Asia Pacific Vantage By John Hibbard
A
s an industry player, I constantly look for measures to monitor the current telecoms climate and the mood of the industry. Clearly as a consultant, the level of business (or more precisely business opportunities) gives an indication. But one of the more significant markers is the Pacific Telecommunications Conference held each year in January in Hawaii. The level of attendees, and the associated gaggle of supporters and networkers provide a great metric of the health of our business. Given the conference focus attracts people from the international telecoms arena, it is useful in assessing the state of the submarine cable business. Unfortunately only registrants can be easily counted, but it is widely accepted that this numbers represents about 25% of the telecoms folks who come to Hawaii. Through the 1990s decade, the attendance grew steadily to a peak of 1850 registered attendees in 2001. With the bursting of the bubble, it fell to 1400, 1000 and bottomed in 2004 at under 800. Last years 900 attendees confirmed the growing mood of optimism that the worst was behind us. For many of us, it is a great time to be involved in the submarine cable industry, so my intuition says that the PTC numbers should be up further this year with more registered attendees and several thousand “networkers” alongside them. My optimism comes from the facts that there is a driving demand for capacity, that many of the cables are filling all their lit capacity, that there are improved techniques for generating capacity, that there are a few new cables being laid -- and then there are China and India —both great opportunities for growing the wealth of our business.
Demand The demand for international capacity to support the global Internet continues apace. A year ago I wrote in SubTelForum that the rollout of Internet services was starting to put a smile on cable operators’ faces. Well after a year of increasing demand, most of them are now beaming. In September 2005, the OECD released a report (http://www.oecd.org/document/16/0,2340,en_2649_ 34225_35526608_1_1_1_1,00.html#data2004 )
analysing the recent trends in broadband internet connections. The growth in the last 12 months was 38% across the OECD which represents in general the more developed countries in the world. Sure this is less than in the previous 2 years where it was 43% and 58% but it is still very healthy. Possibly far more significant than these growths in broadband internet subscribers is the resultant usage of capacity for the essential connectivity. In most circumstances, as penetration of a service increases, the incremental utility of the service decreases. Look at the case of ARPU for mobile users. The late subscribers tend to have less need and so make less use of the service bringing down the average. However if we go to Australian statistics, notwithstanding the addition of late adopters, the average demand for capacity per user has increased. At June 2005, there were 2.18 million broadband users. The current estimated demand for international capacity to support those users is 35 Gbps, or 16 Kbps per user. Two years ago when similar measurements were performed, the figure was 12