Asian cellular mart grows despite crisis

Asian cellular mart grows despite crisis

HONG KONG (Dow Jones): Except in Indonesia, Asian cellular- telephone operators continue to add new subscribers this year despite the regional economic crisis, according to Pyramid Research.

"Throughout the region you're seeing net new additions" of subscribers, said Ross O'Brien, Asian research director at Pyramid, a division of the Economist Intelligence Unit, which in turn is a sister company of the Economist.

Average revenue per subscriber, however, is falling in many markets, O'Brien told Dow Jones Newswires. "We're seeing a bit of reduction in revenue," O'Brien said. The declines in revenue per subscriber, while large in U.S.-dollar terms, are relatively modest in local-currency terms, the research director added.

Fixed-wire operators in Asia are more insulated from the crisis because their markets tend to be less open to competition than wireless markets, O'Brien said.

Yes, things are bad but probably not as bad as other sectors" of Asian economies, O'Brien said. "I don't see any of these guys as being in dire straits," O'Brien said of Asia's wireless and landline or fixed-wire operators.

Indonesia is the gloomiest market for wireless operators, with a decline of about 30 percent in subscriber numbers since the crisis began, the research director noted.

Revenue per subscriber has also declined at a faster rate than in neighboring countries. Pyramid expects revenue per subscriber in Indonesia will fall 11 percent this year in rupiah terms from pre-crisis 1996 levels. In U.S. dollars, the decline is about 78 percent.

Regional figures would look worse without the help of strong growth in China's cellular-telephony market. Chinese cellular operators continue to add about 800,000 new subscribers a month and are on track to reach a total of 23 million subscribers by the end of this year, O'Brien said. "We have not recorded any slow down in this growth," O'Brien added.