Executive summary
Moving to fixed-line competition
Macau is situated at the Pearl River Delta on the southeast coast of Mainland China, only 60km southwest of Hong Kong. Colonised by the Portuguese in the 16th century, Macau was the first European settlement in the Far East. Pursuant to an agreement signed by China and Portugal in 1987, Macau became the Macau Special Administrative Region (SAR) of the People’s Republic of China in 1999 after 400 years of Portuguese rule. In this agreement, China promised that, under its ‘one country, two systems’ formula, China’s socialist economic system would not be practiced in Macau, and that Macau would enjoy a high degree of autonomy in all matters except foreign and defence affairs for the next 50 years. The Basic Law provides for an independent executive, legislature and judiciary.
Macau’s economy slowed dramatically in 2009 as a result of the global economic slowdown, but strong growth resumed in 2010 largely on the back of strong tourism and gaming sectors. GDP grew by over 25% in 2010 and is expected to grow by a further 15% in 2011. The city of over 550,000 hosted nearly 25 million visitors in 2010 and almost 53% came from mainland China.
Macau has a low profile compared with its bustling sister SAR, Hong Kong. The country has quietly built itself a strong modern telecoms infrastructure, with a high penetration of telecom services. Large scale infrastructure projects continue to provide opportunity for expansion to telecommunications operators.
While fixed lines reached an effective saturation point a few years ago and penetration is steadily declining, the country’s mobile market is one of the most highly penetrated in the world. There were over 1.1 million mobile subscribers going into 2011, representing a penetration rate of over 200%, although many of these are prepaid subscriptions. Rapid growth in the mobile sector can be attributed to strong competition since the opening of the market in 2001. The advent of 3G in 2007 has seen the 2G share of the market slip to 26% and it will further decline to 2015 by which time 4G services should have entered the market.
SmarTone launched its new 3G service in Macau in 2010, part of a MOP180 million investment over a four-year period. 3 Macau (Hutchison Telecom) has also upgraded its network to HSPA+ and the transmission speed of its mobile broadband service will increase to up to 21Mb/s in mid-2011. The company plans to further increase speeds to 42Mb/s and strengthen network coverage during 2011.
Macau’s internet user penetration rates are amongst the highest in the world at close to 70%. Broadband population penetration remains below 25%, an indication of the lack of competition in the fixed-line sector. However, the incumbent CTM launched FttX broadband services in 2010 and expects to have 100% coverage by 2015.
In December 2011 CTM’s exclusive telecommunications concession for fixed-line services in Macau comes to an end. One important area going forward will be allowing new entrants to provide wired broadband services. Macau also needs a very clear licensing policy to encourage investment in future innovative networks and services. IPTV and other TV and video services that offer choice to the public such as mobile TV should be permitted and liberalised. Macau has a unique opportunity in 2011 to complement the liberalisation of the casino sector with a fully open, competitive and innovative telecoms and new media sector.
Macau – internet, broadband and mobile statistics – 2005; 2010; 2011
Sector
| 2005
| 2010
| 2011 (e)
|
|---|
Internet users
| 252,000
| 360,000
| 375,000
|
Broadband subscribers
| 68,000
| 131,000
| 135,000
|
Mobile subscribers
| 533,000
| 1,122,000
| 1,180,000
|
3G percentage
| -
| 74%
| 80%
|
(Source: BuddeComm based on industry data and BuddeComm forecasts)
Data in this report is the latest available at the time of preparation and may not be for the current year.
Lisa Hulme-Jones
April 2011
