Booming Asian demand for broadband connections
Updated
Booming Asian demand for broadband connections is helping to keep prices down in Australia. The popularity of video downloads along with expanding mobile phone and internet traffic readily fills up any new roll out by service providers. The latest under sea broadband cable connecting the region to the United States was finished last month.
Presenter: Karon Snowdon
Speaker: David Kennedy, the Research Director with Ovum consultants
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SNOWDON: It's a submarine cable stretching 20,000 kilometres and linking about ten Southeast Asian nations and Australia with a single direct line to each other and the US for the first time. It was opened last month and can carry phone, data and video traffic at high speed to meet the surging demand. The Asia-America cable forms part of a spaghetti network of cables and pipes spanning the oceans between Asia and the rest of the world. At one time some analysts thought the rush to invest could lead to an over-supply tangle of massive proportions, but David Kennedy, the Research Director with Ovum, predicted two years ago that demand would be enough to prevent such unprofitable over-capacity.
KENNEDY: There was a threat of that I think a couple of years ago and at the time we thought that it was possible for the industry to manage this if they were careful about the rate at which cable was rolled out. Now that in fact seems to be what has happened. Cable continues to be built but demand is also growing quite quickly.
SNOWDON: The investment consortium included national and private telecoms from Thailand, Vietnam, Singapore, Malaysia, the Philippines and Hong Kong, as well as the US. The cable interconnects with the existing system of Australia's Telstra, extending its reach into Asia and the US as well. David Kennedy says it's a significant development and delivers fast easy access to the world for Southeast Asia and Australia.
KENNEDY: It'll be easier and in particular it'll be cheaper because these new cable systems offer a great deal more capacity at a similar priced to the old systems. Although demand is increasing we've also seen a lot of investment in trans-Pacific cable networks over the last few years, and that's working of course to keep prices down by offering competing routes. And countries like Australia as well have been the beneficiary of that.
SNOWDON: How does this connect with Australia's existing cables and access to the same areas?
KENNEDY: What we've seen in the last few years is a lot of cable being built out of Australia and Southeast Asia up towards the north to take advantage of these new very fat pipes that are being installed between say the United States and Japan or the United States and China. So for example the Australia-Japan cable's been in place for quite some time, the pipe network, which was recently taken over by TBG Seoul has also been put into place, precisely to exploit these falling prices on the trans-Pacific route. So what that boils down to is cheaper international connectivity for Australia ISPs and that's helping to hold down or rather maintain the stability of retail broadband prices in the Australian market.
SNOWDON: And what are the forecasts for the continuing growth in demand from the region for these services?
KENNEDY: There are two simultaneous drivers to growth in the Asian region; very fast growth in connections and the emergence of new bandwidth hungry applications. So yes, Asia is a hotspot for growth in broadband demand, and as I said we don't expect that to slow down in the next few years.
