Internet Development in Asia

Peng Hwa Ang
School of Communication Studies
Nanyang Technological University, Singapore

Chee Meng Loh
National Computer Board, Singapore


Strong economic growth, affluence, and the need for information suggest that the Internet should grow explosively in Asia. This paper is an attempt to determine if that is true and to uncover the patterns of Internet development in Asia. It begins by putting Asia in the Internet context. Internet development has only begun to take off in 1995. Before that, by some measures, Internet growth lagged behind even Africa. Next, the paper sketches the development of the Internet in several Asian countries. It then concludes with some themes from the sketches.

In general, Asian users have a more purposeful attitude toward the Internet than their Western counterparts. This attitude is reflected by the more deliberate approach of both governments and users. Governments want to use the Internet the way they use traditional media--as a form of control for national development, however that may be defined. Net access in Asia therefore tends to be more centralized, dominated by educational and government or government-related institutions. Users want to use the Internet for commerce; where there is a commercial push, Internet growth is strongest. Both government and users share a common interest in trying to reduce foreign domination of the Internet. The path adopted by China suggests that it may be trying to develop a giant domestic Intra-net. Many countries have also declared that they are looking into regulatory issues. The paper notes that there are many barriers to the Internet in Asia. There is poor advanced infrastructure. There are high telecommunications costs, due in part to monopoly telecommunications entities. Penetration of PCs is low. English, the dominant language on the Internet, is the second language in most Asian countries. The paper concludes that despite these barriers, the Internet will grow at a much more rapid rate in Asia. Many of the barriers will be overcome in due course. Governments are also pushing schools and businesses to get on the Internet.


The Internet comes at an interesting time for Asia. The strong economic growth in the region suggests that Asia has the money, and the need, for information that the Internet brings. This, coupled with the collapse of socialist ideologies regarding the control of information, would suggest that the Internet is poised for dynamic growth in Asia. Has this been true? Will the Internet grow exponentially in Asia? This paper is an attempt to answer these questions through reviewing and uncovering patterns of Internet development. It begins by placing Asian Internet in the international context. It then offers thumbnail sketches of the Internet in several Asian countries. Finally, it concludes by drawing out some common threads.


Perhaps this is only stating the obvious, but it should be noted at the outset that Asia is not one concordant whole. Apart from the observable differences in culture, sometimes even those of similar cultures are hostile to each other: witness North and South Korea, or China and Taiwan. Second, there are uneven patterns of economic and national development in Asia. The difference may be as stark as, again, North and South Korea, or less stark as between Hong Kong and China's neighboring southern provinces. Often, the differences are evident just in physical infrastructure, such as roads and railways, alone. The differences are exaggerated when it comes to advanced infrastructure such as telecommunication lines for the Internet.

These economic and social differences are reflected in literacy. While literacy is typically high, many Asian countries use English as their second language. This has implications for Internet diffusion and use.

Growth by domain

The Internet is in its infancy in Asia. The first Asian institutions to use something that resembled the Internet were Japanese universities that linked themselves up through a computer network in 1984, just over a decade ago (Lammers, 1995).

The diffusion pattern suggests that Asia is only beginning the stage of explosive growth. Table 1 shows that in 1994, Asia recorded the second lowest Internet domain growth rate between 1994 and 1995, lower even than Africa. In the table, compiled from a report by Mark Lottor of consulting firm Network Wizards, only the Pacific countries had a lower growth rate. But in the first half of 1995, Asia's Internet growth rate shot ahead, second only to Africa. In contrast, the growth rate of the industrialized countries has slowed.

Table 1. Internet Growth by Region

(1) % of world, January 1994
(2) Growth %, January 1994 to January 1995
(3) % of world, January 1995
(4) Growth %, 4th Quarter 1994
(5) % of world, July 1995
(6) 6-month increase to July 1995, %

Region            (1)      (2)       (3)     (4)       (5)     (6)
North America    68.06     100      68.11     26      68.4      35
Western Europe   22.25      89      19.71     22      22.0      40
Pacific           4.58      70       3.19     25       3.8      31
Asia              3.28      87       2.84     19       3.5      51
Eastern Europe    0.80     132       1.06     40       1.00     45
Africa            0.44     148       0.65     29       0.62     53
Middle East       0.28      98       0.28     33       0.29     41

Total           100         96     100        24     100        37 
Source: Mark Lottor, cited in Internet Society, 1995a and 1995b.

