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International BW and Data Market : Compilation and Summary

Dr.Ir.Joko SuryanaLab of Radio Telecommunications and MicrowaveSchool of Electrical Engineering and Informatics INSTITUT TEKNOLOGI BANDUNG

OUTLINE

• Introduction

• Market Drivers of New Cable

• Market Opportunities

• Global IP Traffic Growth

• Regional Traffic Demand

• International Internet Bandwidth Growth, 2009–2013

• International Internet Traffic Growth by Region, 2008–2012 (CAGR & Tbps)

• Demand Traffic & Traffic Direction

• Asia Pacific

• Europe

• US & Canada

• Middle East

• Regional Inbound/Outbound Traffic Forecast 2014 – 2023

• Asia

• US

• Europe

• Traffic of Fixed, Mobile & Managed IP

• Regional Submarine Infrastructure

• Total Activated Capacity 2007-2012

• Capacity (Time MY)

• Proposed Routes

• Transpacific Cables

• South Asia & Middle East/Europe-Asia

• Intra Asia

• China

• Australia, NZ, Hawaii & Guam

OUTLINE

• South East Asian Countries ICT Profiles

• International BW Demand

• Asia BW Usage

• ICT Profiles

• Cambodia

• Indonesia

• Laos

• Malaysia

• Myanmar

• Philippines

• Singapore

• Thailand

• Vietnam

• Summary

• International BW

• Bandwidth Pricing

• Fixed and Mobile Broadband

• Summary of Middle East Contries Profiles

• Demographical Status

• Telecom Revenues Contributions & Growth

• Telecom Penetration Rate

• International Connectivity and BW

• Traffic Growth in MENA Region

• International Voice Traffic

• Inbound – outbound

• Top International Voice Route 2012

• Current Trend

• Telecom Subscriber Profiling in Middle East

• Submarine Cables and International Bandwidth in Middle East

• ICT Maturity Level of Each Country in Middle East

OUTLINE

• Global Internet Consumption and Content, Fixed & Mobile

• Monthly Consumption

• Traffic Composition & Changes

• Asia Pacific

• Europe

• US & Canada

• Resilience and Diversity

• Hazards to Submarine Cable

• Vulnerable Choke Points

• Resilience and Diversity in Asia Pacific Countries

• Resilience and Diversity of Tata Communications, NTT Communications & Telstra

• Market Analysis

• Market Size 2011-2012

• Traffic Demand

• Trans Atlantic

• Intra Asia

• Middle East-Europe

• Middle East-Asia

• India-West

• India-East

• Asia-US & Canada

• Capacity Demand Growth vs Price Decline

• Active Submarine Cable Systems

• Differing Motivations of Key Competitors

OUTLINE

• New Route for Better New Services

• International IPX Voice Traffic by Region

• Global HSPA-LTE Growth

• Global Growth of LTE

• World IDD vs VoIP International Traffic

• CDN Revenue vs Traffic in Asia Pacific

IntroductionInternational BW and Data Market

IntroductionMarket Drivers of New Cable

• Usage growth : fixed, mobile and broadband users growth

• New applications : more valuable content

• Demand vs. Supply : there is a capacity gap between submarine cable providers and traffic demand

• Emerging markets : developing countries di Asia and Africa

• Route diversity : latency, resilence and disaster recovery plan

• Cost-effectiveness : USD/Mbps

• Technology : more reliable and more speed

IntroductionMarket Opportunities

• Asia Pacific - strong demand, low penetration

• Australasia - strong demand but limited population

• Caribbean - regional in-fill

• Indian Ocean - intra-regional connectivity

• Latin America - bubbling up

• Mediterranean Africa - connectivity to Europe

• Oceania - development funds available

• Persian Gulf - oil-rich, underserved especially Iraq

• Sub-Saharan Africa - lots of talk, few results

• Transatlantic - supply tightening

IntroductionGlobal IP Traffic Growth

Source : CISCO, VNI

Regional Traffic Demand

International Internet Bandwidth Growth, 2009–2013

Demand TrafficAsia Pacific

YearTraffic (Gbps)

2008 2.248

2009 3.737

2010 6.138

2011 9.571

2012 14.348

Source : Telegeography

Traffic DirectionAsia Pacific


RegionTraffic

Proportion

US & Canada 42 %

Europe 30 %

Africa 1 %

Intra Asia 27 %

Traffic DirectionAsia Pacific

Demand TrafficEurope

YearTraffic(Gbps)

