Factors Boosting Bandwidth Demand Growth

Still citing Telegeography, the following are factors accelerating bandwidth demand growth:

• Increased adoption of high-speed broadband access (more than 400 mn broadband subscribers worldwide at 2008E)
• (Illicit) P2P usage --> case TPB
• Legal video content --> skyrocketing!!

Hulu had 9 million unique viewers in October 2008, rumored to be going international soon
Most sporting events are broadcast online to a global audience in increasingly high quality
Beijing Olympics:100 million online viewers in China according to CCTV; The BBC served 40 million streams

And sure : "Content Providers and Content Delivery Networks Increasingly Large Capacity Buyers!!":

• Content providers and CDNs push content nearer to end-users to optimize quality
• Google is investing in the Unity cable project and building data centers around the world
• Microsoft is building a global CDN with 99 nodes and adding 10,000 servers a month
• Limelight Networks continuing to add servers and PoPs

Source Telegeography / Alan Mauldin

Traffic Trends

Comparing the latest Ipoque's Internet-Study to previous traffic composition published e.g. by Telegeography; I see only a minor difference: P2P is still the king but video traffic has an increasingly dominant portion.

Traffic trends according to A. Oon (Equinix) at Menog :

• Accelerated growth in broadband services in Asia
• Major content providers & CDN deployment in Asia: Yahoo, Google, Akamai, Limelight
• Localized content growth
• 10G exchange deployments
• Continued exponential growth in P2P Traffic
• HD streaming video and VoIP
• Mass market gaming

Source Oon/Eqx

Source/Courtesy ipoque

Ipoque's Internet Study (2008):

• P2P generates most traffic in all regions
• The proportion of P2P traffic has decreased BitTorrent is still number one of all protocols, HTTP second
• The proportion of eDonkey is much lower than last year
• File hosting has considerably grown in popularity
• Streaming is taking over P2P users for video content
• Usenet, a file sharing alternative for P2P, appears in the statistics for the first time

Global Internet Usage - 2008

Some notes from TM's perspective with regard to the Internet usage:

• Capacity demand is fueled by demand for IP-based services and bandwidth hungry applications – more “FAT” pipes
• Consumer Internet usage is shaped by the ever increasing use of video streaming and peer-to-peer applications. The lack of domestic content in most countries will further accentuate this behavior

• P2P singularly contributes to 45% of internet usage
• Peer to peer overtook web in 2000
• Video contents is to overtake Peer to Peer application in 2010

• This global trend is also seen in the Malaysian market specifically for the TM users of broadband

Source/Courtesy: TM/Cisco VNI

Asian Bandwidth Growth : Demands, Supplies & Facts

This will highlight and shall actually be a summary of the talk given by Bill Barney / Pacnet several times ago.

Several facts happened in Asia:

• 41% of the world’s fixed line users
• More than 40% of the world’s mobile users : Number of subscribers in Asia has grown from 280m to more than 950m between 2003-2007 (GSMA, ITU, Frost & Sullivan); More than 210 million users have signed up for 3G services in Asia since the launch of the first high-speed mobile network data network in Korea in 2000 (CDMA Development Group)
• 38.7% of the world’s Internet subscribers: Growth (2000-2007) at 346.6%, compared to the rest of the world at 228.1%
• Over 42% of the world’s broadband Internet users: The number of broadband connections in Asia nearly quadrupled between 2003-2007 (27.3m to 100.5m); 128m out of world’s 350m broadband subscribers are in Asia. (Buddecom)
  

Those things are enforced among other by the following key drivers:

Driver#1: Asian traffic becoming more intra-asia as countries become a tighter market and content moves from the US to Asia; Data Traffic Pattern in the Region Becoming More Intra-Asia Oriented (Source: Gartner & Pacnet Estimates):

• Over 60% of traffic from Asia is intra-Asia
• The percentage of total traffic from many Asian countries to the U.S. is declining
• Local network capacity in Asia has become more pervasive and cost-competitive
• Regulatory changes have improved local termination costs
• Asian content creation and storage was rapidly migrating to Asia
  

Driver#2: supply and demand have started to become aligned; the matching of supply & demand has created a leveling of bandwidth pricing

Driver#3: Glass and content owners have an advantage over renters; traditional carriers in the services market who are wedded to leased capacity, rented last miles and paid IP transit are at a huge cost disadvantage

Driver#4: Asia has Fortune 500 companies driving 20%-30% of business, THE REST is through smaller corporate customers…

Driver#5: Customers are requiring more complex services and higher levels of management/support

Remarks

• The market is too broad and growing too fast for anyone to dominate;
• Different cost advantages at the local, international and content delivery level will create competition across assets classes;
• Collaboration is and will be inevitable alongside competition
• 14 new cables and extensions underway (USD 7.1 bn, see below): One built by sole owner (TGN Pacific??), Nine have at least three partners, Four have more than 10;
• Nobody has invested more than $180M of their own capital on a project; From 1998 to 2001, 14 cable investments of over $1b were made by standalone companies
• Diversification of investment is the theme
  

• 180 Fortune 500 Customers on Pacnet: 80% of the revenue delivered is on the network, 20% of the revenue is delivered on partners; Average deal requires six to 12 partners!
• One Customer: Austrade and DFAT --> 94 network providers collaborating, 31 countries touched, 22 major partners
  

• The Age of the “Global Carrier” is Over; The Age of the Standalone cable company is Over
• Collaboration and Cooperation are here for the years to come… your competitor today will be your partner or co-investor tomorrow
• Be friends ! :-D

Some Statistics Taken from Pacnet/Bill Barney (Courtesy of Each Marked Company)

Can Broadband Spread to the Masses?

