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Asia-Pacific WAN Services to Grow Ten Percent, Exceed US$13 billion in 2010 Estimates Frost & Sullivan - The Asia-Pacific WAN (wide area network) services market is forecasted to hit nearly US$13.3 billion in revenues by the close of 2010, rising ten percent over 2009 billings of US$12.0 billion
Asia-Pacific WAN Services to Grow Ten Percent, Exceed US$13 billion in 2010 Estimates Frost & Sullivan

 

NewswireToday - /newswire/ - Singapore, Singapore, 2010/05/21 - The Asia-Pacific WAN (wide area network) services market is forecasted to hit nearly US$13.3 billion in revenues by the close of 2010, rising ten percent over 2009 billings of US$12.0 billion.

   
 
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The market grew a modest 6.2 percent last year in spite of one of the worst recessions. Frost & Sullivan research manager Arun Chandrasekaran rationalizes that the growth was stoked by cross-regional branch expansions and data centre consolidation.

He estimates the per annum growth for WAN services to hover around the ten percent mark till 2013 - before dipping slightly - with Ethernet and IP VPN (Internet Protocol Virtual Private Network) expected to see huge gains during this time.

"The convergence of voice, video and data is prompting rising demand for MPLS IP VPN (Multi-protocol Label Switching IP VPN) services given its scalability, low TCO (total cost of ownership) and ease in multiple site connectivity," Chandrasekaran says. "While Ethernet is proving to be the preferred technology for high-speeds and connectivity between limited sites such as data centre-to-data centre."

New analysis from Frost & Sullivan (communicationservices.frost.com), Asia-Pacific WAN Services Market - covering 13 Asia-Pac countries ex-Japan - estimates the market to grow at a CAGR (compound annual growth rate) of 9.4 percent (2009-2016), clocking revenues of US$22.6 billion by end-2016.

If you are interested in more information about this study, then send an e-mail to Sarah Lourdes at sarah.lourdes@frost.com, with your full name, company name, title, telephone number, company e-mail address, company website and country.

According to Chandrasekaran, the migration from legacy services to IP and Ethernet services continued at breakneck speed in the past 12 months due to the weak economic climate. "Enterprises faced with unviable telecom OPEX (operational expenditure) switched to MPLS and Ethernet to reduce cost and simplify management," he reasons.

"Many carriers have in fact decommissioned their circuits for legacy technologies such as frame relay (FR) and ATM (asynchronous transfer mode) due to the lack of demand," he adds. By 2016, the demand for FR and ATM is expected to ebb considerably - each serving less than one percent of the domestic and international WAN routes.

Domestic traffic made up approximately 71 percent (US$8.57 billion) of the regional WAN revenues last year. Leased-circuits (LLC), still very much a dominant technology for domestic routes, accounted for 56 percent of the domestic WAN traffic in 2009.

Waning demand for LLC however is forecasted - by 2016, LLC will account for just 32 percent of domestic WAN needs - to be gradually replaced by MPLS IP VPN which is expected to serve a majority 46 percent of domestic WAN connectivity by 2016 (up from 26 percent in 2009).

MPLS IP VPN already leads in the international WAN segment at 47 percent of international routes last year, and is expected to grow further to 64 percent of international routes by 2016.

Chandrasekaran believes that the key determinants for service differentiation and carrier competitiveness in this segment are ownership of network and region-wide reach.

He says, "The critical attributes for successful WAN service provisioning include strong international routes across the region, deep partnerships with domestic providers, PoPs (point-of-presence) region-wide, NNIs (network-to-network interface) with local providers, and diverse routing - particularly around seismic zones such as the Taiwan and Luzon Straits."

He reckons Carrier Ethernet, both Metro and international services, will grow significantly owing to its simplicity, low cost per Mbps and ability to support high-speeds. Carriers, he expects, will aggressively expand the portfolio of Ethernet services to enhance profitability and control costs.

[Metro] Ethernet services are expected to account for 21 percent of domestic WAN traffic by 2016 (up from only nine percent in 2009); and 22 percent of international circuits (up from seven percent in 2009).

The Asia-Pacific WAN Services Market study is part of the Communications Services Growth Partnership Service program, which also includes research in the following markets: fixed broadband, infrastructure hosting, next-generation network transformation, managed and hosted services, IPTV and data centre services. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents.

 
 
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Asia-Pacific WAN Services to Grow Ten Percent, Exceed US$13 billion in 2010 Estimates Frost & Sullivan

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Publisher Contact: Sarah Lourdes 
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