3G in Asia to widen digital divide

Most of South and Southeast Asia has fallen behind in the race to climb on the IT bandwagon

In this story: Wireless laggards 'Who needs 3G?' RELATED STORIES

By CNN's Kristie Lu Stout

HONG KONG, China (CNN) -- The introduction of third-generation mobile technology is poised to widen Asia's existing digital divide into a chasm.

Plans for third-generation networks, or 3G, have hit Asia's major economies. In Japan, NTT DoCoMo is preparing to test launch its long-awaited 3G service by the end of May.

But in South and Southeast Asia, most countries are still struggling just to get a dial tone.

Wireless laggards

In Bangladesh, there is one telephone line for every 100 people, while in India and Pakistan, the ratio is only a little better.

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These fixed line obstacles also ring true in the wireless world.

"When you look at the access in wireless, it's difficult to have high-speed communication in China, India, Indonesia. Most of South East Asia is in a difficult spot," said Greg Tarr of the Korea-based wireless venture fund M-Werks.

"They don't have the capital expenditure money to go out and buy the equipment and develop the applications."

Just a handful of South Asians can actually take advantage of the region's much-acclaimed IT achievements. It's a part of the world where the average yearly income is less than $500, not enough to buy a mobile phone and PC.

Most of South and Southeast Asia has fallen behind in the race to climb on the IT bandwagon. Mobile operators like Hong Kong's SmarTone say the onset of 3G will only amplify this gap.

"I think it can widen the digital divide in Asia further," said SmarTone business development director Alex Ip.

"For 3G the industrial infrastructure is much more sophisticated compared to voice. So therefore, for those countries lagging behind in terms of infrastructure, it would take more time to bring up that business structure."

'Who needs 3G?'

Few multinational equipment vendors talk about taking their 3G wares to even the more tech-savvy developing countries like the Philippines, Malaysia and many parts of China.

So many local telecom operators have thrown their hands in the air, saying "Who needs 3G anyway?"

Well, not Malaysia. Its communications ministry feels that pushing a General Packet Radio System (GPRS), also known as 2.5G, is a lofty enough goal for now.

China boasts a mobile market that could be the world's largest by next year. But the Chinese government is not in any 3G rush.

"In talks with the CEO of China Mobile yesterday they clearly indicated that 2.5G is a priority," said Tarr.

Markets like China and Malaysia don't have a need to broaden their existing wireless penetration base by adding more services, according to analyst Frank Yu of Ion Global .

"They have other basic needs they want to work on before they start experimenting with prototype systems. They'll just let Japan and Korea do that."

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