Mumbai:
The Asia-Pacific leased line market is expected to
grow from $12.9 billion in 2002 to $13.3 billion in 2003,
according to Dataquest Inc, a unit of Gartner, Inc. A
Gartner press release says the market would return to
positive growth in 2003, despite the rapid price erosion
from the flood of new bandwidth.
The
sector that comes under the most severe pricing pressure
is international leased lines, but Internet growth has
resulted in a soaring bandwidth demand, offsetting the
decline and increasing revenue. The leased line market
comprises international, domestic long-distance and local
leased lines.
International
leased line revenue in Asia-Pacific is forecast to grow
from $1.8 billion in 2002 to $1.9 billion in 2003. Despite
severe pricing pressure from the launch of new high-capacity
regional cables, increasing deregulation and competition
have unleashed pent-up demand from large emerging markets
such as China and India, supporting regional growth,
says Gartner.
Steady
growth from the local leased line sector, currently the
biggest segment in many countries, will also bolster revenue.
This sub-sector accounts for up to half of total leased
line markets in some places. Bandwidth demand is rising,
and incumbent carriers face little competition and are
thus under little pressure to cut prices.
The
biggest users of leased lines are corporations, followed
by cellular operators, Internet service providers and
alternative carriers, says Alayne Wong, industry
analyst for Gartner Dataquests worldwide telecommunications
group. Bandwidth demand is actually very strong
as many Asian markets are still expanding and higher-speed
applications are emerging. However, revenues are muted
by falling prices.
Domestic
long-distance leased line revenue is projected to reach
$5.4 billion in 2003, a slight increase from 2002 revenue
of $5.3 billion, but Gartner Dataquest analysts say the
segment will experience revenue declines a few years later,
but this will be marginal.
As
competition has already set in liberalised markets like
Japan, South Korea and Australia, there is little room
to cut prices further. This sector has been buoyed by
demands from new alternative carriers, cellular operators,
and ISPs without their own network infrastructure. However,
going forward, the bigger players will start building
their own networks, says Wong.
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