Asian bandwidth still way more expensive

17 Nov 2010

Working my way through some the industry research issued in the last 24 hours, the first thing that stands out is some trends don’t change.

As ever, Asian bandwidth prices are plummeting but remain much higher than in the US or Europe.

TeleGeography’s latest data shows IP transit prices worldwide are sliding despite growth of more than 60% in international traffic.

But Pacific and Atlantic prices are still far apart. In Hong Kong, the median price for a 1Tbps GigE port has fallen at CAGR of 15% over the past five years to $28 per Mbps.

That’s still three and a half times the more than the median port price in New York, which is now below $8. New York prices have fallen at CAGR of 22% since 2005.

[see graphic below]

Less predictably, another study finds that while the US economy may be bumping on the bottom, it is powering along when it comes to network investment.

North American spending is “helping lead the telecom world out of the economic doldrums,” says Infonetics in a research note on the carrier router and switch market.

It says spending is up 21% year-on-year and 5% sequentially, but the star performer is North America, where edge and core router investment 41% over last year.

“Cisco accounted for the largest part of the third quarter revenue upswing, and Alcatel-Lucent added solid quarterly gains, both driven by IP edge router sales,” said Michael Howard, principal analyst for carrier and data center networks.

Meanwhile, with the GSMA conference underway in Hong Kong, the usual blizzard of mobile broadband propaganda is blowing into our inboxes.

The association has released research from Wireless Intelligence predicting that China will account for almost half of LTE connections in Asia Pacific by 2015.

Presumably, that’s a bet that China’s poor take-up of 3G, and in particular the home-grown version, will actually stimulate 4G adoption. Right now 3G accounts for just 26 million of the 733 million customers on the China Mobile and Unicom networks.

Wireless Intelligence is predicting in five years 58 million Chinese will be using 4G. Japanese cellcos, who will start commercial LTE next year, will clock up just 27 million users.

Average GigE IP Transit Prices, 2005-2010

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