Growth, however, was mainly in six countries: Japan, Korea, Taiwan, Hong Kong, Singapore and Thailand. They are among the 50 countries with the highest number of Internet hosts (Internet Society, 1995b). (See Table 2.)

Table 2. Internet Hosts and Their Growth

(1) July 1995 new hosts
(2) 6-month growth %, January 1995
(3) 1994 new hosts
(4) 1994 growth %
(5) 3-year growth %

Country      (1)    (2)    (3)     (4)    (5)
Japan      159,776   40   96,632    86   1,029
Korea       23,791   24   18,049   101   1,103
Taiwan      16,166   10   14,618    83   1,710
Hong Kong   15,392   19   12,437    52   2,725
Singapore    8,208   36     *       *     *
Thailand     2,481   19     *       *     *
USA        113,226   67   37,615   475  31,155
Source: Mark Lottor, cited in Internet Society, 1995a and 1995b.
* Data not available in February 1995 report.


Japan is the Internet giant in Asia. Two-thirds of the more than 150,000 Internet hosts in Asia are in Japan. Initially, Japan was slow getting into the Internet. It was in 1989 that the first Japanese universities got onto the Internet. But in 1991, U.S. firms began using the Internet for commerce and the Internet began to develop. Public access started in September 1993 by AT&T Jens of the U.S. (Terry, 1994). Growth took off in mid-1994 with the promotion of commercial Internet applications. Compared with the United States, however, Japan has a way to go: with a population half that of the United States, Japan had 3.2 million registered Internet users. In contrast, the United States, with twice the population, has an Internet community variously estimated at between 25 and 35 million. It is estimated that there are more than 50 Internet access providers (IAPs) in Tokyo, albeit half of them are small, serving perhaps as few as several hundred users (Market Intelligence Center, 1995b).

The major difficulty has been language. Most of the communication on the Internet in Japan is in Japanese. A recent Japanese version of Netscape has helped. Many of those who venture into the English-writing world can read but not write English, so they are often "lurkers."

There may also be cultural forces at play: the Japanese apparently prefer to receive than to send information. A recent survey of Internet use found that "Receiving information is more common" accounted for 63.7 percent, compared with just 6.4 percent who responded "Sending information is more common" (Nikkei Weekly, 18 September 1995).

Further, fewer than one-third of Japanese companies are connected or considering connecting to the Internet. Most of these are larger companies. Apparently, Japanese companies think that the Internet is affordable only to large companies (Nikkei Weekly, 18 September 1995).

Contributing to this idea is the monopoly local telecommunications provider, Nippon Telephone and Telegraph (NTT), which reduces any prospect of drastic change. The Internet, however, is changing that aspect of Japanese culture. It has made it acceptable to exchange information among the Japanese academic community. Before, information was given on a need-to-know basis (Lammers, 1995).


China is a newcomer to the Internet community. The first Internet link was established only in 1993 at the Institute of High Energy Physics in Beijing (Carrol, 1995). Public access was launched in January 1995 with the help of the U.S. long-distance telephone company Sprint (Economist 1995a). The program, unofficially titled the China Internet Project, or ChinaNet, is run by the Ministry of Posts and Telecommunications. It aims to provide, eventually, Internet access to 360,000 state enterprises and 8.6 million private enterprises in 600 Chinese cities (Carrol, 1995). In early 1996, however, despite a population base of more than 1 billion, there were fewer than 100,000 users. Public subscribers in the two largest cities, Beijing and Shanghai, number just between 3,000 and 4,000 people in early 1996 (Yu and Huang, 1996b).

Many users feel it is difficult to acquire information from the Internet, and they also want useful information in Chinese--reading English is not comfortable for many users. A survey shows that about 73 percent of online users use only e-mail services on the network, and most of them think information from the Internet is useful only for research (Yu and Huang, 1996a).

China, however, is a pioneer in Internet regulation. China's strategy for the Internet appears to be aimed at controlling access and not allowing foreign firms to offer information. In February 1996, new regulations were passed banning transmission of state secrets, information harmful to state security, and pornography over international computer links. But the new laws also required Internet users, including institutions, to register with the police and directed that all public Internet access go through computers managed by the Ministry of Posts and Telecommunications (Newsbytes, 1996). The laws make China the most regulated environment for the Internet in the world.

Already, China had allowed only sci.* and comp.* Usenet groups. Chinese officials have also told the first author that they plan to model the country's regulations after Singapore (Liu, 1995). It should be noted that the laws are targeted at international computer links. There appears to be an effort to develop a domestic information service. One of the main impediments to Internet growth is the high cost. So, domestic links, which offer cheaper rates, are growing. One online service reported that half its users do not use the full Internet service, which costs 40 yuan (US$2.90) an hour to use and is seen as confusing and foreign. They opt for just the domestic service at 3 yuan (US$0.22) an hour (Yu and Huang 1996a).