2008 10.857

2009 18.021

2010 27.526

2011 40.648

2012 78.357


Traffic DirectionEurope


RegionTraffic

Proportion

US & Canada 15 %

Asia 7 %

Africa 1 %

Intra Europe 77 %

Traffic DirectionEurope


Demand TrafficUS & Canada

YearTraffic (Gbps)

2008 5.071

2009 7.851

2010 11.882

2011 16.646

2012 25.171


Traffic DirectionUS & Canada

RegionTraffic

Proportion

Europe 35 %

LATA 25 %

Asia 25 %

Intra USC 15 %


Traffic DirectionUS & Canada


Demand TrafficMiddle East

YearTraffic (Gbps)

2008 348

2009 729

2010 1.303

2011 2.294

2012 3.448


Traffic DirectionMiddle East

RegionTraffic

Proportion

Europe 20 %

US 35 %

Asia 25 %

Intra ME 20 %


RegionalInbound/Outbound Traffic

Forecast 2014 – 2023

Inbound –Outbound Asia

• New data from TeleGeography’s Global Internet Geography research reveal that international Internet capacity growth fell to the lowest pace in five years, decreasing from 68% in 2008 to 40% in 2012.

• 2012 to 2017: as per VNI (Transpacific and Asia-Europe bandwidth growth at a compound annual growth rate (CAGR) of 23 percent)

• Slowing growth after 2017, assuming 2018-2022: CAGR 20%, 2023-2027: CAGR 15%, and 2028-2031: CAGR 5%

• Source: 2007 - 2011, Telegeography Global Internet Map

Inbound –Outbound US





Inbound –Outbound Europe





Traffic of Fixed, Mobile & Managed IP• In Asia Pacific, mobile data traffic will grow 9-fold from 2012 to 2017, a compound annual growth

rate of 56%.

• In North America, mobile data traffic will grow 17-fold from 2012 to 2017, a compound annual growth rate of 76%.

• In Western Europe, mobile data traffic will grow 13-fold from 2012 to 2017, a compound annual growth rate of 67%

• In Central and Eastern Europe, mobile data traffic will grow 13-fold from 2012 to 2017, a compound annual growth rate of 66%.

Regional Submarine Infrastructure

Transpacific Cables

Total Activated Transpacific Capacity 2007-2012

Source : Terabit Consulting 2013

Time MYTrans Pacific Cable Capacity

Proposed Transpacific

South Asia & Middle East /Europe-Asia

Time MYSouth Asia & Middle East/Europe-Asia Cable Capacity

Proposed South Asia & Middle East/Europe-Asia

Intra Asia

Intra Asia, 2007-2012


Time MYIntra Asia Cable Capacity

Proposed Intra Asia

China


Australia, NZ, Hawaii & Guam


South East Asian CountriesICT Profiles

International BW Demand

Asia BW Usage

Growing Demand in South East Asia

Cam

bo

dia

n

Source : Terabit Consulting 2013Source : Telegeography

Cambodia1. Delayed development of international connectivity due to historical dependence on satellite.

2. Cambodia is one of the few coastal countries in the world without direct access to a submarine fibre optic cable; construction and maintenance agreement for Asia‐America Gateway trans‐Pacific cable (2010) did not provide for a Cambodian landing point, but a new Malaysia‐Cambodia‐Thailand cable is under consideration.

3. Telcotech joined AAG consortium in 2007 but was left to negotiate for bandwidth on the cable through “reasonably‐priced backhaul agreements” with the cable’s landing parties in Thailand and Viet Nam; Telcotechwas purchased by Ezecom in 2011 and its terrestrial connectivity to AAG through Thailand and Viet Nam was expected to be increased from 10 Gbps to 100 Gbps.

4. The Greater Mekong Subregion (GMS) Information Highway Project provides terrestrial connectivity to Lao PDR, Thailand, and Viet Nam, operated by Telecom Cambodia.

5. Viettel Cambodia (Military Telecommunications Company) operates dual terrestrial fibre optic paths from Cambodia to Viet Nam.

