TeleGeography Workshop: International Market Trends PTC 14 January 19, 2014
Preview of the Action International Voice (Paul) Pricing and Enterprise Services (Rob) International Networks (Tim)
Still Not Dead Yet International Voice Feel the Excitement! TeleGeography Paul Brodsky pbrodsky@telegeography.com
Nothing Lasts Forever International traffic and growth rates, 1993-2013!
The Revenue Tightrope Retail traffic, price, and revenue change, 1994-2012!
Growth Continues in Some Mark International traffic growth by region, 2007-2012!
But Volumes are Low Originated and Terminated Traffic by Region, 2012!
Fixed-Mobile Divergence Share of ILD originated and terminated to fixed and mobile!
Mobile Is Getting Cheaper Mobile Interconnection Rates, 2010-2014!
The Wholesale Treadmill Wholesale Traffic & Revenue, 2003-2012!
Who s Big? Who s Biggest?
Skype Is Not Just A Fad International Telephone and Skype Traffic!
The Skype Effect
Outlook: Not So Bad The good news Volume is growing, if more slowly. Global revenues are fairly stable. Price declines have moderated, and largely reflect cost reductions. There is no clear substitute for the PSTN, and even Skype needs to make money.
Outlook: Not So Good Either The bad news Traffic growth has stalled. Revenues have peaked. Skype has a lot of company. Communications is fragmenting into contextbased channels. More consolidation is inevitable.
Global Pricing and Enterprise Services TeleGeography Rob Schult rschult@telegeography.com
Benchmarking the Industry The (Simplified) Telecom Data Value Chain Wholesale Bandwidth TDM & DWDM, submarine cable and terrestrial backbone network IP Transit / IP MPLS Backbone Ethernet Backbone Enterprise Private Line Enterprise Services: IP VPN, DIA Enterprise Ethernet: EPL, ELAN
Does Technology Drive Price Erosion?
Cost Reduction Encourages Competition!
Marketing Conditions Buyers!
More for Your Money! 2003 vs. 2013 BMW 1200 R Approximate cost: $17,500
More for Your Money! Hong Kong-Tokyo, $17.5K Circuit over Time!
Prices on Major Routes Converge Ratio of MRC to Los Angeles-Tokyo, Q4 2013!
Bandwidth Pricing Trends Los Angeles-Tokyo 10G Price Range,! Q4 2010- Q4 2013!
How Fast are Prices Falling?
The Danger of Price Based on Incremental Upgrade Cost!
Emergence of 100G 10G to 100G Price Multiples!
10 GigE IP Transit Price, Q4 2013
Local IP Transit is Expanding
IP Transit Pricing Trends
Enterprise Services
Carrier On-Net Services
Carrier On-Net VPN Services
Enterprise Networks Pricing 10 Mbps VPN Port Price, Best Efforts CoS! H2 2013!
Carrier On-Net EoMPLS Services
Ethernet Pricing Service FastE EoMPLS, Best Efforts CoS, H2 2013!
Ethernet Pricing Service FastE EoMPLS, Best Efforts CoS, H2 2013!
Carrier On-Net E-LAN Services
Ethernet Pricing Service Median Monthly Lease Prices for Best Efforts FastE E-LAN Port, H2 2013!
Local Access
Local Access Demand-Ethernet
Local Access Demand-Leased Line
Relative Cost of Local Access, Monthly Lease, E-1/T-1
Price per Mbps Comparison
The Future! Thank You!
Stuff I Don t Know (About International Networks) TeleGeography Tim Stronge tstronge@telegeography.com
Quotes to Inspire The more we study, we the more discover Our ignorance. Percy Bysshe Shelley Is it ignorance or apathy?... Hey, I don't know and I don't care. Jimmy Buffett
Question 1 Why has trans-atlantic demand grown more slowly than we predicted?
Global Growth Strong, As Predicted
Global Growth Strong, As Predicted
What s Up with the Atlantic?
What s Up with the Atlantic?
Growth Fundamentals Still Solid
Growth Fundamentals Still Solid
Some Reasons Why: Content providers increasingly serving content from Europe Effect of caching More physical peering in Europe These are mostly one-time adjustments Pace of trans-atlantic demand growth will likely stabilize
Question 2 Who will be the big users of capacity in the future?
We ve Already Changed Note: Combined share of downstream IP addresses represents share of third-party IP address in Europe, U.S., and Canada assigned to BT, Verizon, Vodafone, Deutsche Telekom, France Telecom, and AT&T as upstream ISPs. IP address share data compiled June 2013 based on BGP table analysis.
Is a New Shift Underway?
Who Are These Guys? Content/Cloud Service Providers e.g., Google, Facebook, Microsoft CDNs e.g., Limelight Research Networks e.g., LHCnet Other Network Types to Come?
Let s Not Get Carried Away: ISPs Are Still Driving the Bus
Question 3 How much bandwidth can we squeeze out of old cables by upgrading?
Potential Capacity Keeps Increasing
Trans-Atlantic Potential Capacity Potential Capacity as Currently Announced by Operators! Notes: Estimates found in TeleGeography Global Bandwidth Forecast Service. Figures show demand vs. supply with no new cable construction.
Trans-Atlantic Potential Capacity Potential Capacity if 100x 100G Wavelengths per Fiber Pair! Notes: Estimates found in TeleGeography Global Bandwidth Forecast Service. Figures show demand vs. supply with no new cable construction.
Trans-Pacific Potential Capacity Potential Capacity as Currently Announced by Operators! Notes: Estimates found in TeleGeography Global Bandwidth Forecast Service. Figures show demand vs. supply with no new cable construction.
Trans-Pacific Potential Capacity Potential Capacity if 100x 100G Wavelengths per Fiber Pair! Notes: Estimates found in TeleGeography Global Bandwidth Forecast Service. Figures show demand vs. supply with no new cable construction.