Second, despite the regulations, there is an effort to wire China for the Internet. In March, one month after new regulations to control the Internet were announced, it was reported that U.S. Sprint signed a multimillion dollar deal with Jiangsu Provincial Data Communications Bureau to install network servers in 11 cities in the province. Jiangsu is the province that encompasses Shanghai. Also, the same article reported that the Ministry of Posts and Telecommunications has plans to set up the Internet literally in the four corners of China--west to Xi'an, south to Chengdu, northeast to Shenyang, and in the heart Wuhan, Shanghai and Guangzhou to the east. All are cities with established universities (Yu and Huang, 1996b).


Despite its widely declared intention to be a "wired island," Singapore was slow off the mark with the Internet. In typical Singapore style, however, once it was decided that the Internet was the thing to do, there was an official push and the Internet has taken off in a hurry. In 1995, Singapore was one of the fastest-growing Internet domains in both absolute and percentage terms.

Public access of the Internet was available in 1994 and there are now three IAPs. Total subscribers number 100,000 out of a population of 3 million. Singapore recently promulgated new laws regulating content for the Internet. All contents of a "broadcast nature" are deemed to be licensed; content providers who breach the local laws regarding content (such as pornography) will be told to remove such objectionable content or have the license revoked (Singapore Broadcasting Authority, 1996).

Meanwhile, the Internet has revealed the inadequacies of laws dealing with the electronic media. An Internet user forged another user's e-mail address and posted material on the Usenet group soc.culture.singapore. Contrary to official expectations, no Singapore law had been broken. Instead, the victim of the forged postings is taking the perpetrator to civil court.

Hong Kong

As the city with the freest business environment, Hong Kong has the highest number of IAPs in Asia after Japan--43 in early 1996. With such keen competition, prices have fallen to as low as HK$168 (US$21.70) per month for unlimited usage. More typically, commercial providers charge more than HK$180 (US$23) per month, with further charges levied for each minute the subscriber remains online (Armstrong, 1996).

In March 1995, regulators had closed down 30 Internet access providers on the grounds that they did not possess the proper regulatory documentation. But no such documentation existed and had not been required. Later, the Hong Kong government allowed them to reopen and granted them legal status (Armstrong, 1996).


E-mail through BITnet was made available by the Ministry of Education in 1987. As of September 1995, there are an estimated 250,000 to 300,000 users. Academic institutions are host to at least 60 to 70 percent of users. But if the trend in the West is any indication, this percentage is likely to fall as other IAPs come onstream (Market Intelligence Center).

Taiwan, however, only allows wholly Taiwanese companies to provide Internet service. Overall, signs are that steps are being taken to make it easier to access the Internet. Where rates and service are a problem, they are being addressed. Taiwan has held hearings on the handling of Internet access by the Directorate General of Telecommunications, which has the mandate to control access. Users had been unhappy with the high rates and poor service (Carrol, 1995).


Of all the countries in Asia, the Philippines has the greatest potential to exploit the Internet. It is the third-largest English-speaking country in the world; it has fastest Internet access in Asia using asynchronous transfer mode (ATM) technology and an E1 link to allow transmission speeds of 2.4 megabits per second against Japan's 1.5 megabits per second using a T1 link (Newsbytes 1995a, 1995c).

Despite a deregulated environment that allows for 20 IAPs, the Philippines is projected to have only 40,000 users at the end of 1996, according to a study by the University of Asia and Pacific (ibid). Cost is probably the biggest obstacle.


The Internet was introduced into Indonesia by the academic community, but it is the commercial sector that has pushed its development. There are five IAPs, two government and three private companies and a waiting list of 15 others. Internet users in early 1996 totalled 20,000 to 25,000, concentrated in the capital Jakarta and the major high-tech town Bandung. Reflecting the commercial interest in the Net, almost half the users are businesses, as shown in Table 3 (Purbo, 1996).

Table 3. 1996 Internet Users Composition in Indonesia

Commerce                      42.8%
University                    29.5
Government                    20.9
Research                       5.8
Nongovernment organizations    1.0

Source: Purbo, 1996. 

