The Trans-Asian Terrestrial Broadband Link

Abu Saeed KhanSenior Policy Fellow

LIRNEasia

@ Workshop on Broadband Policy and implementation in South AfricaPretoria – November 12, 2013

Great shift has happenedGreater shift is happening

• PSTN took 125 years to get 1 billion users • It took mobile 10 years to get 1st billion

• More than 5 billion mobile users

•Redefining digital divide:Mobility and ubiquity of voice and textUbiquity of broadband is yet to happen

Asia and Pacific lags behind (Graphs: ITU World Telecommunication /ICT Indicators database)

• APAC is economic growth engine of the world.

• Altogether more than $16 trillion economies.

• Home of more than 60% global population.

The Cloud Readiness Index 2012

Source: Asia Cloud Computing Association

Cushman & Wakefield

Cushman & Wakefield Data Center Risk Index - 201360% 35% 5%

Cushman & Wakefield Data Center Risk Index - 201360% 35% 5%

“While prices have declined globally, significant geographic differences persist. For example, the median Hong Kong 10 GigE price has remained 3 to 5 times the price of a GigE port in London over the past 3 years. Developing Asian nations procure wholesale Internet bandwidth mostly from Singapore and Hong Kong at price 11-times that of Europe.” - TeleGeography.

Median 10 GigE IP Transit Prices in Major Global Cities, Q2 2010-Q2 2013

The Great Asian Divide (Source: TeleGeography)

Median IP transit prices/Mbps, Gigabit Ethernet, Q2 2010-Q2 2013

  2010 2011 2012 2013 2012-13 CAGR 10-13

East Asia and China    

Hong Kong $28.00 $22.00 $16.00 $16.49 3% -16%

Seoul $49.16 $37.00 $25.00 $20.00 -20% -26%

Singapore $39.00 $31.00 $14.40 $13.51 -6% -30%

Taipei $43.50 $39.33 $25.00 $21.34 -15% -21%

Tokyo $31.76 $30.01 $20.00 $18.00 -10% -17%

SE Asia and India    

Jakarta $50.00 $26.00 $25.50 $20.00 -22% -26%

Kuala Lumpur $57.00 $45.03 $31.08 $26.85 -14% -22%

Manila $156.23 $132.97 $60.00 $49.98 -17% -32%

Mumbai $38.09 $40.00 $38.00 $38.00 0% 0%

Bandwidth and affordability divide in ASEAN-9

Country

Activated Int'l

wholesale bandwidth capacity in

2012

Int'l wholesale bandwidth price/Mbps

Int'l bandwidth per capita

(Kbps)

Retail price per

Mbps

Annual retail bandwidth price as a % of per capita

GDP

Fixed broadband penetration

Mobile penetration

Cambodia 11 Gbps $80 0.764 $35 48.70% 0.45% 152.78%

Indonesia 250 Gbps $70 1.030 $20 5.50% 1.24% 119.44%

Lao PDR 2.5 Gbps $100 0.383 $33 27.40% 0.61% 88.92%

Malaysia 400 Gbps $25 15.60 $33 4.40% 7.79% 137.49%

Myanmar 14 Gbps $100 0.286 $55 132.80% 0.10% 11.12%

Philippines 530 Gbps $80 5.450 $24 11.20% 1.51% 104.87%

Singapore 1,389 Gbps $10 258.30 $4 0.10% 25.49% 149.90%

Thailand 463 Gbps $80 6.622 $2 0.50% 6.16% 114.42%

Vietnam 360 Gbps $70 5.150 $10 7.90% 4.88% 152.06%

Source: Michael Ruddy, Terabit Consulting, September, 2013.

Good competition•Terrestrial & submarine

Poor competition All submarine

Why bandwidth is expensive in Asia?

Fierce competition•Coast-coast terrestrial

Broadband’sbiggest barrier

Trans-Pacific (Asia-USA) cables are under fire

Pirates rule Europe-Asia route

“In 2011 Somali piracy cost the world economy $7 billion and earned the pirates some $160 million in ransoms, according to a recent report by the International Maritime Bureau. Piracy is receding of late, but it is still a threat.” Reuters: August 13, 2012.