6. The Cambodia‐Viet Nam High‐Speed Transmission Line was launched by Telecom Cambodia and VNPT group in April 2012.

7. The Thailand‐Cambodia‐Viet Nam‐Hong Kong Fibre Highway initiative was announced in March 2012, with NeocomISP as the Cambodian partner, allowing access to international submarine cables in Hong Kong.

8. As of 2012, Thai operator TOT and China Telecom were reportedly exploring a partnership to build terrestrial fibre links between Cambodia, China, Lao PDR, Russia, Thailand, and Viet Nam.

9. The governments of Cambodia and Lao PDR signed a memorandum of understanding in 2013 to improve fibreoptic connectivity between the two countries.

10. The proposed Cambodian submarine cable project (2008) did not move forward.

Ind

on

esia


Indonesia

1. Not well‐served by interregional submarine cable systems: Indonesia’s only intercontinental/interregional link is SEA‐ME‐WE‐3, which is 14 years old and connects 33 countries in Europe, Africa, Asia, and Australia.

2. Between 2003 and 2010, six submarine cable systems were constructed between Indonesia and Singapore, and further submarine connectivity was constructed to Malaysia and Thailand.

3. As a result of the half‐dozen Indonesia‐Singapore links constructed within the last decade, the majority of Indonesia’s international Internet bandwidth now transits through Singapore.

4. Industry observers in Indonesia have pointed to its comparative shortage of direct interregional bandwidth as potentially placing the country at a competitive disadvantage versus Malaysia and Singapore in capturing foreign IT investment.

5. The Asia‐America Gateway (AAG) submarine cable entered service in January of 2010, and although it does not land in Indonesia, PT Telekomunikasi Indonesia is a member of the consortium and accesses the cable via the 55‐kilometre Batam‐Singapore Cable System (BSCS), constructed in 2009.

6. Limited Interregional connectivity and strong dependence on Singapore for transit capacity

Lao

PD

R


Lao PDR

1. Lao PDR‐China terrestrial cable crosses the border at Boten (linking to China Telecom at 2 Gbps)

2. Lao PDR‐Thailand terrestrial cable via Friendship Bridge I (linking to CAT Telecom at 5 Gbps)

3. Lao PDR‐Thailand terrestrial cable via Friendship Bridge II (linking to CAT Telecom at 2 Gbps)

4. Lao PDR‐Viet Nam terrestrial cable (Dansavanh‐Lao Bao) (linking to VNPT subsidiary Viet Nam Data Communication (VDC) at 5 Gbps)

5. Lao PDR‐Viet Nam terrestrial cable (Namphao‐Cau Treo) (linking to VDC at 5 Gbps)

6. Lao PDR‐Cambodia terrestrial cable at Veun Kham (linking to Cambodia Telecom at 2.5 Gbps)

7. Trans‐border links form part of China‐Southeast Asia Cable and Greater Mekong Subregion Information Highway Project, thereby providing onward connectivity to Malaysia and Singapore.

8. No direct Interregional connectivity; terrestrial trans‐border links operate at low capacity

Mal

aysi

a


Malaysia

1. Benefited from Europe‐Asia submarine cables (FLAG Europe‐Asia and SEA‐ME‐WE‐3) in late 1990s, SAFE cable to South Africa in 2002, and SEA‐ME‐WE‐4 in 2005.

2. Pan‐East Asian regional connectivity provided by APCN‐2 (2002) and Asia Submarine‐cable Express (2012); Telekom Malaysia retained two fibre pairs in the latter, which comprise “Cahaya Malaysia”.

3. The Asia‐America Gateway (AAG) entered service in 2010 and provides direct connectivity from Malaysia and Southeast Asia to the United States.

4. Malaysian operator Time dotCom is a 10% shareholder in the trans‐Pacific Unity system between Japan and the United States.

5. Konsortium Renkaian Serantau (KRS) (Regional Network Consortium) was formed by 24 Malaysian operators in 2011 with the goal of driving down the price of international bandwidth; KRS also considered the construction of a trans‐Pacific submarine cable to the United States.

6. Regional submarine cables serving Malaysia include Malaysia‐Thailand, Malaysia‐Thailand East and West, the East‐West Submarine Cable System, the Dumai‐Melaka Cable System (DMCS), the Batam‐Rengit Cable System (BRCS), and the Batam‐Duamai‐Malacca Cable System (BDM).

7. Terrestrial links to both Thailand and Singapore are operated by Telekom Malaysia, and the Time dotCom Cross‐Peninsular Cable System (CPCS) also links to those two countries.

