 | Issue: | Asia-Pacific II 2006 |
| Article no.: | 6 | |
| Topic: | Asia’s bandwidth revolution | |
| Author: | William (Bill) Barney | |
| Title: | President and CEO | |
| Organisation: | Asia Netcom | |
| PDF size: | 44KB |
About author
William (Bill) Barney is the President and Chief Executive Officer of Asia Netcom, having previously served as its chief operating officer, the same position he held in Asia Global Crossing (AGC). Mr Barney presided over the post- Chapter 11 transformation AGC into Asia Netcom, one of Asia’s leaders in IP and WAN services. Mr Barney previously served as President of Asia Pacific at MCI WorldCom and UUNET, where the company received numerous accolades for its technological leadership in IP services and was recognized twice as Asia’s Telecom Employer of the Year. Prior to WorldCom, Mr Barney was Vice President of Global One, and managed operations in the Middle East, South Asia and Africa. Mr Barney began his career with AT&T, where he held a number of key sales and management roles in the international division and domestic sales group. William Barney received his MBA from Columbia University and a Bachelor of Arts degree from Wesleyan University.
Article abstract
The astounding economic growth in the Asia Pacific region is driving similarly astounding growth in network usage. To meet demand and increase their ability to handle the next generation of services that increasingly sophisticated users require, network operators and service providers are investing substantially in increased, upgraded, network capacity. IPTV, Internet Protocol TV, greatly increases bandwidth requirements and will drive residential demand. Increased VoIP, Voice over IP, traffic is already starting to drive growth in both business and residential demand.
Full Article
The 2006 United Nation’s Humans Settlement Programme (UN Habitat) report states that Asia is home to almost 60 per cent of the world’s population. Not surprisingly, China and India are the two most populous countries in that region. There is little doubt that Asia will be the main driver for the world’s economy going into the 21st Century. Already, the top three Asian markets, China, Japan and India, today boast a combined GDP, Gross Domestic Product, of US$15.7 trillion, surpassing that of North America (US$13.5 trillion) and the European Union (US$12.2 trillion). If we consider the GDP of other major Asian economies such as South Korea, Indonesia, Australia, Taiwan, Thailand, Philippines and Pakistan, which together add another US$4.5 trillion in GDP to the region, the total GDP of the top ten Asian markets rises to an astounding US$20.2 trillion. This figure contributes one third of the worldwide GDP for 2005, according to statistics compiled by the US government. More importantly, both China and India are expected to post annual GDP growth rates of some 9.2 per cent and 7.1 per cent respectively, equalling some US$1 trillion in combined market value gains every year, the figures state. In comparison, the US GDP is expected to grow at about 3.5 per cent, well below the world average of 4.3 per cent, and the 5.1 per cent average GDP growth of the top ten Asian nations. The tremendous economic progress in Asia is matched only by the rapid development of its telecommunications industry. In the past five years, Asia’s telecommunications market has surged to the forefront in every aspect, with the number of fixed and mobile users growing exponentially. Today, the region caters to over 50 per cent of the broadband users globally, and nearly half of the world’s fixed telephones, as well as some 41 per cent of the world’s mobile users can be found there. Asia is also a hotbed for innovation, evident in the rapid adoption of wireless Internet services in Japan, the proliferation of broadband connections in Korea and, more recently, the roll out of IP-based television services in Hong Kong. It is no wonder, then, that bandwidth demand is accelerating. A report by research firm Telegeography, says that while the rate of global Internet bandwidth expansion remained fairly stable in 2005, increasing 42 per cent compared to 45 per cent in 2004, “(the) most rapid traffic growth came on intraregional routes within Asia and within Latin America. Traffic within these routes increased 102 per cent and 336 per cent, respectively.” More tellingly, Telegeography observes that intra-Asia traffic usage grew from 2.3 Gbps in 1998 to 318.7 Gbps in 2005, resulting in a compound annual growth rate of 322 per cent in that period. Thanks to market deregulation, competition has made a positive impact on usage. Demand for telecom services has grown exponentially in under a decade in Asia. Intra-Asia traffic should hit 917.8 Gbps by 2007, says Telegeography. Most would accept that while exuberant traffic growth came crashing down when the telecoms bubble burst a few years ago; the situation today is markedly different. The ‘rationalization’ of industry players and a growing, sophisticated user base in Asia are giving the industry the stability it needs. According to Internet World Stats, Asia accounts for 36 per cent of the global Internet users as of March 2006, with Chinese, Japanese and Indian users making up the majority of that figure. Gartner forecasts that the total intra-Asia Internet backbone bandwidth is growing at a compounded annual growth rate of some 41.6 per cent, from less than 200 Gbps in 2002 to a forecasted total of 1,671 Gbps by 2008. So while Asia, along with the rest of the world, has suffered in the aftermath of the telecoms bubble bust, the market is now recovering and the demand catching up with supply. Telegeography also notes that demand in many regional markets has grown fast enough to offset the