology

To determine the mobile ecosystem's supply-side effects on the economy, we estimated the economic value added of mobile network operators and adjacent industries in the ecosystem (content and services, distribution, and device manufacturing, among others) based on proxy companies across the value chain in various AP17 countries (see figure). We used value added rather than revenues to avoid double counting of revenue flows within the value chain.^* A multiplier of 1.5, based on an average of multipliers used in previous studies, was then applied to the direct contribution of the mobile ecosystem to estimate its impact on other industries.

However, as mobile devices become a tenet of the mobile-enabled working population's everyday lives, we had to account for the potential for improvement in overall productivity. Thus, we estimated the percentage of mobile workers in each country's workforce and their average GDP contribution (using total GDP divided by total workforce), multiplied by an estimated productivity gain from mobile usage. To assess the percentage of mobile workers in the economy, we used several studies, including those conducted for Telenor ASA and IDC. To determine the percentage of mobile workforce across the AP17 countries, we linked GDP per capita (using purchasing power parity, or PPP) to the percentage of mobile workers for the selected countries.

Figure: Framework for calculating the mobile value chain's economic contribution

Subsequently, we interpolated the data for missing countries in a linear fashion. While GDP per capita and the mobile workers percentage may be partially interrelated, most likely they are not fully dependent upon each other. The productivity gain factor we used was approximately 4 percent for developed countries and 7.6 percent for emerging countries, based on a range of percentages used in previous studies. We used a lower productivity gain percentage for developed countries because mobile phones are often the only form of communication in emerging countries, and therefore without mobile phones, workers in those nations would be significantly worse off than counterparts in developed countries with ready access to fixed lines.

The potential increase to each country's GDP is calculated based on target penetration rates, which are based on two factors: whether a country is a developing or developed market and the 2010 connectivity level. The basis for this is a 2009 World Bank report that states that a 10 percent increase in mobile penetration rate has the potential to bring a 0.60 percent GDP increase for high-income economies, and a 0.81 percent GDP increase for low-and middle-income economies.^**

We set target penetration rates with the assumption that after a country had achieved 100 percent penetration, its potential GDP uplift from further mobile penetration increases would continue to rise, but at a diminishing rate. This is because once everyone in a country is connected, the marginal impact on GDP from further connectivity through second or third SIMs is lower than in the case of someone acquiring their first.

Additionally, some AP17 countries may appear to be multi-SIM markets, with high penetration rates despite being, on the whole, underdeveloped markets. For example, Vietnam has a penetration rate of 126 percent despite being an emerging market, which suggests that a large number of people may have several SIM cards while many have none. For these markets, we set a higher target to account for this. The difference between these targets and actual penetration was used to derive the potential GDP uplift—that is, the amount of incremental GDP a country could achieve by attaining the target level of connectivity.

^* Value added refers to earnings before interest and taxes (EBIT), plus wages, minus capital expenditures (CAPEX), plus depreciation or approximate revenues, minus cost of sales.
^** Yongsoo Kim, Tim Kelly, Siddhartha Raja, "Building broadband: Strategies and policies for the developing world." Global Information and Communication Technologies (GICT) Department, The World Bank, January 2010.

Defining Asia Pacific

Figure: The study's scope

With 47 countries, 3.7 billion people, hundreds of cultures and thousands of languages and dialects, Asia Pacific is the world's most diverse region. Merely referring to Asia Pacific without considering the intricacies and complexities among and within its countries ignores the wholeness and richness of this diversity. However, it is impossible to provide an equal level of analysis to all 47 countries, so this report focuses mostly on the 17 markets (AP17) that comprise 99 percent of the subscribers in Asia Pacific. The AP 17 is extremely diverse economically, culturally, geographically, and politically, and thus is a good representation of Asia Pacific as a whole.

The figure demonstrates the geographic scope of Asia Pacific along with the number of mobile connections in each country in 2010.

Appendix: The Mobile Broadband Readiness Index

Descriptions and terminology

The MBRI is scored using linear proportionality where the maximum value for any given metric gets a score of 100, the minimum a score of 0, and all remaining values scored in a linear manner relative to the maximum and minimum scores. The 13 metrics are as follows:

¹ All monetary amounts in this paper are U.S. dollars.
² "Hong Kong and Singapore Lead LTE Charge in Asia Pacific", Wireless Intelligence, October 2010.
³ The Western average includes the United States, the United Kingdom, France, Germany, and Italy.
⁴ "HTC, Tencent to Launch New Smartphone," Global Times, 22 September 2011
⁵ Alipay Launches Mobile Barcode Payment Solution,"Marbridge Daily, 2011.
⁶ "Japan's Rakuten Acquires UKE-Commerce Site Play.com for $39.2 Million", Tech Crunch, September 2011; "Is Play.com really the best mobile commerce website?" econsultancy.com, 1 October 2010.
⁷ The Philippine Star, "Smart, Globe See Surge in Mobile Money Payments, "January 2011.
⁸ NFC News, "Singapore to Launch M-Payment Platform for 2012," November 2010.
⁹ For more information about economic clusters, see "Next Generation Economic Clusters" at www.atkearney.com.