8. Malaysia benefits from strong links to its regional neighbours, as well as good connectivity to Europe, Africa, and North America.

Mya

nm

ar


Myanmar

1. Myanmar’s primary international link is the SEA‐ME‐WE‐3 submarine cable, on which two 10‐Gbps wavelengths are reportedly lit.

2. Terrestrial links provide trans‐border connectivity to China, Thailand, and India.

3. Myanmar Posts and Telecommunications (MPT) and Bangladesh Submarine Cable Company Limited (BSCCL) are implementing a terrestrial link between Myanmar and the SEA‐ME‐WE‐4 cable station in Cox’s Bazar, Bangladesh in order for both countries to take advantage of each other’s submarine cable connections.

4. A $40 million branch to Myanmar on the proposed SEA‐ME‐WE‐5 submarine cable has reportedly been financed by China Unicom, leading to speculation that Chinese operators may use the branch as a redundant path for westbound Chinese demand, or as a platform for future Chinese investment in Myanmar’s newly liberalized telecommunications market, or will sell transit capacity to South Asian markets such as India and Bangladesh.

5. CAT Telecom of Thailand is reportedly exploring the construction of a $41‐million, 800‐kilometre link between Satun, Thailand and Dawei, Myanmar, the planned site of a deepwater port and special economic zone.

6. Current International connectivity is primarily through the SEA‐MEWE‐3 cable, which was constructed in 1999; however, a link to SEAME‐ WE‐4 via Bangladesh and the construction of a branch on the proposed SEA ME‐WE‐5 cable would improve connectivity.

Ph

illip

hin

es


Philippines

1. PLDT operates three international submarine cable landing stations: Batangas City (for the APCN‐2 and SEA‐ME‐WE‐3 cables); Buang, La Union (for the trans‐Pacific Asia‐America Gateway cable); and Daet, Camarines Norte (for Asia Submarine‐cable Express).

2. Globe Telecom operates two international submarine cable landing stations: Ballesteros, Cagayan (for TGN Intra‐Asia) and Nasugbu, Batangas (for the Southeast Asia‐Japan Cable).

3. Pacnet’s pan‐Asian EAC‐C2C cable network has dual landings in the Philippines, in Capepisa, Cavite and in Nasugbu, Batangas.

4. The country benefits from multiple submarine cable landing stations in different parts of the northern Philippines, offering single‐system connectivity to Asia, Europe, Australia, Africa, and North America.

Singapore


Singapore

1. Singapore is currently served by nine interregional submarine cable systems, with an additional cable under construction and scheduled for activation in 2013.

2. An additional six submarine cable systems connect Singapore to its closest neighbours: Malaysia, Indonesia, and Singapore.

3. Fibre links via Singapore’s causeway and bridge connect the country to Malaysian terrestrial networks.

4. Singapore is a regional bandwidth hub and benefits from abundant, first‐class intercontinental and regional connectivity; however, from an International perspective, its concentration of undersea cables is viewed by some as a global “choke point”.

Th

aila

nd


Thailand

1. Thailand is served by the major Europe‐Asia submarine cables (FLAG Europe‐Asia, SEA‐ME‐WE‐3, and SEAME‐ WE‐4), as well as the Asia‐America Gateway (AAG) trans‐Pacific system.

2. To date, Thailand has not participated in any of the major pan‐East Asian submarine cable projects, although CAT has invested in the proposed Asia‐Pacific Gateway project, which would enter service in 2014.

3. Trans‐border fibre optic links connect Thailand to each of its neighbours; its links to Malaysia, which provide onward connectivity to Singapore, are particularly popular among operators seeking to avoid the high IP transit costs charged by CAT for the country’s submarine cable infrastructure.

4. CAT’s reported control over the country’s somewhat limited intercontinental submarine infrastructure has led many operators to utilize terrestrial links to Singapore.

Vie

tnam


Vietnam

1. Until recently, Viet Nam’s primary international connection was the SEA‐ME‐WE‐3 cable, although the activation of the TGN Intra‐Asia submarine cable in 2009 and the trans‐Pacific Asia‐America Gateway cable the following year resulted in a dramatic increase in international capacity.