effect of price declines on gross revenues. They argue that international Internet traffic growth – a reasonable proxy for IP Transit demand – was so rapid in some cities that revenues for IP Transit appear to have increased considerably in 2005. “For example, while transit prices in Hong Kong declined by 27 per cent between 2004 and 2005, IP traffic grew 94 per cent,” says the research firm, adding that there are growing signs that prices would continue to stabilize in the months ahead. All signs point to a recovering market for bandwidth, and to a growing base of users who are jumping onto the Internet for personal as well as business needs. What does this mean for Asia? If we are reading the tea leaves right, it means that the burgeoning demand for bandwidth will outpace the supply in the near term. At present, there are only a handful of undersea cables that serve the Asia Pacific region, such as SEA-ME-WE3, EAC and APCN2. Of these, the EAC is a 19,500km privately owned fibre-optic cable network that spans both northern and southern Asia, with a capacity of 80 Gbps, upgradeable to 2.5 Tbps, terabits per second. Its owner is already scaling up cable capacity this year, adding an additional 40 Gbps through its new Qingdao landing in China, to meet rising bandwidth demand. This is in anticipation of China Netcom’s involvement as the official fixed line telecommunications partner at the 2008 Beijing Olympics, which will showcase new sophisticated IP applications for broadcast. In the past five years, the Internet has transformed itself from a platform where computers simply exchanged information into a dynamic, application-driven medium, enabling users to interact with each other, play games online and communicate in real time. Simply put, today’s networks are far different animals than the networks of a few years ago. They are home to different types of applications, each demanding its own performance levels and different cost structures; each requiring different service level guarantees. Users in China, Japan, India, South Korea and the Southeast Asian region, for example, already plug into sophisticated applications such as online gaming. A DFC Intelligence report (Sept 2005) estimates that the global online gaming market will be worth US$5.7 billion in 2007, up from US$1.6 billion in 2003. Gamers in Korea, China, Japan and Taiwan make up the bulk of these revenue projections. These networks must support latency-sensitive voice traffic; real-time, interactive online games; high-bandwidth video downloads; and, most recently, live television broadcasts. Take high-definition television, HDTV. HDTV is essentially a digital broadcasting system that delivers high-resolution, wide-screen video with multiple channels of digital sounds. It is sometimes referred to as DVD-quality television because it uses the MPEG-2 codec (compressor/decompressor) and offers the same resolution as most DVDs. With systems now readily available to convert HDTV signals to IP packets, broadcasters can now transmit their programmes over the telecommunications grid. The catch is HDTV soaks up as much as five times the bandwidth capacity required for conventional analogue TV broadcasts over satellite. The cost benefit analysis in sending packets to TV sets on an IP network versus beaming signals off satellites to viewers would swing broadcasters towards HDTV. One can, cost-effectively, introduce just so many new services over an IP network. Likewise, in the corporate space, networks are no longer just for file transfers; they now act as conduits for mission-critical applications and such productivity enhancers as conferencing and online collaboration suites. In this way, corporate network solutions must also support flexible service level options, together with matching pricing structures to optimise network investment and cost efficiency. Multi-protocol label switching, MPLS is having a significant impact on business, as demand grows for flexible any-to-any connectivity and the efficiency of handling converged data, voice and video services using a single corporate network. Voice calling, which can now be sent as packets over the Internet, is just one brilliant example of the services now handled by converged digital networks. VoIP sharply reduces the cost of international calls. With the appropriate quality of service controls in place, users of VoIP networks can hardly detect the difference between traditional analogue calls and IP calls. This provides an opportunity to integrate one more essential service into a unified corporate network. Even if businesses do not immediately run VoIP, MPLS VPNs, Virtual Private Networks, are increasingly the foundation for future-proofed converged networks. Secure, reliable and scalable Increased demand for reliability and scalability, of course, accompany these new performance and quality-of-service requirements. As the nature of network changes, so must the supplier of those networks. One notes an increase in strategic investments by owners of cables, such as EAC, to enhance the ability of their core networks to provide next generation services. These enhancements support virtually seamless service provisioning, as well as next generation features such as meshed architecture and differentiated service levels on the optical layer. In addition, service providers who wish to partake and contribute to the future of the communications industry are adding security and business continuity planning features to their solution suites. Just as Beijing is gearing up for its global showcase at the 2008 Olympic Games with cutting-edge technologies, so must telecommunications carriers change to support, and evolve with, the new applications demanded of their networks.
