Expanding Regional Connectivity in Asia and the Pacific
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Expanding Regional Connectivity in
Asia and the Pacific:
I. Broadband Markets: State-of-Play
II. International Network Vulnerabilities
III. Terrestrial Infrastructure Initiatives,
Opportunities, and Challenges
Michael Ruddy
Director of International Research
Terabit Consulting
www.terabitconsulting.com
Part 1:
Broadband State of Play
in Hub Markets
www.terabitconsulting.com
Broadband State of Play in 5 “Hub” Markets
ESCAP Subregion Market
East and Northeast Asia China
South and Southwest Asia India
North and Central Asia Russia
The Pacific Australia
Southeast Asia Singapore
www.terabitconsulting.comChina
• China shows the strongest prospects for growth in
the region
– China is already the world’s largest broadband market,
having surpassed the US in 2008
– Currently 10x more fixed-broadband subscribers than
India
– Fixed-broadband subscribers will exceed 200 million by
2014
– 1.4 Tbps of international demand as of year-end 2011
• In terms of international bandwidth demand, still
trailing Japan (>2 Tbps) for the time being
www.terabitconsulting.comChina: Broadband Targets
• 12th Five-Year Plan calls for broadband speeds to
increase to 20 Mbps in urban areas and 4 Mbps
in rural areas by the end of 2015
– More than 8m fiber kilometers deployed; robust
FTTx market of 25m+ (although DSL still dominant)
• Ministry of Industry and Information Technology
indicated intention to lower broadband access
pricing
• ARPU of US$11 per month, while comparatively
low, should still allow for investment in 4G
networks
www.terabitconsulting.comIndia
• Extremely promising broadband growth, but timing uncertain
• 3G service launch was marred by weak coverage, incompatible
handsets, and “bill shock”
– Watching 1-hour sporting event on 3G = 300 INR ($5)
• Reliance planning nationwide $10 bil 4G rollout
– But some foreign 3G/4G investors have pulled out of market, citing
“regulatory uncertainty”
• Fixed-broadband market: 100Mbps VPON FTTH service launched in
2011
– However, affordable packages were limited to 2Mbps (and 8GB/mo).
Unlimited 100Mbps was priced at $1,500
• India’s middle- and upper-class ($4k+/household/yr.), while growing,
is less than 20% of population
• ‘In-between class’ ($1k-$4k/household/yr.) has remained steady at
more than 60% of population ==> greatest growth potential
www.terabitconsulting.comRussia
• Total international bandwidth reported to be as high as 2
Tbps as of year-end 2011
• Demand is largely westward - only a small percentage of
international demand is routed through Russia’s east
• Russian Internet content market is not yet mature
– Localization of western content prevails
• Russian-language content, combined with westward
international connectivity, makes Russia a hub for traffic
from CIS countries
• Much of the country’s terrestrial fiber investment has
focused on the China-Russia route in order to capture
Europe-Asia transit
– One China-Russia network operator claims that it has been able
to charge a premium of up to 300% for low-latency routes
www.terabitconsulting.comAustralia
• $40 billion Australian National Broadband Network
(NBN) underway
– More than 3.5 million residences and businesses set to
be connected by fiber by 2015
– FTTx connectivity serving more than 90 percent of the
population by 2021
– 1 Gbps target speed to the home
– Potential to be severely disruptive technology
• Limited number of carriers in Australia/New
Zealand (i.e. Telstra, Optus, TNZ, and Vodafone
Hutchison) has led to limited deployment of
international infrastructure
– Could prove an obstacle to the NBN’s success
www.terabitconsulting.comSingapore
• Population of 5 mil but serves as important transit
hub for southeast Asia
• Approaching 2 Tbps of international Internet
bandwidth; very high growth continues
• Next Gen NBN nationwide broadband buildout
• Approximately half of market controlled by Singtel
– #2: StarHub
– #3: MobileOne
• International demand mixed between Chinese-
language content, English-language destinations,
India, Malaysia, and Indonesia
www.terabitconsulting.comPart 2:
International Network Vulnerabilities
