Broadband Infrastructure in the ASEAN Region
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Broadband Infrastructure in the ASEAN Region Markets, Infrastructure, Missing Links, and Policy Options for Enhancing Cross-Border Connectivity Michael Ruddy Director of International Research Terabit Consulting www.terabitconsulting.com Part 1: Background and Methodology www.terabitconsulting.com Project Scope On behalf of UN ESCAP, Terabit Consulting performed a detailed analysis of broadband infrastructure and markets in the 9 largest member countries of ASEAN: – Cambodia – Indonesia – Lao PDR – Malaysia – Myanmar – Philippines – Singapore – Thailand – Vietnam www.terabitconsulting.com Sources of Data • Terabit Consulting has completed dozens of demand studies for submarine and terrestrial fiber networks worldwide – Constant contact with operators, ISPs, and other stakeholders • Terabit Consulting’s published reports include: – The Undersea Cable Report (1,500+ pages) – International Telecommunications Infrastructure Analysis (1,000+ pages) • Terabit Consulting’s core data and intelligence covers infrastructure, demand, traffic flows, pricing, and market share www.terabitconsulting.com Part 2: State of the ASEAN-9 Bandwidth and Broadband Markets www.terabitconsulting.com Int’l. Internet Bandwidth, Preliminary YE14 Est. Myanmar: 32 Gbps Vietnam: 875 Gbps Laos: 13 Gbps Philippines: 1,225 Gbps Thailand: 1,215 Gbps Cambodia: 22 Gbps Malaysia: 920 Gbps Singapore: 3,000 Gbps Indonesia: 600 Gbps www.terabitconsulting.com Int’l. Internet Bandwidth per Capita (Kbps, YE14) 600 555.6 500 400 300 200 Countries with 2.5 Kbps per Capita or Less: 100 SERIOUS OBSTACLE TO DEVELOPMENT 31.0 18.1 0.6 1.5 1.9 2.4 9.8 12.4 0 Myanmar Cambodia Laos Indonesia Vietnam Philippines Thailand Malaysia Singapore • Average in Western Europe: 100 Kbps www.terabitconsulting.com Int’l. Internet Bandwidth per Capita in Central Asia 25 22.4 20 17.4 16.5 15 (Kbps) 10 5 0.9 0.1 0.3 0.3 0.4 0 Turkmenistan Uzbekistan Tajikistan Afghanistan Kyrgyz Republic Kazakhstan Russian Azerbaijan Federation www.terabitconsulting.com Int’l. Internet Bandwidth per Capita in W. and So. Asia 35 30.7 30 24.0 25 20 (Kbps) 15 10 7.0 5 1.7 2.2 0.3 0.7 1.0 1.5 0 Bangladesh Nepal India Iran Pakistan Sri Lanka Bhutan Maldives Turkey www.terabitconsulting.com ASEAN: Int’l. Bandwidth Infrastructure • Singapore: By far, the strongest in the region – 10 interregional submarine cables in service as of 2015, with 3 more under construction – 7 additional regional systems (Malaysia/Indonesia) – Additional fiber via Causeway and Second Link • Philippines and Malaysia: Strong – PLDT has 3 cable stations, Globe has 2, Pacnet (Telstra) has 2 – Malaysia served by FLAG, Sea-Me-We-3, SAFE, Sea-Me-We-4, APCN-2, Asia Submarine-Cable Express, AAG – Time dotCom shareholder in Unity transpacific cable • Thailand: Average – FLAG, Sea-Me-We-3, Sea-Me-We-4, AAG • Vietnam: Below average, but improving – Sea-Me-We-3 was supplemented by TGN-IA (2009) and AAG (2010) www.terabitconsulting.com ASEAN: Int’l. Bandwidth Infrastructure • Indonesia: Weak – Served by Sea-Me-We-3 but most other infrastructure routes through Singapore • Myanmar: Weak – Served by Sea-Me-We-3 and limited terrestrial connectivity – Planned Sea-Me-We-4 link via Bangladesh and planned Sea-Me-We-5 landing point; Mythic also under consideration by Campana Group (Singapore) • Cambodia and Lao PDR: Very Weak, with no direct interregional connectivity – Cambodian membership in AAG was too late, relies on Ezecom backhaul via Thailand and Vietnam – Lao PDR served exclusively by low-capacity terrestrial trans- border links www.terabitconsulting.com International Bandwidth Infrastructure VN: BELOW AVERAGE MM: WEAK LA, KH: VERY WEAK PH: STRONG TH: AVERAGE MY: STRONG SG: VERY STRONG ID: WEAK www.terabitconsulting.com The Impact of Low International Bandwidth & Weak International Infrastructure • At the macro level: a major obstacle to economic and human development – Detachment from digital economy – Continued economic inefficiencies and restrained growth – Lack of access to critical social tools including telemedicine, distance learning, scientific/research nets • More specifically within the telecom environment: higher wholesale and consumer prices, and lower broadband adoption rates – Cambodia, Lao PDR, Myanmar, and Vietnam: $50+ per Mbps wholesale • Compared to Singapore: $5 to $10 per Mbps www.terabitconsulting.com Weak Int’l. Bandwidth Impacts Consumer Pricing 1 Mbps Broadband Connection: Annual Subscription + Installation as a % of Per-Capita GDP (2013) 132.80% 140% 120% 100% 80% 60% 48.70% 40% 27.40% 11.20% 20% 7.90% 5.50% 4.40% 0.50% 0.10% 0% Myanmar Cambodia Lao PDR Philippines Vietnam Indonesia Malaysia Thailand Singapore www.terabitconsulting.com Overview of Broadband Status