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 Monday, July 14, 2008

Asia Pacific saw record 3G net additions in Q1 2008 as 13.3m new connections were made, taking the total to 136.3m - a 53.7% increase with respect to Q1 2007. Here we only include CDMA EV-DO, and not standard 1x connections, as 3G; including 1x connections the total rose 37.7% to 264.3m. However, the source of growth in the base was undoubtedly W- CDMA, the 3G technology of the GSM family which accounted for almost 86% of all the mobile connections in Asia Pacific at the end of March. The number of W-CDMA customers grew 74% in the year to reach 98.4m, with a record 12.3m new customers joining in Q1 2008.

Organic Growth by Technology

By contrast, the EV-DO base grew by just 17.7% in the 12 months to 31s March, as net additions dropped drastically to under 1m in each of the last two quarters.

Without doubt the most significant driver of this trend has been South Korea, where W-CDMA customer numbers exploded to reach 9.2m at the end of Q1 2008, little more than a year after commercial launch by SK Telecom and KT Freetel. These two operators both used exclusively CDMA technology previously, which means that the success of W-CDMA has had a direct impact on EV-DO connection growth, which initially levelled out, only to go into reverse in July last year. In Q1 2008, more than 0.8m EV-DO active connections were terminated on a net basis in South Korea. LG Telecom, which is sticking with the CDMA standard, finally launched an EV-DO service late last year, but this is unlikely to do much to mitigate the effects of the migration process at its two rivals.

The technology switch in South Korea also had a material impact on the market’s overall CDMA numbers, which fell by over 2.5m in the quarter and 5.8m in the year.

The result for Asia Pacific as a whole was the lowest organic growth rate in the CDMA base seen for more than six years at just 3.5%, as the total moved to 189m. This compares with an increase in the GSM/W-CDMA base of 7.2%, from 1.07bn to 1.15bn. Meanwhile, the PDC customer base - located exclusively in Japan - fell by another 15% to just 14.3m - representing less than 1% of the regional total for the first time since the introduction of the proprietary standard in 1994.

Source: Cellular News.