2. Viet Nam has not participated in most regional pan‐Asian systems, but a new project, the Asia‐Pacific Gateway, would feature the participation of three Vietnamese investors and enter service in 2014.

3. Viet Nam has terrestrial fibre optic links to each of its three neighbours (Cambodia, Lao PDR, and China), including connectivity via the Greater Mekong Subregion Information Highway Project and the China‐Southeast Asia Cable.

4. Viet Nam’s submarine cable connectivity is significantly less than other Asian nations.

SummaryInternational BW

Country International Bandwidth CAGR BW/capita

SummaryBandwidth Pricing

SummaryFixed and Mobile Broadband

Summary of Middle East Contries Profiles

Demographical Status of Middle East Countries

Telecom Revenue Contributions

Telecom Revenue Growth 2008-2012

Telecom Penetration Rate in MENA

International Connectivity and BW in MENA

Traffic Growth in MENA Region


International Voice TrafficInbound and Outbond


Top International Voice Route 2012


Current Trend

Middle East : telecom subscriber profiling

Internet User Penetration Rates in Middle East

Internet Users in Middle East

Mobile Phone Penetration Rates in Middle East

Mobile Subscribers in Middle East

Fixed Line Penetration Ratesin Middle East

Fixed Line Subscribers in Middle East

Fixed Broadband Penetration Rates in Middle East

Fixed Broadband Subscribers in Middle East

Wireless Broadband Penetration Rates in Middle East

Mobile Broadband Subscribers in Middle East

Middle east :submarine cable and bandwith

Submarine Cable with Landing Points in Middle East

Number of Connected Submarine Cable per Country

International Internet Bandwidth in Middle East

CAGR of International Internet BW in Middle East


Internet Exchange in Middle East Country

Internet Hosts per 10000 inhabitant di Middle East

Middle east :ict maturity level

ICT Maturity Level : #1

• Maturity level 1: Iraq, Libya, the Sudan, Syrian Arab Republic, and Yemen

• This lowest level of maturity is characterized by the following:

• (a) low ICT penetration rates and unattractive telecom market conditions that discourage personal and business usage;

• (b) scarce international connectivity to the Internet backbone;

• (c) poor Internet infrastructure and low dissemination, especially for broadband, inadequate national backbone and limited number of Internet players in the market.

• As compared to 2011, the Syrian Arab Republic was downgraded to this level due to the negative effects of the ongoing armed conflict on its infrastructure. Libya was rated in this level as well due to its damaged ICT infrastructure as a result of the 2011 revolution.


• Maturity level 2: Egypt, Morocco, Palestine, and Tunisia

• This level of maturity is characterized by the following:

• (a) average ICT penetration rates and increasingly attractive telecom market conditions for personal and business usage;

• (b) developing international connectivity to the Internet backbone;

• (c) improving Internet infrastructure and fair dissemination of broadband services, adequate national backbone and active Internet players market.

• Member countries classified in this level retained their status from 2011 while the new member countries Morocco and Tunisia attained this level in 2013.


• Maturity level 3: Jordan, Kuwait, Lebanon, and Oman


• (a) above-average ICT penetration rates and attractive telecom market conditions promoting personal and business usage;

• (b) solid international connectivity to the Internet backbone;

• (c) comparatively good Internet infrastructure and strong broadband Internet dissemination, good national backbone and active Internet players market.

• Lebanon stepped forward to this level since 2011 owing to notable growth in its mobile phone services, elevated Internet penetration growth rates, especially for fixed and mobile broadband, introduction of mobile broadband services, and massive growth in international Internet bandwidth.


• 4. Maturity level 4: Bahrain, Qatar, Saudi Arabia, and United Arab Emirates


• (a) world-class ICT penetration rates and very attractive telecom market conditions promoting personal and business usage;

• (b) highly developed international connectivity to the Internet backbone;

• (c) very strong Internet infrastructure and elevated broadband Internet dissemination, world-class national backbone and recognized Internet players.

• Saudi Arabia attained this level in 2013 owing to its elevated penetration rates and usage level, especially for broadband Internet services and a favourable and competitive telecom sector.

ICT Maturity Ranking in Middle East Country

Global Internet Consumption & Content

Global Internet Consumption and Content 2013

• Asia-Pacific mobile networks crossed a significant threshold, with average monthly mobile usage now exceeding 1 gigabyte. This consumption is driven by streaming audio and video, which accounts for 50% of peak downstream traffic.