Growth among the users is estimated at 20 percent annually. At this rate, Indonesia will reach only 100,000 users in the year 2006 (Sari, 1996). The regulatory environment in Indonesia for the Internet is baffling. In 1994, Indonesia closed down several newspapers and magazines for threatening national stability. Journalists in one of the banned publications, the respected Tempo magazine, took it online (http:/ Indonesian Information Minister Harmoko was quoted as saying, "They may enter the Internet, everyone may."

In short, because there are no laws governing the Internet at present, Harmako let the online edition go ahead, rather than draft new legislation to extend the existing rules. Later, at a regional conference, he said, "The flow of information cannot be checked, but there is no need for us to be too concerned. Information flow through the Internet is sometimes positive, but at other times negative, such as pornography." Thus, although Indonesia appears to be aware of some of the negative material, it is not taking action (Newsbytes, 1996). Indonesia, however, has been criticized in the political spheres on issues such as human rights and over East Timor. On these, it said it planned to counter negative information about Indonesia (Jacob, 1995).


Malaysia's attitude toward the Internet has been a start-stop process. It was the first country in South-East Asia to allow public Internet access. The primary gateway, JaringNet, is one of the few in the world that allows users to select their domain names. But as at mid-1995, there were only an estimated 5,000 users (Yap, 1995).

Things, however, are changing. The universities are beginning to allow greater Internet use and access. The Seventh Malaysia Plan will incorporate the Internet as part of its National Information Technology policy. All schools are to be equipped with resource centers linked to the Internet. Malaysia has four IAPs (The Star, 1996).

On the regulatory front, the picture is less clear. On the one hand, the Deputy Prime Minister of Malaysia, at a conference in Kuala Lumpur where the Internet was discussed, said that they would not censor the Internet. That same week, the Information Minister at a meeting in Singapore, said his country was considering laws to sieve out "pornography and other nonsense" on the Internet. He said there might be a need to review Malaysia's broadcast laws, and added that his government was watching how other countries would implement new Internet laws (Business Times, 1996). And earlier, Malaysian ministers had publicly warned its scholarship holders that the scholarships will be terminated if they use the Internet to "disseminate false information and undermine the image of the nation" (Straits Times, 1995e).


The first users of the Internet in India were its leading universities, through a service called Ernet in 1989 (Straits Times, 1995a). Public access was made available in August 1995. It costs about US$160 for up to 250 hours for private individuals and four times that for companies. Although frequently proclaimed the world's largest democracy, Indian authorities have guarded control over information flow. Some reports suggest that Internet access providers have to use the Indian international telecommunications monopoly VSNL. The trend, however, is to privatize the broadcasting and telecommunications industry as part of the regulatory reform (Straits Times, 1995d).


The Internet was introduced to Thailand in 1988, primarily for education and research. It began to take off when Thai Social and Academic Research Network (ThaiSarn) was founded and a permanent communication link to international networks was established. The public could first access the Internet in 1994 through Internet Thailand Company, set up by the National Electronics and Computer Technology Center (NECTEC), which has a mandate to promote information technology. There are four IAPs (Market Intelligence Center 1995b).


Internet access in Cambodia is being driven by international nongovernmental organizations (NGOs). As of early 1996, there was no Internet ramp in Cambodia and therefore no real IAPs. There are, however, some "store-and-forward" services with a little more than 100 users. The first such service was said to be started by Norbert Klein, a worker in an international NGO, in early 1994. He said, "I created it to make it possible for a Cambodian to participate in a two-year international Master of Science in Sustainable Tropical Agriculture degree program for which he needed e-mail connection."

Later in 1994, another store-and-forward system, the CCCNet, was created to serve the foreign NGOs in Cambodia. There are about 50 active users. It was also in 1994 that a commercial e-mail and fax-forwarding service--UniLink--started to operate. Cambodia recently registered .kh as its major domain name (Klein, 1996).


Mongolia was connected to the Internet only this year with help from Datacom, the new Internet Access Provider, as well as Sprint, PaAmSat, Comstream, and the National Science Foundation.

Patterns of growth

There are about 50 million Internet users worldwide. The authors estimate that Asia, with half the world's population, has about 10 percent, or 5 million, of the Internet users. Of these, almost two-thirds are in Japan (Asia Magazine, 1-3 September 1995).

The brief survey above shows that Internet development is uneven in Asia, both within and among countries. Often, the Internet is introduced into a country by universities. Growth has been fastest where there is a commercial push, aided by the availability of public access. Often, this means that the major cities get access first. (An exception is Cambodia where the Internet is being pushed by nongovernmental aid and development agencies. But the slow pace of growth proves the point.) The pace of growth is dictated by history, culture, language and economics.