Business (not) as usualNAIROBI, April 16, 2009 (Reuters)- Foreign navies have agreed to protect a vessel installing an undersea high-speed Internet cable from pirates off the coast of Somalia.

ME-Europe gets terrestrialJeddah-Amman-Damascus-Istanbul

(JADI) Regional Cable Network (RCN)

Bypass EgyptDodge the pirates

Iran and Oman also detour

APAC to Europe via Middle East?

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“EPEG is now the Internet’s fastest path between the Gulf and Europe, shaving at least ten percent off the best submarine cable round trip time from Dubai to Frankfurt.” Jim Cowie, Renesys. 26 Sep, 2013.

1) 2008: Reliance and China Mobile terrestrial link.2) 2009: Tata and China Mobile terrestrial link.3) 2010: Bharti and China Mobile terrestrial link.

China goes to Europe via Russia

Why rush to Europe?

• Middle East’s internet connectivity with Europe has sharply grown from 51% to 85% during 2003~2013.

• Less than 6% of South Asian capacity was connected to Europe in 2003 while it is over 46% today.

• Europe now accounts for 94% of international Internet bandwidth connected to North Africa, up from 61% ten years ago

• 72% of bandwidth connected to Sub-Saharan Africa, up from 39% a decade ago.

State-owned PTTClosed access

Asian Highway has connected:Russia, India, China, Turkey, Central Asia, SAARC, ASEAN+2

A network of 141,000 km of standardized roadways crisscrossing 32 Asian countries connecting EU.

Asian Highway has already linked the borders. A fully meshed terrestrial LION is waiting.

Longest International Open-access Network (LION) to link Asia and Europe

Each country’s share in Asian Highway

Targets of LION: Open-access

1) Diversity and Redundancy to all submarine cables linking Asia with Europe and the USA via Japan through a Terrestrial Consortium.

2) Migrate SEA-ME-WE (3 & 4) from offshore to on-shore. Also let all private carriers to migrate.

3) No regulatory disruption. Only the licensed carriers will access LION.

Advantages of LION• Presumed ‘unfriendly’ countries are already interlinked.

– Submarine : SEA-ME-WE 3 and SEA-ME-WE 4.– Terrestrial: Sino-Russian link (TEA) and Sino-Indian link (Reliance/Tata/Bharti

+ China Mobile).

• Highly resilient due to being meshed.– Rerouting the traffic means ‘zero’ downtime.– Installation and maintenance crew/materials available everywhere.

• Creates more opportunities for submarine cables. – Investments in transpacific rather than intra-Asia.– Lower latency and higher SLA at lesser cost for intl’ bandwidth.

Open access guaranteed

• Internet in Asia will be similar to or cheaper than the EU.– Mobile broadband (HSPA/LTE) will grow like 2G voice.

• Smart devices and Wi-Fi offload will accelerate the data growth.

– Investments in broadband will increase.– There will be higher ROI in FTTx.

• More international and domestic PoPs/access nodes will emerge. Landlocked countries will have bandwidth at equal cost.

Sub-regional telecoms initiatives have not delivered that. Pacific islands will enjoy reduced bandwidth cost in the mainland.

• International Gateway (IGW) reforms will be accelerated.– Usage of submarine cables’ purchased capacity will be maximized.– Carriers will commit longer contracts.

Impacts of LION

National broadband backboneswill require lesser subsidies.

Submarine networks = Terrestrial networks

Courtesy: Ciena

Courtesy: Ciena

So called alternate networks

• Regional Expert Consultation on Connecting Asia-Pacific’s Digital Society for Building Resilience.

• 5-6 September 2012, Colombo, Sri Lanka

• Building E-Resilience through ICTs and Space Technology.

• 20-21 November 2012, Bangkok, Thailand

• Expert Consultation on the Asian Information Superhighway and Regional Connectivity.

• 24-25 September 2013, Manila, Philippines

Next: Expert Consultation on the Asian information superhighway and regional connectivity, 3-4 December 2013, Baku, Azerbaijan.