• In US&Canada, the dominance of Real-Time Entertainment is due in large part to the continued market leadership of Netflix and YouTube, which when combined now account for over half of the downstream traffic during peak period.

• In other regions such as Europe and Asia, YouTube continues to be the largest single source of Real-Time Entertainment traffic on both fixed and mobile access networks, which makes it the leading source of Internet traffic in the entire world.

• In Europe, Netflix, less than two years since launch, now accounts for over 20% of downstream traffic on certain fixed networks in the British Isles. It took almost four years for Netflix to achieve 20% of data traffic in the United States.

Traffic Category

Internet Consumption & ContentsASIA Pacific 2013

Monthly Consumption 2013Asia Pacific, Fixed

Traffic Composition 2013Asia Pacific, Fixed

Monthly Consumption 2013Asia Pacific, Mobile

Traffic Composition 2013 Asia Pacific, Mobile

Internet Consumption & Contents

Europe 2013

Monthly Consumption 2013Europe, Fixed

Traffic Composition 2013Europe, Fixed

Monthly Consumption 2013Europe, Mobile

Traffic Composition 2013 Europe, Mobile

Internet Consumption & ContentsUS & Canada 2013

Monthly Consumption 2013US & Canada, Fixed

Traffic Composition 2013US & Canada, Fixed

Monthly Consumption 2013US & Canada, Mobile

Traffic Composition 2013US & Canada, Mobile

Resilience and Diversity

Hazards to Submarine Cable

• Submarine cables are susceptible to damage. Cable systems may be disrupted for a number of reasons, each of which has a different profile in terms of the likelihood that their occurrence could damage the overall network performance of an economy.

• The hazards to submarine cable-bound communication can be categorized into three groups:

• natural hazards to the cables themselves

• man-made hazards to the cables themselves

• hazards to the remaining infrastructure, especially landing stations and IT network management systems.

Natural Hazardsto Submarine Cables

• Natural causes for cable disruptions are quite unusual. They include current abrasions and earthquakes which cause around 12% of all faults.

• Only in water depths of more than 1000 m are they the major cause of damage to submarine cables. However, when they happen they usually cause devastating damage, often to a large number of cables.

• This makes them much more hazardous to the overall network performance than those hazards which affect only single cables.

• Typical events in this category are:

• Submarine earthquakes, fault lines and related landslides break or bury cables

• Density currents break or bury cables

• Currents and waves cause abrasion, stress and fatigue of material

• Tsunami, storm surge and sea level rise cause damage to coastal installations

• Extreme weather (e.g. hurricanes) breaks or buries cables

• Rarely icebergs or volcanic activities cause damage to cables

Man-made Hazardsto Submarine Cables

• In comparison to natural hazards, man-made causes for submarine cable disruption count for the far larger number of events and are more likely to occur.

• Around 70% of all cable faults are caused by fishing and anchoring in depths of less than 200 m.

• In water depths of less than 1000 m human activity is the main hazard to submarine cables, natural impacts cause less than 10% of cable damage in this area.

• Globally, 100-150 cables are broken per year by fishing or anchoring.

• Man-made hazards typically only affect those parts of the cables which are close to land and where they are in relatively shallow water and therefore in the range of ships’ nets and anchors.

Hazards to Landing Stations, Maintenance Ships and the IT Environment

• Interestingly, most debates and publications about dangers to submarine cable systems only focus on the cables themselves.

• However, since the cable infrastructure constitutes just one component of the overall communications system, other parts of the network have to be taken into account as well.

Vulnerable Choke Points

• Three especially vulnerable choke points that require special attention were identified:

• The Strait of Malacca between Malaysia, Singapore and Indonesia;

• The Strait of Luzon between Chinese Taipei and the Philippines

• The South China Sea.

Geographic Diversity by New Cable Routes Between Europe and Asia through the Arctic Sea

• These new cable systems in particular will considerably improve overall network stability and resilience:

• Their route through the Arctic region avoids areas which are infamous for being failure-prone "choke points" such as the Luzon Strait near Chinese Taipei, the Strait of Malacca between Indonesia and Malaysia, and the South China Sea as well as the Suez Canal.

• The cables create an entirely new redundant route as a geographic alternative to the existing cables.