www.terabitconsulting.comFLAG Europe-Asia (1997) Source: The Undersea Cable Report 2012 © 2012 Terabit Consulting
FLAG Europe-Asia (1997)
99
Sea-Me-We-3 (1999)
Source: The Undersea Cable Report 2012
© 2012 Terabit ConsultingFLAG Europe-Asia (1997)
99
Sea-Me-We-3 (1999)
i2i (2002)
Source: The Undersea Cable Report 2012
© 2012 Terabit ConsultingFFLAG Europe-Asia (1997)
99
Sea-Me-We-3 (1999)
i2i (2002)
SAFE (2002)
Source: The Undersea Cable Report 2012
© 2012 Terabit ConsultingFFLAG Europe-Asia (1997)
99
Sea-Me-We-3 (1999)
i2i (2002)
SAFE (2002)
TGN-TIC (2004)
Source: The Undersea Cable Report 2012
© 2012 Terabit ConsultingFFLAG Europe-Asia (1997)
99
Sea-Me-We-3 (1999)
i2i (2002)
SAFE (2002)
TGN-TIC (2004)
Sea-Me-We-4 (2005)
Source: The Undersea Cable Report 2012
© 2012 Terabit ConsultingFFLAG Europe-Asia (1997)
99
Sea-Me-We-3 (1999)
i2i (2002)
SAFE (2002)
TGN-TIC (2004)
Sea-Me-We-4 (2005)
Falcon (2006)
Source: The Undersea Cable Report 2012
© 2012 Terabit ConsultingFFLAG Europe-Asia (1997)
99
Sea-Me-We-3 (1999)
i2i (2002)
SAFE (2002)
TGN-TIC (2004)
Sea-Me-We-4 (2005)
Falcon (2006)
Seacom (2009)
Source: The Undersea Cable Report 2012
© 2012 Terabit ConsultingFFLAG Europe-Asia (1997)
99
Sea-Me-We-3 (1999)
i2i (2002)
SAFE (2002)
TGN-TIC (2004)
Sea-Me-We-4 (2005)
Falcon (2006)
Seacom (2009)
I-Me-We (2010)
Source: The Undersea Cable Report 2012
© 2012 Terabit ConsultingFFLAG Europe-Asia (1997)
99
Sea-Me-We-3 (1999)
i2i (2002)
SAFE (2002)
TGN-TIC (2004)
Sea-Me-We-4 (2005)
Falcon (2006)
Seacom (2009)
I-Me-We (2010)
Europe-India Gateway (2011)
Source: The Undersea Cable Report 2012
© 2012 Terabit ConsultingFFLAG Europe-Asia (1997)
99
Sea-Me-We-3 (1999)
i2i (2002)
SAFE (2002)
TGN-TIC (2004)
Sea-Me-We-4 (2005)
Falcon (2006)
Seacom (2009)
I-Me-We (2010)
Europe-India Gateway (2011)
Gulf Bridge International (2012)
Source: The Undersea Cable Report 2012
© 2012 Terabit ConsultingFFLAG Europe-Asia (1997)
99
Sea-Me-We-3 (1999)
i2i (2002)
SAFE (2002)
TGN-TIC (2004)
Sea-Me-We-4 (2005)
Falcon (2006)
Seacom (2009)
I-Me-We (2010)
Europe-India Gateway (2011)
Gulf Bridge International (2012)
MENA (2012)
Source: The Undersea Cable Report 2012
© 2012 Terabit ConsultingUNDERSEA CABLE CHOKE POINTS AFFECTING ASIA
Strait of Sicily (145km) and the Mediterranean
Luzon Strait (250km)
Egypt, the Red Sea, and Bab-el-Mandeb (30km)
Strait of Malacca (3km)
Source: The Undersea Cable Report 2012
© 2012 Terabit ConsultingPart 3:
Terrestrial Infrastructure Initiatives,
Opportunities, and Challenges
www.terabitconsulting.comCarrier-Operated Terrestrial Networks:
Challenges
• High construction costs make it difficult for
terrestrial networks to compete head-to-head on
those routes that are already efficiently served by
submarine cables
– e.g. the China-India (Yadong-Siliguri) path crosses
difficult, mountainous terrain and still only serves a
narrow point-to-point market
• Carriers often overprice capacity on their domestic
portions of the network
• Very difficult to establish and maintain end-to-end
network performance matrices
• Carriers often wary of purchasing capacity on cable
operated by a competitor
www.terabitconsulting.comObstacles to the Democratization of
Bandwidth
• The majority of broadband deployment in Asia is in
coastal and urban areas
• Markets without coastlines or with lower
population density are increasingly falling behind
• Many multi-national terrestrial fiber optic networks
are structured to allow operators with submarine
cable hubs to profit from interconnection
– Landlocked or underserved coastal nations become
dependent upon larger coastal markets
• Pricing of international bandwidth in Asia remains
expensive throughout the region
www.terabitconsulting.comIP Transit Remains Extremely Expensive
Throughout Asia
• Compare to less than $5/Mbps in USA
www.terabitconsulting.comTerrestrial Networks as
a Complement to Undersea Cables
• Asian nations experience some of the highest rates of Internet
downtime in the world due to dependence on a handful of
submarine cables
• Up to 90% of international capacity purchased on submarine
cables in Asia is unprotected – customers are therefore
desperate for terrestrial redundancy options within Asia, but