First, many Asian countries aim to use all media, including the Internet, for national development. Hence there is a tendency to attempt to regulate the Internet. There are also attempts to exclude or reduce foreign domination of Internet access and content. China appears to be heading in that direction. Given the size of the consumer market, it could support a massive national Intra-net.

Language has been an impediment to growth. An official at I-Net Technologies, an Internet access provider in South Korea, was quoted as saying: "It's not only English you have to understand but American culture, even slang. All in all, there are many people who just give up" (Straits Times, 1995b). But that is changing as the various interfaces accommodate the Asian scripts and there is more content in Asian languages.

Why Asians use the Internet

Asians apparently adopt a much more serious attitude toward the Internet. Pricing may have played a part in conveying the perception that it is expensive, and therefore more suited for "serious" purposes. A recent survey by the Telecommunication Authority of Singapore, which licenses Internet Access Providers, found that 38.4 percent of subscribers cited communication as the main reason for using the Internet. This was followed by the ability to access databases (32.9 percent) and research (16.6 percent). In other words, more than 85 percent of users gave these three functions as key reasons for their subscribing to the Internet. (See Table 4.)

Table 4. Principal Reasons for Subscribing--Singapore (multiple reasons not allowed)

Communication       38.4%
Access databases    32.9
Research            16.6
Curiosity            3.7
Discussion groups    2.7
Low cost             2.4
Recreation           1.2
Business             1.1
Other                1.0

Source: TAS, September 1995. 

These are much more "serious" reasons than those given in the Hermes survey (see Table 5), which found that browsing, and fun and games continue as primary reasons for using the Web. Of course, the two surveys are not directly comparable. Nevertheless, the results are, at the very least, suggestive of different attitudes toward the Internet.

Table 5. Principal Reasons for Subscribing--Hermes (multiple reasons allowed)

Browsing             79%
Entertainment        64
Work-related         52
Educational          50
Business research    40
Academic research    35
Shopping             11

Source: 4th Hermes Survey on Commercial Uses of the Web.

The different attitudes suggest that it is more the "knowledge function" than the "entertainment function" of the Internet that has the will to spur growth. Japan illustrates this clearly: commercial applications of the Internet were the spark of growth. In other parts of the Asia, more and more newspapers are going online.

Regulatory issues

A major issue that many Asian countries are wrestling with is the regulatory environment. In all the countries where the Internet has been more widely used--Japan, Hong Kong, Taiwan and Singapore--the Internet has posed new legal issues. Japan recently made some arrests for pornography on the Net. In Singapore, the first lawsuit for a forged mail-header has been filed. In Taiwan, there have been calls for regulation after someone used a cybercafe terminal to hack into the Web page of the ruling political party, changing the text and hotlinking it to Playboy (Asian Pacific Networking Group, 1996). The approaches shown by China and Singapore suggest that the Internet will be more regulated in Asia, which is consistent with the regulation of the traditional print and broadcast media.

Barriers to growth

Besides cultural and linguistic barriers to the Internet, Asian countries face other barriers. First, much of Asia lacks advanced infrastructure. Three IAPs have formed a consortium, Asia Internet Holdings, to establish a pan-Asia Internet backbone to link Japan, Hong Kong, Singapore, and the United States with high-speed T3 (45 megabits per second) lines. But the intent is to help multinational corporations use the Internet as a platform for their respective private networks (Newsbytes, 1995b).

Second, telecommunication charges are higher than in, say, the United States; a T1 line can cost 10 times that in the United States. This is attributable, in part, to monopoly telecommunication entities (Hamilton, 1994). There is also low computer literacy and low PC penetration. There is a low ratio of networked computers, unlike that in the United States (Hamilton, 1994). These three barriers, however, are likely to be lowered over time as Asia develops.


The Internet is an advanced technology with all the accompanying promises and threats to change society. Asia wants those promises fulfilled. Many Asian countries are promoting the Internet by establishing schemes to encourage educational institutions and businesses to connect. The Asian Internet growth rate will therefore be very high, especially compared with the industrialized world.

But Asia also wants to keep the threats at bay. More and more countries have said that they are looking into the issue of Internet regulation. However, Asian countries differ in the extent of liberalism. Some, like the Philippines, Hong Kong, and Japan, allow commercial IAPs to flourish, letting market forces decide the level and quality of Internet services. Others, like Singapore, Thailand, Taiwan, and Malaysia, are more careful about allowing commercial IAPs to proliferate. Whatever the case, Asia is not ignoring the Internet. It is wrestling with it.


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