• These new cables will improve the network stability by following routes that are much less likely to be struck by the most common disruptions, man-made hazards, as they are far away from traditional shipping and fishing routes.

• A second major benefit in addition to increased overall network resilience will be a reduced latency for connections between Europe and Asia.

Easing geographic congestion for Australia and New Zealand by adding new routes

• Another group of cable systems will create additional and, more importantly, geographically diverse connections for Australia and to some extent indirectly for New Zealand. As both economies are islands, they are entirely dependent on submarine cables for their participation in the global data network.

• The Australian continent is currently mainly connected at the east coast with all cables landing in one regional beacon, the area around Sydney. This includes Southern Cross, Australia-Japan Cable, Telstra Endeavour and PIPE PPC-1.

• There is just one cable on the west coast, SeaMeWe-3, landing in Perth, but this is a relatively old cable built in 1999 with only a very limited capacity of 90 Gbps.

• Only two cables have a direct connection to the main sources of internet traffic: SeaMeWe-3 directly connects Australia and Europe and Southern Cross is the only direct connection to the US mainland.

Reducing risks at the Luzon Strait for Chinese Taipei using new direct cable links to China

• The Luzon Strait between Chinese Taipei Island and Luzon Island (Philippines) is an area of high cable density but also of frequent disruptions as it is very prone to earthquakes.

• Virtually all important cables linking Chinese Taipei to the world go through this choke point.

• The high geographic concentration of cables and a lack of alternative cables and routes imply a certain risk of loss of traffic and decline in connection speed and quality, as events such as earthquakes or storms may harm several cables at once.

Resilience and DiversityASPAC Countries

• Australia will potentially have improved geographic diversity in the coming years due to a number of proposed additional submarine cables.

• This will reduce both the effects of submarine cable faults and possibly also the price level domestic users have to pay for bandwidth.

• Brunei is well connected given its size with two landing stations, three submarine cable systems and the possibility of overland connectivity to Malaysia.


• China has reduced its reliance on submarine cables by the establishment of a direct overland connection to Europe via Russia.

• Furthermore, it is linked via an overland connection to Hong Kong, China and its multitude of submarine cable systems and has its own access to seven submarine cable systems, with three further ones planned to land at ten landing stations.

• It is thus well covered even accounting for its exploding bandwidth growth.

• Hong Kong, China: As a major internet (and trade) hub, submarine cable connectivity is of special economic importance.

• However, this means traffic outages are likely to have a severe impact on other South-East Asian economies as well. Overall connectivity is thus very large and important not only to Hong Kong, China itself but also to the region in general.


• Indonesia: Due to its geographic position and the routing of international traffic and most submarine cables, Indonesia heavily relies on Singapore as a hub for international connectivity.

• Otherwise, Indonesia should build new submarine route which for providing alternate diversity and also picking up internet traffic at East Region of Indonesia

• Japan: The earthquake in March 2011 has shown that Japan’s submarine cable infrastructure is vulnerable to such events but sufficiently protected by various measures to control major effects on traffic.

• However, with Tokyo as a major international traffic hub, Japan’s international connectivity is also important to other economies in the region.


• Korea: Even though not an island, Korea’s reliance on submarine cables is island-like due to the lack of availability of an overland route through North Korea.

• It is one of the largest bandwidth users in the region but has access to a geographically diverse network.

• It has access to five submarine cables with four additional ones being planned landing at a total of three locations.

• Malaysia can easily establish overland connectivity to Singapore, one of the main internet hubs in the region.

• Malaysia has access to nine submarine cable systems with two more planned for landing at four geographically different points.

• In addition landing points in Brunei Darussalam can be utilized.


• New Zealand has only access to one submarine cable in scope today (also to a smaller one linking it to Australia), which however is built in such a way that it provides redundancy as if it were two separate cables (ring structure). In addition, two more submarine cable systems are planned. These cables land at three different landing points.

• Papua New Guinea relies on submarine cables like an island. The deployment of connectivity to Guam - where various submarine cable systems land - provides an alternative route to the one to Australia.

• With two landing stations and two submarine cable systems, connectivity is redundant especially when taking into account Papua New Guinea’s very low demand for bandwidth.


• The Philippines: Due to many submarine cables landing on the Philippines while passing by, international capacity far exceeds domestic demand.