affordable, coherent terrestrial solutions are rare
• Secondary markets need more options: e.g. Mumbai, as
South Asia’s primary undersea gateway, serves as the only
logical IP transit hub for most South Asia Association for
Regional Cooperation (SAARC) countries
• Terrestrial networks can offer lower latency on some routes
– Increasingly important for search engines, which report higher click-
through rates when latency is lower
www.terabitconsulting.comNature of Asian Bandwidth Demand
• As of 2012, approximately 50% of Asian
international traffic is intraregional
• Vast majority of the region’s traffic is routed via
undersea cable
– e.g. Only about 10% of Asia-Europe traffic is
currently routed terrestrially
www.terabitconsulting.comCharacterizing Terrestrial Deployment in Asia
• Six important categories of terrestrial fiber optic
deployment:
– Asia-to-Europe and China-Russia transit networks
– Subregional initiatives
– Southeast Asian multi-national networks
– China-India cables
– New West Asia/Middle East Networks
– Other transborder (bilateral) links
www.terabitconsulting.comAsia-to-Europe and
China-Russia Transit Networks
• Trans Asia Europe (TAE)
– Conceived in 1990s; very low capacity; missing trans-Caspian links
• China-Russia Networks
– Trans Europe Asia (TEA) (Rostelecom) (Upgraded to 200 Gbps in
2012)
– Europe-Russia-Asia (ERA) / China-Russia-2 / Eurasia Highway
(TransTeleCom)
– Europe-Russia-Mongolia-China (ERMC) via Mongolia Railway
(2004)
– Europe-Kazakhstan-Asia (EKA) / Information Silk Road
• Trans Eurasian Information Superhighway (TASIM)
– Frankfurt-Hong Kong
– China, Kazakhstan, Azerbaijan, Georgia, Turkey (Including trans-
Caspian link)
• LION pan-regional network along Asian Highway ROW
– Defer to Abu Saeed Khan’s presentation
www.terabitconsulting.comSubregional Initiatives
• Greater Mekong Subregion (GMS) Information
Superhighway
– Cambodia, China, Laos, Myanmar, Thailand, Vietnam
– Supported by Asian Development Bank
• South Asian Subregion Economic Cooperation
(SASEC) Information Superhighway
– Bangladesh, Bhutan, India, Nepal
– Supported by Asian Development Bank
www.terabitconsulting.comSoutheast Asian Multi-National Networks
• China-Southeast Asia Cable (CSC) (2001)
– China, Vietnam, Laos, Thailand, Malaysia,
Singapore
• Also Greater Mekong Subregion Information
Superhighway
• Thailand-Cambodia-Vietnam-Hong Kong
(2012-2013)
– TCC (Thailand), VTI/VNPT (Vietnam), NTC
(Cambodia), DHT (Hong Kong)
www.terabitconsulting.comChina-India Networks
• China-India Networks
– China-India Cable / Another Gateway to India (AGI)
(China Telecom)
– China-India (China Unicom)
www.terabitconsulting.comNew West Asia/Middle East Networks
• Europe-Persia Express Gateway (EPEG)
• Regional Cable Network (RCN)
• Jeddah-Amman-Damascus-Istanbul (JADI)
• Egypt-Jordan-Saudi Arabia
• EPEG/RCN/JADI designed to bypass Egypt;
however, sanctions prevent American
operators from participating in projects
passing through Iran or Syria
www.terabitconsulting.comNotable Transborder (Bilateral) Links
• Bhutan-India (2009)
• Myanmar-China (2008)
• Afghanistan to Tajikistan and Uzbekistan
(2009)
• Laos-Cambodia (2010)
• Cambodia-Vietnam (2012)
• Bangladesh-Myanmar and Bangladesh-India
(2012-2013)
• China-Pakistan (Karakoram Highway/Khunjerab
Pass) (2012-2013)
www.terabitconsulting.comConclusions
• Bold, next-generation domestic broadband initiatives are underway
throughout the region
– each faces a variety of obstacles
• Undersea cable “choke points” pose a significant threat to Asia’s
network reliability
– and, by extension, its economic well-being
• Terrestrial networks are the logical solution for network redundancy
– however, they should be viewed as a ‘complement’ and not a
‘competitor’ to undersea networks
• Drawbacks of carrier-owned international terrestrial networks need
to be addressed
• Obstacles to the democratization of bandwidth need to be
overcome
• Significant progress has been made in the deployment of terrestrial
fiber optic infrastructure, but a more harmonized approach to
accessible multi-national connectivity is needed (e.g. LION)
www.terabitconsulting.comThank you! www.terabitconsulting.com
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