Annual 1 Mbps GDP per Int’l. Fixed and Broadband Competitive- Capita, YE Band- Int’l. Domestic Mobile Subscription + IP Transit ness of 2014 width per Connect- Connect- Broadband Installation as % Price Telecom (PPP, Capita ivity ivity Infra- of Nominal GDP Market USD) (Kbps) structure per Capita (2013) Very Reasonably Cambodia $3,200 1.5 Weak Adequate Very Limited 48.7% Expensive Competitive Indonesia $10,500 2.4 Weak Adequate Expensive Competitive Growing 5.5% Very Less Lao PDR $5,000 1.9 Weak Limited Very Limited 27.4% Expensive Competitive Reasonably Reasonably Relatively Malaysia $24,000 31.0 Excellent Adequate 4.4% Priced Competitive Strong Very Newly Myanmar $4,700 0.6 Weak Limited Limited 132.8% Expensive Competitive Relatively Very Less Philippines $7,000 12.4 Excellent Growing 11.2% Strong Expensive Competitive Reasonably Singapore $83,000 555.6 Excellent Very Strong Inexpensive Very Strong 0.1% Competitive Relatively Very Reasonably Thailand $14,300 18.1 Average Average 0.5% Strong Expensive Competitive Somewhat Less Vietnam $5,600 9.8 Limited Expensive Limited 7.9% Weak Competitive www.terabitconsulting.com Conclusion of Bandwidth Analysis • A clear divide between Asia’s bandwidth “haves” and its bandwidth “have-nots.” • The first step in addressing the inequality is the construction of international fiber infrastructure that puts the entire continent on an equal footing. www.terabitconsulting.com Part 3: Identification of Priority Cross- Border Terrestrial Links www.terabitconsulting.com Priority Terrestrial Fiber Links High Priority Lao PDR to Yunnan Indonesia to/from Malaysia Medium Priority Cambodia to Thailand Lao PDR to Cambodia Lao PDR to Myanmar Myanmar to Thailand Myanmar to Yunnan Vietnam to Yunnan www.terabitconsulting.com Envisioned Regional Fiber Network Based on Priority Trans-Border Links LEVERAGING LINEAR INFRASTRUCTURE www.terabitconsulting.com Metcalfe’s Law: The Value of a Network is Proportional to the Square of the Number of Nodes TERRESTRIAL EXPANSION TO EUROPE INTEGRATION WITH REGIONAL AND TRANSOCEANIC SUBMARINE CABLES www.terabitconsulting.com Part 4: Why a Coherent, Open-Access, Cost-Effective Pan-Asian Fiber Infrastructure Would Benefit the Region www.terabitconsulting.com Why a Coherent Pan-Asian Infrastructure Would Benefit the Region Reason #1 Telecommunications and Internet development in Myanmar, Laos, and Cambodia, as well as each country’s overall economy, has greatly suffered as a result of weak international infrastructure. www.terabitconsulting.com The Impact of Low International Bandwidth & Weak International Infrastructure • At the macro level: a major obstacle to economic and human development – Detachment from digital economy – Continued economic inefficiencies and restrained growth – Lack of access to critical social development tools including telemedicine, distance learning, scientific/research networks • More specifically within the telecom environment: higher wholesale and consumer prices, and lower broadband adoption rates – IP transit in the region’s less developed markets can be more than $50 per Mbps • Compared to HK: $5 per Mbps • Compared to Turkey: $2.60 per Mbps • Compared to USA: $1 per Mbps www.terabitconsulting.com Why a Coherent Pan-Asian Infrastructure Would Benefit the Region Reason #2 Despite their developed international connectivity, the markets in the study with strong, low-cost bandwidth (e.g. Singapore) would greatly benefit from improved pan-regional terrestrial fiber. www.terabitconsulting.com Pan-Regional Fiber Benefits Markets with Strong Connectivity • Mesh connectivity throughout the region would increase all countries’ network reliability and provide critical outlets of connectivity – Allowing Singapore to have a stronger alternative to the Strait of Malacca and the Egyptian bottleneck, for instance • Stimulating the region’s overall demand presents a greater market opportunity for transit providers and cable operators including Singtel, Telekom Malaysia, Time dotCom, and True. www.terabitconsulting.com Why a Coherent Pan-Asian Infrastructure Would Benefit the Region Reason #3 Coherent pan-Asian terrestrial fiber optic infrastructure would benefit markets across the continent and beyond, and help address one of the international bandwidth industry’s most pressing concerns, namely the lack of reliable, cost-effective Europe-to-Asia bandwidth. In financial terms, the viability of constructing coherent pan- Asian terrestrial fiber optic connectivity can likely be guaranteed by capturing even a small portion of bandwidth demand between Asia and Western Europe. www.terabitconsulting.com Strong Europe-to-Asia Bandwidth Demand Lit Capacity, Submarine Cables serving South Asia (incl. Europe-Asia), 2007-2013 Source: The Undersea Cable Report by Terabit Consulting www.terabitconsulting.com