• There are six different landing points for submarine cables, all but one on the western coast. This also prevents the Philippines from being able to offer a fully redundant overland alternative to cables passing through the Strait of Luzon, one of the bottlenecks in the region.

• Singapore, the other significant data hub in South East Asia besides Hong Kong, China is connected by a multitude of submarine cables.

• Thus, capacity is not only serving domestic needs. No threat or area needing improvement is identified by the model, although the situation in the Strait of Malacca should be closely monitored.


• Chinese Taipei is another of the few economies in scope where further submarine cables could decrease the effects of large submarine cable outages. The reliance on cables passing through the Strait of Luzon is high today but alternative cables towards China are being planned.

• However, an additional cable on this side may be helpful to establish full redundancy and to avoid loss of any traffic towards the end of the decade after outages in the Strait of Luzon.

• Thailand has access to submarine cables both on its western as well as on its eastern coast, even though some are of limited capacity. In addition, overland capacity to Singapore is an option.

• Thailand thus has sufficient redundant cables. Thailand could be able to offer an overland alternative to cables passing through the Strait of Malacca, one of the bottlenecks in the region.

Resilience and DiversityTata Communications

Resilience and DiversityNTT Communications

Resilience and DiversityTelstra

Market Analysis

Market Size 2011-2012

RouteMarket Size 2011 (Gbps)

Market Size 2012 (Gbps)

Trans Atlantic 13000 18600Intra Asia 9500 13360Middle East-West 600 880Middle East-East 220 330India-West 700 1060India-East 570 880Asia-US&Canada 8500 11760

Traffic Demand : Trans Atlantic

Europe US & Canada

Traffic Demand : Intra Asia

Asia X Asia Y

Traffic Demand :Middle East-Europe

Middle East Europe

Traffic Demand :Middle East-Asia

Middle East Asia

Traffic Demand : India-West

South Asia Europe/ME

Traffic Demand : India-East

South Asia East Asia

Traffic Demand : Asia – US & Canada

Asia –US & Canada (Tbps )

Asia US&Canada

Capacity Demand Growth vs Price Decline

Active Submarine Cable Systems

Differing Motivations of Key Competitors

Each route hasdifferent keyplayers anddifferentdemand andprice dynamics

New Route for Better New Services

International IPX Voice Traffic by Region

Source: Hot Telecoms, LAPI ITB

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Asia 44 66 91 128 172 196 233 269 302 335 371 405 439 473 508

Europe 44 66 95 119 157 180 210 239 269 296 326 355 384 413 442

North America 22 29 44 62 71 85 99 112 125 139 152 165 178 192 205

Latin America 1 4 7 11 20 22 27 33 38 42 48 53 57 62 68

MEA 1 4 7 11 22 24 30 36 42 46 53 58 64 69 75

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200

300

400

500

600

Billion Minutes

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Asia 4.990 6.710 7.622 9.065 10.496 11.787 13.044 14.472 15.782 17.093 18.441 19.791

Europe 4.645 6.108 7.003 8.183 9.325 10.483 11.542 12.721 13.839 14.961 16.085 17.228

North America 2.409 2.753 3.295 3.875 4.369 4.852 5.411 5.923 6.427 6.953 7.478 7.988

Latin America 430 774 852 1.060 1.282 1.477 1.640 1.860 2.051 2.238 2.433 2.634

MEA 430 860 920 1.158 1.412 1.635 1.810 2.064 2.278 2.488 2.707 2.935

-

5.000

10.000

15.000

20.000

25.000

Gbps

International IPX Voice Traffic by Region

Source: Hot Telecoms, LAPI ITB

Assumed:• LTE Traffic• HD and SD voice ratio = 30:70• Voice activity : 15 hours per day

Global HSPA-LTE Growth

Global Growth of LTE

World IDD vs VoIP International Traffic

Sumber: Hot Telecoms

CDN Revenue vs Traffic in Asia Pacific

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Revenue 314 417 583 806 1.08 1.36 1.60 1.77 2.00 2.22 2.45 2.67 2.89 3.12 3.34

Traffic 9 14 22 34 52 72 99 102 117 132 147 162 176 191 206

-

50

100

150

200

250

-

500

1.000

1.500

2.000

2.500

3.000

3.500

4.000

Traf

fic

(10

00

x P

B)

Rev

en

ue

( M

illio

n U

SD)

Source: Informa Telecoms & Media, LAPI ITB.

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