In this post, I just want to archieve some facts and opinions given by Arjun Trivedi (NSN-Nokia Siemens Networks) in the first Indonesian Broadband Summit held last April in Jakarta. The title above is taken from Arjun Trivedi's slides, since to my opinion, that title describes the most important message from his presentation. (I was not attending this event and just found his presentation material through a link referred from Mastel website). But don't forget to balance the question with "Where are the Masses?" :-)

Some facts/statistics as of end 2007 (source UN, Ovum, ITU, BIS Sharapnel, Operators, NSN Market Intelligence):

• Population 233 mio.
• Households 59 mio.
• Internet users 31 mio.
• Dial-up access 0.7 mio. subs/month
• Broadband subscription 0.3 mio.
• HSDPA users 0.1 mio.
• PC/laptop households 7mio.
• DSL subscribers 72%, Cable subscriber 25%, other 3%
• Broadband CAGR Indonesia 115% in last 3 years (2005-2007)
  
  

Regions served by broadband according to NSN

Opinions:

• Broadband is still in early stage of development with sporadic coverage (see above)
  
• Broaband access can open up a nation's economy once we overcome challenges in affordability and connectivity: increased competitiveness, better education systems & working environment, savings of operational costs
• Key drivers for broadband penetration : acceptance of Internet, affordable packages, variety of technology choices & availability, government support for ict development
• DSL is still preferred form of broadband access globally; cable modem sparks demand with TV offerings; other technologies such as FTTx, WiMAX are in the pipeline for introduction
  

Profile of indonesian broadband subscribers (NSN surveys 12/2007-2/2008; Jakarta, Bandung, Surabaya, Medan)

• Typical user profile: highly educated people in their early 20's
• Common user habbit: daily home-working, email, browsing & chatting (PC/laptop)
• Perception of broadband: faster internet access, simultaneous use of telephone and internet
• Most familiar broadband service technology: DSL, Cable
• Preferred billing system: post-paid (more specific ? - may be "flat" but "cheap" :-))
  
• Preferred method of payments: ATM, authorized dealers
• Main influence in selecting broadband access: recommendation from friends
• Barriers to have broadband access: price and service availability

Some other important issues for broadband acceptance:

• Good reputation
• Extensive network coverage; connection quality; stable speed
  
• Ease of payment, accurate billing, easy understanding of bill statement
• Price affordability, fast installation, good value for money
  

Case "Broadband in South Korea" :

• Over the past two decades the SK government and its privatesector have built one of the world most advance IT infrastructures
• 76% of Koreans over age of 6 use Internet with e-government, e-commerce and e-education being popular applications
• In 2006, korean IT industry grew approx. 4x more than the non IT industry, and its portion of total GDP is over 16% while telecoms services account for over 5%
• Government established "u-KOREA Master Plan" and part of this is the establishment of "u-Infrastructure" or a 'Broadband convergence Network' (BcN)
• BcN aims to provide broadband multimedia services to 10 mio. households (approx. 55% households) with wired services and 10 mio. subs (approx. 20% of the population) with wireless services by the year 2010 and to achieve telecom/broadcasting equipment production volume of about USD 73 bill. as well as export volume of USD 20.1 bill
  

Broadband : Penetration & Pricing

There might be several definitions for the term "broadband". Here I use this term to refer to services which run on channels / infrastructures other than those utilized by traditional voice services. Usually it should be faster than 64 kbps. Practically it denotes services using xDSL, FTTx, Cable/HFC or novel state-of-the-art wireless technologies. Some numerical data presented in this post are taken from Point Topic and REACH. Those are actually rather outdated (2004). But some characteristics concluded from those might remain similar and could be used as an approximation for our current situation.

As of 2004, the market share of installed broadband lines in APAC region is larger compared to that of the EMEA region or the American continent (see the picture). At that time, there are around 45 mn broadband lines / subscribers in the whole APAC region. This is about twice of the number of broadband lines in the whole America. This fact might have a direct or indirect impact on the pricing scheme. As you can see in the picture, bandwidth in countries like South Korea, Japan, China, Taiwan and Hong Kong is (much) cheaper than that in other countries. In Japan, the "champion" country in this case, one can have a 45 Mbps connection for USD 36 a month. Yes, okay, if we look at India, Malaysia, Singapore etc. the statement above is not (yet) applicable. But the global trend "faster but cheaper" has propagated and now reached those states. Hopefully soon, I could update this post with more actual data. Whether some of you have those already ?!