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Will Asia Lead The World's E-markets?
If one professor's research is correct, Asia may overtake the United States in e-commerce within the next four years. Australian technology expert Steven Burdon believes that the present growth rate of the Internet economy in Asia is far more focused on e-commerce than the United States' "new economy." Asian markets are seeking to boost their exports and are hoping to reach that goal by tapping into growth industries like wireless communications. Australia, Korea, Singapore and China are expected to experience more intensive e-commerce activities than all of Europe and even the United States, according to Burdon, who is a professor at the Sydney-based University of Technology.
For example, Singapore exported more than $65 billion worth of high-tech hardware and software. Similarly, Indian Information Technology Minister Pramod Mahajan said Wednesday that his country's IT hardware and software exports rose by 46 percent for the first quarter of 2000, and accounted for nearly $4 billion of the country's total export revenue. In 1996 to 1997, India's export revenue totaled $32 billion. The minister also noted that the largest importers of Indian IT goods was the United States, which accounted for about 60 percent. Europe accounted for about 20 percent.
Armed with market research from the International Data Corp. and Forrester, Burdon will make his presentation during the World E-Commerce Forum in London in October.
China's Wireless Boom?
Many analysts say that China eventually will be the leading market for the spread of wireless communication services, including Internet access. Two McKinsey & Co. consultants forecast that the Chinese wireless market will increase from 44 million users at the end of 1999 to nearly 250 million by 2005. Writing in the South China Morning Post, Paul Brown-Kenyon and Tony Perkins reveal that in a recent McKinsey survey, 68 percent of Chinese consumers are interested in wireless data services. However, the authors warned that the biggest challenge to the market right now is a higher degree expectation raised by aggressive marketing.
Yet not all countries in the Asian market are poised to reap the benefits from the growth of e-commerce. Several Indonesian industry executives and analysts are criticizing their government's recent decision to impose regulatory curbs on direct foreign investment in the telecommunications sectors. Critics maintain it is one of the few sources of revenue and growth for Indonesia's fledging economy. Indonesia's multimedia sector has shown rapid growth in the past year, with foreign venture capitalists funding Internet firms embracing news, fashion and travel. South China Morning Post reports that several Indonesian economic ministers are scheduled to meet Monday to discuss the regulation, which was announced this month.
Privatizing Telephony
In keeping with their pledge to liberalize the telecom industry, Indian Communications Minister Ram Vilas Paswan announced Saturday guidelines for opening up state-owned long-distance company VSNL to private competition. The decree is part of the 1999 national telecom policy, aimed at creating a regulatory environment that is friendly to the growth of high tech. To offer long distance telephony, potential competitors must secure a 20-year license for a fee of 1 billion rupees (US $25 million) and a bank guarantee of 4 billion rupees ($100 million). U.S.-India Business Council Associate Director Rick Rossow called the move another step in building Internet gateways. "[India's] Government realizes that Information Technology is where the future is," he said. And "increasing telephony competition will increase [gross domestic product]."
Other movements by the communications ministry suggest that the Indian market is moving quickly towards full liberalization. The government has given the green light for Internet service providers to use landing stations as international Internet gateways. Indian IT minister Mahajan also said that the government will consider regulation over the next few months for allowing Voice Over Internet Protocol, or Internet telephony, which currently is banned.
Likewise, an advisory panel appointed by the Japanese telecommunications ministry recommended this week that the Japanese re-evaluate the telecom sector and deregulate laws to allow for more competition. The panel called for Japan's telecommunications regulatory body to implement a bidding system for long distance and wireless phone licenses. Reuters reported that Softbank President Masayoshi Son last month criticized the government for blocking competition and wasting the opportunity to raise revenues through a bidding system. The panel also recommended that dominant carrier Nippon Telegraph & Telephone (NT&T), which owns a majority stake in wireless NTT DoCoMo, ease rules on allowing competitors to use its infrastructure to offer competing services.
- by Maureen Sirhal
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