Southeast Asia finally awakens but mobile Internet speeds still lag

Not too long ago, a little app called WeChat started knocking on doors in Southeast Asia, making itself a permanent fixture in the home screens of smartphone users in the region. Today. WeChat has 200,000 to 300,000 downloads in Thailand, and the app has begun advertising heavily on Facebook, targeting countries in Southeast Asia.

The instant messaging app isn’t developed by some shaggy-haired, irreverent entrepreneur from Silicon Valley, but a powerful Internet giant from China called Tencent.

(Read: Three mobile messaging apps from Asia you must know about)

Global technology firms now realize that Southeast Asia is a sleeping giant that is about to awaken. The number of people in the weirdly-shaped island and archipelagos number about a tenth of the world’s population, making it a collection of huge but diverse markets.

This imminent unleashing of the region’s true potential is the key message of MobileMonday‘s Mobile Southeast Asia Report 2012. The study, available online for free, summarizes some key trends happening in the so-named group of countries.

Here is a snapshot of what the report talks about:

1) Southeast Asia’s ‘spillover markets’

Although WeChat’s main market is still China, Tencent has begun tapping on the region’s potential. Companies like Google, Microsoft, and InMobi (the report neglects to mention Rocket Internet) have also set up camp in Southeast Asia. Local giants like SingTel have begun spreading their wings abroad, investing in startups both homebred and foreign.

2) Maturing mobile infrastructure

Mobile carriers are expected to spend US$53.3B by the end of 2012 on mobile infrastructure. 62 percent of carriers in Asia have already invested in Long-Term Evolution (LTE), catching up with their North American and European counterparts. In Southeast Asia, Malaysia is already running WiMax while Singapore operator StarHub will launch 4G services soon.

3) Growing m-commerce industry and rising acceptance of online shopping

Singapore is the most mobile payment-ready nation in the world, according the the Mobile Payments Readiness Index by MasterCard. Philippines came in second in Southeast Asia, followed by Malaysia, Thailand, Vietnam, and Indonesia (see SGE’s report).

Another study by MasterCard finds Thailand to be the most receptive country in Asia towards online shopping. Malaysia and Vietnam scored highly as well.

4) Boom in mobile devices

The report says:

Nearly 7.7 million units of phones [were] bought in the first three months of 2012 in the region’s key markets of Singapore, Cambodia, Indonesia, Malaysia, the Philippines, Thailand and Vietnam, according to market research company GfK Asia. Indonesia chalked up sales exceeding US1.4 billion in smartphones in 2011, and markets like Singapore and Malaysia have a smartphone penetration rate of 88%.

5) Growth of online gaming market

People in Southeast Asia are a trigger-happy bunch — digitally. Revenue created from the region could double between 2011 and 2015. Internet users are warming towards social gaming.

6) Things are still slow here

Despite the region’s immense potential, challenges remain. Slow mobile Internet connection speeds is one major complaint among users. A Google study has found that Southeast Asian countries lag the world when it comes to connecting to the Internet via mobile devices.

Even Singapore, which is touted as a beacon of hope with its supposedly flawless mobile infrastructure, has surfing speeds that are roughly equivalent to Indonesia and Malaysia.

The region faces other problems. The report says:

Though highly active, creative and vibrant community of developers exist, they are hampered by language  and localisation issues, made worse by the high revenue share of 70-80% imposed by telcos, which  discourages creativity as ARPU numbers per country are still small,” observes Felix Lee, Director at  T.Ware and mentor at NTU Ventures.

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