India, Indonesia in, Korea, Japan out
Telecommunications services in Korea and Japan are exciting for users - heavy offers, cheaper prices, great networks with no dropouts during calls. They are less exciting for those who actually operate in those markets - we are talking about companies that we actually love for their stellar performance - SK Telecom or NTT DoCoMo.
But to face the reality of slower growth, the companies need to reorient themselves - slower growth ahead is the daily marching order now. This means a lot of change for those companies since employees have to have a different mindset to cope with growth numbers far below 10% instead of growth above 10%. In South Korea, growth slowed to 3.9% last year, from 11% in 2002, as penetration rate hit 70%. Penetration rate in Japan is about 67%.
DoCoMo is trying to move subscribers to their new highspeed service and has laid out a related strategy which includes flat rate fees. So far this strategy appears to be successful since the company managed to beat KDDI in subscription growth for the first time in 8 months.
Investors start punishing the markets - and to move their money to places where growth more feasible - India and Indonesia. Bharti Telecommunications saw its shares rise 29% in 2004 with Indosat growing by 42%. This compares to sluggish performance of companies in Korea and Japan.
In India the Indian Cellular Association estimates that 60% of new handsets have monochrome screens. The government also expects mobile phone users to reach 100 million in 2005, up from just 35 million in June 2004. Penetration rates in both countries are still below 10%, leaving lots of room to grow.
But to face the reality of slower growth, the companies need to reorient themselves - slower growth ahead is the daily marching order now. This means a lot of change for those companies since employees have to have a different mindset to cope with growth numbers far below 10% instead of growth above 10%. In South Korea, growth slowed to 3.9% last year, from 11% in 2002, as penetration rate hit 70%. Penetration rate in Japan is about 67%.
DoCoMo is trying to move subscribers to their new highspeed service and has laid out a related strategy which includes flat rate fees. So far this strategy appears to be successful since the company managed to beat KDDI in subscription growth for the first time in 8 months.
Investors start punishing the markets - and to move their money to places where growth more feasible - India and Indonesia. Bharti Telecommunications saw its shares rise 29% in 2004 with Indosat growing by 42%. This compares to sluggish performance of companies in Korea and Japan.
In India the Indian Cellular Association estimates that 60% of new handsets have monochrome screens. The government also expects mobile phone users to reach 100 million in 2005, up from just 35 million in June 2004. Penetration rates in both countries are still below 10%, leaving lots of room to grow.
posted by Andreas @ 1:45 pm
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