Trans-Pacific demand for bandwidth remains strong, with an increase of 49% in used capacity for 2014. According to data provided by research firm TeleGeography, the Trans-Pacific route has grown more quickly than the trans-Atlantic, where used capacity grew 41% over the previous year. Additionally, used capacity more than doubled between 2012 and 2014, increasing from 7.2 Tbps to 16.3 Tbps.
The transition to 100 Gbps wavelengths on Trans-Pacific systems has brought significant increases in potential capacity on existing cable systems. Between 2012 and 2014, potential capacity more than doubled from 49 Tbps to 102 Tbps. In 2010, 33% of all capacity was lit on Trans-Pacific cables, while in 2014, only 24% of all potential capacity was lit.
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Wholesale Insights November 2015
Trans-Pacific capacity prices are significantly higher than that of Trans-Atlantic routes. Median monthly lease prices for 10 Gbps wavelengths on the Los Angeles-Tokyo route dropped 16% in 2014 to $16,000, declining at a compound annual rate of 26% from 2011 to 2014. Median prices on other trans-Pacific routes are higher. Median monthly lease prices for 10 Gbps wavelengths on the Hong Kong-Los Angeles route declined at a compound annual rate of 34% from 2011 to 2014 to $28,000. Median prices on the Los Angeles-Singapore route dropped a similar amount but are slightly higher at nearly $29,700 per month.
Intra-Asian bandwidth prices vary substantially by route, reflecting differences volume, competition, and the regulatory environment. Median 10 Gbps lease prices on the Hong Kong-Tokyo and Singapore-Tokyo routes decreased a compound annual rate of 29% between 2011 and 2014. During this period, the rate of price erosion on the Mumbai-Singapore routes was slightly slower. Median 10 Gbps wavelength prices on this route declined at a compound annual rate of 26%. In 2014, median 10 Gbps wavelength prices on the Mumbai-Singapore route were six times greater than the Singapore-Tokyo route.
Pan-Asia Demand
The Asia region has a unique mix of both mature and developing markets, with wide variations in the rate of demand growth. Overall, the pace of Asia’s international bandwidth usage growth is slowing but is still higher than rates seen in other regions. Between 2013 and 2014, Asia’s used international bandwidth rose 62%,
More than most regions, Asia derives most of its international bandwidth through submarine cables. Between 2010 and 2014, the lit capacity of intra-Asian submarine cables increased at a compounded annual growth rate of 38%, from 8.7 Tbps to 31.9 Tbps. Potential capacity grew faster than lit capacity, increasing at a compound annual growth rate of 49%, due to the introduction of new cables and the increased potential capacity of older cables due to 100 Gbps technology.
This article was first published in Telecom Asia Wholesales Insights November edition