Study: Revolution Ahead in Asia-Pacific E-Biz

In its latest regional review of the e-business market in India, Indonesia, Australia and New Zealand, Yankee found that a host of Asian regulators have begun taking steps to open up their telecom markets by implementing key structural reforms.

"In the near term, the political dynamics of government bureaucracies will continue to play a role in revolutionizing the region's telecommunications industry," said Yankee senior analyst Agatha Poon.

To this end, the study cited the Indian government's decision to cut short the monopoly of Videsh Sanchar Nigam, Ltd -- which had been the exclusive provider of international telecommunication services in the country -- to April 2002 from 2004.

Fighting for Funds

With market competition in the region heating up, many Asian telecom operators are struggling to reinvent themselves with long-term business strategies, said the report.

At present, Yankee said that internal restructuring, and in certain cases the injection of foreign funds, have been employed to bolster the competitive edge of individual telecom companies.

"Although it is too early to assess the relative merits of these revolutionary schemes, the injection of foreign capital will be facilitated by the growing globalization of the industry," said Poon.

Looking Ahead

Despite these notable developments, Yankee concluded that a complete liberalization of the Internet industry in the region remains a "distant reality."

The primary stumbling block to achieving open telecom markets revolves around the strategic importance of a country's network infrastructure. For instance, many conservative regulatory authorities have expressed concerns about the issue of sovereignty underlying the industry's development.

Changes in Store

The Yankee report is the latest to conclude that major changes are in store for the Asia-Pacific Internet industry.

On the e-commerce front, a study released last month by IDC predicted that online business-to-business (B2B) transactions in the region will reach more than US$61 billion by the end of 2002, compared to $12.8 billion in 2000.

Moreover, the research group said that of the $500 billion in B2B that the region expects to generate by 2005, 45 percent will occur through heavily consolidated e-marketplaces.