News

International Data Services Steadily Jumps Hurdles of Price-play and Bandwidth Glut

The rising economy in Asia Pacific has fueled the demand for international data services. "Other factors contributing to the growth of this market include the expansion of Asian enterprises beyond their home markets as well as the booming Internet and broadband sector," explains Frost & Sullivan industry analyst Krishna Baidya. "International private Leased Circuit (IPLC) services remain the most popular data offering, while fast growing Internet Protocol Virtual Private Network (IP VPN) is posing a threat to traditional services such as Asynchronous Transfer Mode (ATM) and frame relay."

Enterprises seeking convergence of voice and data networks to run bandwidth-intensive applications are driving the demand for data services. Having overcome technological maturity and security concerns, IP VPN has managed to attract subscribers of traditional data services to migrate to this technology. In developed markets such as Hong Kong, Japan, Singapore and South Korea, carriers are aggressively promoting this service and mass migration is expected within the next two years.

Despite the promising growth, the Asia Pacific data services market remains price sensitive. "While the international data services market in Asia Pacific is experiencing steady growth in demand, the price war due to bandwidth glut on most international routes has persisted," explains Baidya. "Enterprise customers are also demanding the bundling of more value-added services."

Adopting a more consultative selling approach, service providers are today offering customized end-to-end solutions in every type of service and at every level sought by customers. In an effort to create service differentiation, a handful of regional carriers have introduced international Ethernet services in late 2005, which is seen as a cost-effective choice for extending enterprise customers’ domestic Ethernet circuits to other cities in the region.


print	save	email	comment