Global management consultancy Kearney has released a report on the future of Southeast Asia’s Internet landscape at Asia Tech x Singapore (ATxSG).
The ‘Building an Internet for the future in Southeast Asia’ report highlighted that, while the region’s Internet ecosystem is vibrant, governments and businesses must address a host of challenges in order to make the Internet accessible and affordable for everyone.
Soon Ghee Chua, Senior Partner, Singapore at Kearney and co-author of the report, said: “The region has undoubtedly achieved great strides in its overall digital economy, as we witnessed a rise in digital consumption and technology adoption rates over the past few years. However, there are still roadblocks to making the Internet truly inclusive for all consumers with fair returns to all players in the ecosystem. As change drivers, governments and business leaders need to proactively address the issues.”
Digital divide, broadband prices impeding Internet revolution
The region’s digital economy is estimated to be growing rapidly at a rate of 17% from 2021 to 2026, outpacing other regions and key markets such as the United States, Europe, and China.
Yet, despite this progress, about 20% of Southeast Asians still do not have access to the Internet. The region also has a long way to go when it comes to the adoption of the next generation of Internet connectivity, with 5G penetration rate still below developed countries at about 4 or 5%.
Furthermore, another challenge is Southeast Asia’s affordability gap for Internet services, with fixed broadband prices in Indonesia, the Philippines, Thailand, Vietnam, and Malaysia not meeting the affordability target of 2% of per capita income set by ITU/UNESCO in 2021.
Industry leaders envision an inclusive Internet
All technology industry leaders surveyed by Kearney in the region unanimously agreed that “accessibility, affordability, and inclusivity” is the most crucial component of the envisioned future for the Internet. It should allow every citizen to participate in the digital economy and digital society, with Internet prices being affordable to everyone regardless of income level, and accessible to people in all geographical locations.
“Resilience and reliability”, and “safety and security” were ranked second and third, with 80% of survey respondents agreeing on these top three attributes.
Privacy has notably been raised as a priority for stakeholders. Amidst an evolving cyber landscape, leaders agreed that the Internet should be reliable, safe, private, and secure. For the Internet to thrive in the long term, the benefits should be equitably distributed across all parties involved, and companies making the capital-intensive investments should be seeing a return on them.
Industry leaders also recognize that sustainability cannot be neglected in the wider digital transformation journey. Environmental principles should be integrated into the implementation and operation of the Internet. These can include the reduction of electronic waste via a circular economy and promotion of measures to achieve net-zero greenhouse gas emissions by reducing energy consumption and using renewable sources.
The ecosystem should embrace upcoming trends to realize its vision for the Internet
To achieve a more inclusive and advanced Internet landscape as well as overcome current challenges in the next five years, Kearney has outlined seven fundamental technology trends that leaders should embrace. According to the survey, the top seven trends ranked by industry leaders are cloud computing evolution to edge, network softwarization, sustainability, application programming interface (API) exposure, network slicing, non-terrestrial network (NTN) convergence, and management of bifurcation.
Notably, 92% of the region’s tech leaders expect cloud computing evolution to edge to be a significant technology trend in the next two to three years. Meanwhile 83% of them expect network softwarization to be a significant one in the next one to three years.
Seven technology trends that will shape the Internet in Southeast Asia
- Cloud evolution and edge – Cloud computing is seeing an emergence of use cases in areas such as autonomous vehicles, telehealth, artificial intelligence, and virtual reality, and as a result, cloud is shifting to the edge, pulled by data gravity and the need for lower latency as well as a growing need for data localization and residency.
- Network softwarization – The cloud is even extending into the heart of the Internet—the telecommunications network infrastructure—as networks become software running on a hybrid cloud. This trend, which has gained traction around the world over the past five years, will soon become more widespread in Southeast Asia.
- Sustainability – Sustainability has moved to the top of the C-Suite agenda for original equipment manufacturers (OEMs), ISPs, and hyperscalers in Southeast Asia and around the world.
- Application programming interface (API) exposure – The Internet of the future will also serve non-humans, and it’s about much more than connectivity. ISPs are evolving from traditional connectivity providers that offer a data pipe into platform business models that offer telecommunication APIs.
- Network slicing – Network slicing is the ability to offer differentiated connectivity services with dedicated network resources: the slice. These services can be tailored to the specific needs of third-party applications that can selectively access and control the services or to specific customers who want a dedicated virtual 5G network.
- Non-terrestrial network (NTN) convergence – NTN convergence is especially relevant for Southeast Asia, with its large rural, sparsely populated areas where mobile coverage is not economical. NTN convergence aims to integrate various NTNs (satellite) with mobile networks to provide seamless communication services.
- Management of bifurcation – The risk of bifurcation will need to be managed by using open technologies and digital commons to promote a shared, collaborative approach to developing and using internet and digital infrastructure.
Carlos Oliver Mosquera, Partner, Singapore at Kearney, Head of Kearney’s Technology Center of Excellence, and co-author of the report, said: “The future of Southeast Asia’s internet landscape is being reshaped by various global technology trends that are intrinsically linked to the network and connectivity infrastructure. By leveraging trends like edge computing, network cloudification and network slicing, businesses and governments can deliver more real time, immersive and interactive services to end-users.”
He added: “We are heartened to see countries such as Singapore already taking the lead in building an accessible Internet for all and we look forward to welcoming greater progress within the region’s Internet landscape as more leaders capitalize on the opportunities presented by upcoming global technology trends.”
