- A more efficient services and backhaul market is necessary if capacity wholesalers are to combat the bandwidth glut that is expected in the Asia-Pacific region with the commissioning of new submarine cable systems early next year.
Speaking at CWM2001 Asia-Pacific in Singapore recently, Margrit Sessions, managing director of consultancy and events company PBI Media, noted that 213,000 route kilometres are being planned between 2000 and 2003. At the same time, new networks such as the 17,000-kilometre C2C, which is expected to have a capacity of about 7.6Tbit/s, is expected to be ready for service by December 2001.
"There will be a lot of pan-Asian capacity available," says Owen Best, vice president, Asia-Pacific, for independent carrier Flag Telecom. "The take-up and usage will depend on how we devise services that are attractive to customers. We are talking about a services environment."
According to Best, priorities have changed for telecommunications customers. "The industry was chasing unit costs down, but as we build next-generation networks, we must take into account other features. Customers will look more closely not just at cost comparisons but also at robustness, resilience and security," he says.
Scalability and interoperability at the network and operations level, as well as flexibility in reconfiguration, have become increasingly important.
"Customers are pushing down provisioning time and exhibiting just-in-time buying behaviour. They want end-to-end quality of service assurance. People still want to see that type of telecommunications quality, but they want control at the edge of the network. They want control over facilities."
The key, says Best, is services. "Networks must deliver services to survive." Sessions of PBI Media estimated that the services market in Asia is worth US$10 billion in 2001.
Increasingly, a large amount of intra-Asian traffic is being driven by multi-language services. Asia is also becoming increasingly comfortable with IP-VPNs (Internet protocol virtual private networks), while the multi-tenant high density housing that characterizes some of the countries in the region -- such as Singapore and Hong Kong -- lends itself well to broadband distribution.
However, how quickly these applications mature and proliferate to use up the excess bandwidth inventory will depend on the efficiency of the backhaul market. Backhaul refers to network connections from key cable-landing stations to service providers' point of presence.
Describing backhaul inefficiencies as one of the key constraints in rolling out new networks in Asia, Best says: "If we cannot present to the market a cost effective solution, we cannot expect IT and application providers to produce bandwidth hungry applications."
He cites comparisons with Europe and the United States, where backhaul costs about $US2-3 per metre fibre pair, while prices in Asia could be 10 to 30 times that.
"We have a situation where even though economies exist in the backhaul, the market cannot get access to fibre pairs. And the market should not be constrained by the technology that is pre-chosen by the supplier," says Best.
To bypass this problem, carriers will have to tackle regulatory issues to provide their own cables and conduits.
"What we will see is accelerated deregulation and the unbundling of the backhaul. This does not imply anyone can go into the domestic market, but 'corridors' will be created to allow international players to create bandwidth."
William Barney of Asian Global Crossing (AGC) says end-to-end cable ownership could result in cost reductions of up to 90 percent compared with leasing capacity on club cables.
It will lead to what Best described as a "virtuous cycle". "Bandwidth available at the right price and technology will spawn a cycle of new applications," Barney says.