Asia Pacific poised to overtake United States as biggest Internet subscriber market in 2003

Aug. 14, 2001--Gartner Dataquest analysts project Asia/Pacific to have 183.3 million Internet subscribers in 2003, compared to 162.8 million in the United States.

Asia/Pacific will overtake the United States as the world's largest Internet market within three years, according to Dataquest Inc., a unit of Gartner, Inc. (NYSE: IT and ITB).

Gartner Dataquest analysts project Asia/Pacific to have 183.3 million Internet subscribers in 2003, compared to 162.8 million in the United States. The other large region, Western Europe, will have an estimated 162.2 million, putting it neck-and-neck with the U.S. market. At the end of 2000, Asia/Pacific (which includes Japan) had 78 million subscribers, an increase of 65 percent over the 1999 figure of 47.4 million subscribers. By 2005, Gartner Dataquest forecasts 248 million subscribers in the region.

In terms of access revenue generated by these subscribers, Asia/Pacific will still lag behind the United States by a big margin for at least another five years. By 2005, the Asia/Pacific Internet access market will be worth $17.2 billion, whereas the United States will still have a distinct lead with $21.2 billion.

"This differential between subscribers and access revenue illustrates a major reason why Internet use is still growing rapidly in Asia/Pacific; the region has some of the lowest Internet access rates in the world, and prices are still coming down as result of competition or, in some cases, government direction," said Andrew Chetham, senior analyst for Gartner Dataquest's Asia/Pacific Telecommunications and Networking group. "There is a clear pent-up desire by vast numbers of people in Asia/Pacific to go online. Falling prices and improved infrastructure, especially in countries with big populations like China and India, are a recipe for encouraging large numbers of new subscribers."

At the end of 2000, the country with the largest subscriber base in Asia/Pacific was Japan with 24.4 million, followed by South Korea with 16.7 million, China with 14.6 million and Taiwan with 4.6 million subscribers. Together, these top four countries accounted for 76 percent of the region's Internet subscribers in 2000. Gartner Dataquest forecasts that this year China will overtake South Korea as the second-largest market, but it will not catch up with Japan until 2003. By 2005, Japan and China combined will have approximately 151.5 million subscribers, representing about 61 percent of the total Asia/Pacific subscriber base.

The country that can look forward to the highest growth rates in the region is India. From this year through to 2005, Gartner Dataquest expects India to benefit from an average subscriber growth of 44 percent a year. At that point, India will have 21.3 million subscribers, making it the fourth-largest Internet market in the Asia/Pacific region after China, Japan and South Korea.

About Gartner Dataquest:

Gartner Dataquest provides the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software and services sectors of the global information technology industry. For more information, visit www.gartner.com.

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