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Price Wars Persist in the Growing Asia-Pacific International Data services Market - New analysis by global growth consulting company, Frost & Sullivan, Asia Pacific International Data Services Market 2007, evaluates the pricing trends for data services on key international routes from nine major Asia-Pacific countries
Price Wars Persist in the Growing Asia-Pacific International Data services Market

 

PRZOOM - /newswire/ - Singapore, Singapore, 2007/05/17 - New analysis by global growth consulting company, Frost & Sullivan, Asia Pacific International Data Services Market 2007, evaluates the pricing trends for data services on key international routes from nine major Asia-Pacific countries.

   
 
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The international data services market in Asia-Pacific is growing steadily, boosted by the high economic growth in the region - especially in India and China. While connectivity needs are increasing, the end users in the region remain price sensitive. Coupled with the intense competition that keeps prices down, data service providers are finding it increasingly difficult to see satisfactory revenue growth.

New analysis by global growth consulting company, Frost & Sullivan (communicationsservices.frost.com), Asia Pacific International Data Services Market 2007, evaluates the pricing trends for data services on key international routes from nine major Asia-Pacific countries.

“The continuous inflow of FDI (foreign direct investment), establishment of regional bases by MNCs (multinational corporations) in growing economies, increasing importance of Asia as a BPO (business process outsourcing) destination, and the expansion of Asian enterprises beyond home markets are the few factors that are fuelling international connectivity needs,” says Frost & Sullivan industry analyst Krishna Baidya.

“Bandwidth demand is escalating with enterprises seeking the convergence of voice and data networks and running more bandwidth-intensive applications. The increasing adoption of broadband and the booming Internet market in the region is also driving the demand for greater bandwidth. Anticipating the need for higher capacity, carriers have started to invest in upgrading existing submarine cable systems, as well as deploying new ones,” he says.

Imminent regulatory changes such as opening up the resale market are also influencing some heavily regulated markets like India. This is likely to set the stage for fierce competition, which in turn would result in price reduction. In regulated markets such as China and Malaysia, the incumbents dominate the market and face less competitive pressures.

Taking advantage of the competition, enterprise customers continue to demand for more value-added services and negotiate for better rates based on the duration and value of the contracts. Price-sensitivity in carrier selection is however subsiding, with network availability and stability taking priority instead.

“IP VPN (Internet Protocol virtual private network) in particular is seeing high demand even though IPLC (international private leased circuit) remains the most popular data service in Asia-Pacific,” adds Baidya. “Legacy services such as frame relay and ATM (asynchronous transfer mode) are slowly being phased out.”

With technological maturity and security concerns being addressed, IP VPN has managed to attract subscribers of legacy data services to migrate. In relatively developed markets such as Hong Kong, Japan, Singapore and South Korea, carriers are increasingly aggressive in marketing this service, and mass migration to IP VPN is expected to start within the next 18 to 24 months.

The bandwidth capacity in Asia-Pacific is also finally somewhat in sync with demand. This is slowing the otherwise fast-eroding pricing trend for bandwidth. Service providers must now concentrate more on differentiating themselves in a commoditized data connectivity services market by adopting a more consultative selling approach with customized end-to-end solutions and better QoS (quality of service) levels.

In an effort to create service differentiation, a handful of regional carriers have introduced international Ethernet services in late 2005. With the growing adoption of IP-based services, this is perceived as an ideal and cost-effective choice for extending the enterprise customers’ domestic Ethernet circuits to other cities in the region. However, the service is currently limited to destinations that have a well-established domestic Metro Ethernet network.

The Asia Pacific International Data Services Market 2007 study is part of Communication Services subscription, which also includes research in the following markets: Asia-Pacific WAN services, IP VPN, fixed-line and Internet databank, converged services, and fixed, mobile, Internet and data communications. All research services included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants. Analyst interviews are available to the press.

If you are interested in a virtual brochure, which provides service providers, vendors/manufacturers, end users, and other industry participants with an overview of Asia Pacific International Data Services Market 2007, then send an email to Sarah Lourdes, Corporate Communications, at sarah.lourdes[.]frost.com with your full name, company name, title, telephone number, fax number and email address. Upon receipt of the above information, an overview will be sent to you by email.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics.

 
 
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Price Wars Persist in the Growing Asia-Pacific International Data services Market

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