AsiaPacific

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Asia-Pacific Latin American Traffic Trends
and ForecastsXXV Reunion Iberoamericana de
Tráfico Internacional - AHCIETTim Stronge,
TeleGeographyApril 29, 2009
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Presentation Outline

• International Voice
• International long distance trends
• Role of VoIP
• International Bandwidth Supply and Demand
• Demand growth in Latin America and Asia
• Who connects to whom?
• A new construction boom
• International Prices Revenue
• Wholesale bandwidth price trends
• Revenuesgoing up?!

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TeleGeography Research
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(No Transcript)
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International Voice and VoIP Trends
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Growth Has Moderated...
Notes Data for 2008 are projections based on
half-year results
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Fastest Growing Destinations, 2002-2007
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Top Ten Wholesale Destinations
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Wholesale Traffic Revenues by Region, 2007
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Total TDM, VoIP and Skype Traffic, 2008
Note Total traffic reflects TDM, VoIP, and
Skypes international PC-to-PC traffic.
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Bandwidth Demand
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The Internet Drives Bandwidth Demand
Share of Used International Bandwidth
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Global Internet Backbones AddingCapacity Rapidly
International Internet Bandwidth Growth, 2002-2008
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Extremely Rapid Traffic Growth in Developing
Markets, though still Strong Everywhere
Average and Peak International Internet Traffic
by Region, 2005-2008 CAGR
Notes Data reflect the growth of average and
peak traffic on Internet links connected across
international borders including links between
countries in each region. Data is the compound
annual growth rate between mid-2005 and mid-2008.
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Worldwide Broadband Subscribers by Technology
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L. America Broadband Markets - Future Growth
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Internet Traffic by Application, 2008
Web, P2P, and streaming traffic account for 78,
the majority of which is video
Notes Data based on the average shares by
application reported by carriers surveyed by
TeleGeography in mid-2008. Web includes
HTTP-based streaming audio/video. Streaming is
only non-HTTP streaming audio/video Source
TeleGeography Research
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Factors Driving Demand Growth

• Broadband subscriber growth
• Increasing broadband access speeds
• Illicit P2P usage
• Skyrocketing growth in legal video content
• Growth in cloud based services

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Geography of Bandwidth Demand
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U.S. Remains a Major Internet Hub
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Miami The Telecom Capital of Latin America
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Reliance on the U.S. is Slowly Waning
International Internet Backbone Connections (
Share of Capacity)
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U.S. Still an Asian Hub
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Bandwidth Supply
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Subsea Capacity is Soaring Due toUpgrades and
New Cables
Lit Submarine Capacity by Route, 2002-2008
Notes Data reflect lit capacity in unprotected
terms at the end of the respective year.
Intra-Asia capacity includes cables with landings
in both Hong Kong and Japan. Trans-Pacific
capacity excludes Southern Cross and Telstra
Endeavour. Trans-Atlantic capacity excludes
Atlantis-2.
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Cost of New Sub Cables Entering Service
Notes Number of new cables is based on the year
that the cable entered service. Cables entering
service between 2009 and 2011 is based on
announced contracts and TeleGeography estimates.
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Number of New Sub Cables Entering Service
Notes Number of new cables is based on the year
that the cable entered service. Cables entering
service between 2009 and 2011 is based on
announced contracts and TeleGeography estimates.
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Proposed New Cables by Region
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Proposed New Cables Caribbean
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Capacity Running Out in the Trans-Atlantic Market
Notes Potential upgradeable and lit capacity
shown in unprotected terms. Potential capacity
available on existing cables as of year-end 2008.
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and also between the U.S. and Latin America?
Notes Potential upgradeable and lit capacity
shown in unprotected terms. Potential capacity
available on existing cables as of year-end 2008.
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Subsea Route Market Concentration
Note This figure applies the Herfindahl-Hirschman
Index (HHI) calculation to lit capacity by cable
per region. The higher the number, the higher
the amount of market concentration. HHI is
affected by market share and number of
competitors.
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Bandwidth Pricing
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Median STM-1 Prices 20022008
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What does 15,000 Buy for One Month?

• 2 Mbps Johannesburg-London (E-1)
• 155 Mbps Hong Kong-Los Angeles (STM-1)
• 10,000 Mbps New York-London (wavelength)
• A new car!

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Private Line Prices Vary by Capacity
LondonNew York Unit Price by Capacity, Q4 2008
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Subsea Capacity Purchase Revenues
Note For simplicity, calculations assume that
all bandwidth sales take the form of renewable
one-year leases.
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Tim Stronge1 202 741 0040tstronge_at_telegeography
.com