Submarine Networks in Asia, 2004-2013 …...Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | | Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | | info ...

Submarine Networks in Asia, 2004-2013

Presentation at

February 2014

Introductory Housekeeping •  TeleGeography focuses on international

networks. •  Internet refers to public IP traffic. •  Bandwidth refers to the combination of Internet,

switched voice, and private network traffic. •  Feel free to raise your hand if anything is unclear

as we go through the presentation. •  Also feel free to ask at the end of the

presentation if you would like me to expand on anything.

•  And I’m always available to answer any questions by email.

Internet Bandwidth in Asia and Southeast Asia

Global Internet Bandwidth

•  Growth is continuing to slow. •  In 2013, worldwide growth was 33 percent,

the lowest in ten years. •  Despite this, overall Internet capacity nearly

doubled from 55 Tbps in 2011 to 104 Tbps in 2013.

Global Internet Bandwidth

Declining Peak Internet Traffic Growth

•  41 percent is a key number. •  If peak traffic is 41 percent or higher, peak

traffic doubles every two years. •  Only Africa and Latin America exceeded 41

percent in 2013.

Concentration of Asian Internet Bandwidth, 2009-2013

•  There are hundreds of carriers in Asia, but a small number of operators account for a large percentage of capacity.

•  Asia is less concentrated than other regions. •  Smaller carriers’ share has increased slightly,

but no major changes the last five years.

Annual Internet Growth in Southeast Asia

•  Upgrades are inherently lumpy. •  Vietnam with large growth in 2010. •  Many of the faster growing countries tend to

be be small in terms of overall bandwidth. •  Singapore is unique in being both large and

still growing rapidly.

Internet Capacity, South Asia

•  Singapore towers over other southeast Asian countries.

•  Much of this is “hubbed” traffic that is passed on, while other countries’ traffic originates or terminates there.

•  Vietnam is the fastest growing of the four with a 5 year CAGR of 56.5%

Singapore Compared

Singapore Compared •  Comparing Asian hubs to New York and

London. •  As a percentage, the three Asian hubs have

grown compared to New York and London. •  Examining 5 year CAGRs, Tokyo, Singapore,

and Hong Kong have grown at 34%+ annually, while New York grew at 22% and London grew at 29%.

Subsea Cable Developments

Construction Cost of New Submarine Cables by Region, 2011-2014

•  With 40G and 100G technology, much of the recent surge in cable builds has been driven by factors unrelated to a shortage of capacity.

•  Construction is still expensive – a small number of cables represent the bulk of the costs. – ASE: Est. 430M USD – SJC: Est. 400M USD – APG: Est. 500M USD

Source of Lit Submarine Cable Supply by Route, 2008-2012

•  As mentioned, upgrades have supplied the bulk of new capacity.

•  Some routes like Trans-Atlantic have had no new cable builds the last five years.

•  For Trans-Pac, Unity is the only new cable in this timeframe.

Intra-Asia Bandwidth Supply and Demand, 2008-2012 (Tbps)

•  When we talk about bandwidth it is helpful to make distinctions between what is used, what is available, and what is possible.

•  Intra-Asia cables have over 14.4 Tbps of lit capacity. – 9.8 Tbps of this capacity is purchased. – 5.6 Tbps of this is used.

•  But Intra-Asia cables have a current potential capacity of 113 Tbps. Only 13% of Intra-Asia’s potential capacity is currently lit.

Intra-Asia Capacity by Cable

Intra-Asia Capacity by Cable •  Three cables make up a bulk of the capacity:

EAC-C2C, APCN-2, and FLAG/REACH NAL •  These three cables account for almost 11 Tbps

of capacity. – But also, keep in mind that cables like SMW-3,

though smaller in capacity connect to unique points (Myanmar) and provide unique routes (west coast of Australia).

•  313 Gbps of usage in 2004. •  2.3 Tbps of usage worldwide. •  23 cables connecting Asia.

2006 Earthquake off of Taiwan

2006 Earthquake off the coast of Taiwan

•  Taiwan Strait is a chokepoint for cables. •  December 26, 2006 – a 7.1 earthquake

occurs off of Taiwan’s southern coast. •  Only EAC and Guam-Phillippines

unaffected. •  Since them, TPE and AAG have been

built avoiding this zone.

•  2.3 Tbps of usage in Asia •  18.8 Tbps total usage worldwide. •  38 cables connecting Asia.

•  13.28 Tbps of usage in Asia •  93.9 Tbps of worldwide usage. •  46 cables connecting Asia.

Pricing

Median GigE IP, Q2 10-Q2 13

Median GigE IP, Q2 10-Q2 13 •  Prices in Asia have fallen dramatically the last

handful of years. •  Most prices have halved in the last three

years. •  Hong Kong and Singapore are now in the

single digits per Gig.

Intra-Asian Median Monthly 10 Gbps Wavelength Prices, Q3 2010-Q3 2013

Intra-Asian Median Monthly 10 Gbps Wavelength Prices, Q3 2010-Q3 2013 •  Intra-Asia transport prices have also fallen

dramatically. •  Price wars have led to routes like Singapore-

Tokyo ending at 1/4th of what they were in 2010.

Median 10 GigE IP Transit Prices in Major Global Cities, Q3 2010-Q3 2013

Median 10 GigE IP Transit Prices in Major Global Cities, Q3 2010-Q3

2013 •  But comparing Asia to other regions, prices

are “high.” •  Other factors here – such as many assets

being bought out of bankruptcy in the Trans-Atlantic.

•  NY and London are also much larger markets. – NY has 3x the IP bandwidth as Tokyo – London has almost 7x the IP bandwidth as Tokyo

Cody Williams (Washington D.C. Office) 202-741-0070

cwilliams@telegeography.com

Submarine Networks in Asia, 2004-2013 …...Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | | Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | | info ...

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