The uncertainty following the glut of bandwidth worldwide has left analysts with mixed opinions about the viability of the market in the Asia-Pacific region, a poll showed yesterday.
Analysts queried by The Business Times newspaper said only about 15 percent of the laid submarine cable capacity has been used.
Daiwa Securities forecast submarine capacity will reach 1,345 gigabits per second (Gbps) over the Asia-US routes by the end of this year, and 91Gbps for the Asia-Europe route.
"I don't think they can break even any time soon," said Brenda Lee, analyst at the Daiwa Institute of Research, referring to cable operator C2C Pte Ltd, a subsidiary of Singapore Telecommunications Ltd. (SingTel).
Between July 2001 and July 2002, the Singapore-Hong Kong data route saw a 40 percent price erosion, and a 23 percent price drop in the China-Hong Kong route.
Overall, Daiwa expects bandwidth prices to fall 30 percent this year, and 25 percent next.
Despite the oversupply, analysis for SingTel suggests demand growth remained healthy.
SingTel expects bandwidth capacity in Asia to grow 112 percent a year through 2006.
Tsunekazu Matsudairo, chief executive officer of C2C Pte Ltd, told the newspaper Internet traffic within Asia is set to grow 35-fold in the next four years, while data traffic between Asia and North America will only go up six or 10-fold.
"Submarine cable capacity may be a commodity business," he was quoted as saying. "But money can still be made from it if the business case is well-made."
Market studies he has seen have shown there will be robust growth of 40 percent a year over the next 10 years in both data and voice, but more for data, he added.
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