J’son & Partners Consulting presents brief results of a study of the market for the transit of telecommunications traffic between Europe and Asia, including ground-based Russian and competitive underwater routes, and a forecast of the demand for transit capacity until 2018.
Key research questions
The study analyzes the experience of creating transit telecommunication routes between Europe and Asia, the strategies of Russian and international operators in this direction. Particular attention is paid not only to the description of existing routes, key market players and traffic exchange points, but also to the analysis of key factors affecting the volume and structure of demand, the choice of a provider of telecommunication capacity on international routes, and pricing in various directions. Here one can switch to wholesale routes for international calls termination >> az wholesale voip termination web solution.
Practical value of the study
Based on the results of market modeling conducted by J’son & Partners Consulting on the basis of a detailed analysis of the actual demand data of the main countries of the Eurasian continent since 2007, global cable systems development projects and international operators’ strategies, the following assessments were made:
- The forecast of demand for the main capacity between Europe and Asia to 2018 in natural and monetary terms;
- Detailed breakdown by geographic regions – East Asia, Southeast Asia, countries of the Indian region and the Persian Gulf, Middle East and Central Asia;
- Estimation of the market share of Russian operators in the transit segment from East Asia, as well as the prospects for other land routes.
Meeting with analysts J’son & Partners Consulting September 15, 2015 at the conference Capacity Russia 2015:
- Sergey Shavkunov, Executive Director – Session “Industry Forecasts and Trends”;
- Mikhail Shekhovtsov, managing director for media projects-session “Interaction between content providers and operators”.
Additional information: http://json.tv/event/capacity-russia-cis-2015-20150821015557
As you know, the main driver of increasing demand for backbone capacity is the development of Internet networks. Globally it is based not only the explosive growth of digital content, but also the uneven distribution in the world, as well as the ubiquitous growth of broadband access networks and the number of broadband devices owned by the consumer.
According to the estimates of the international agency TeleGeography, the average annual growth in demand for international capacity in major submarine cable systems in the world remains at a high level, while in the long term until 2020, they will be among the highest and equals to over 35% in the transit segment Europe-Asia.
Currently, the transit of telecommunications traffic between Europe and Asia can be carried out through the three routes: through the USA, the Indian Ocean and via land routes through Eurasia. The main reason for this distribution of traffic is the availability of a developed transit infrastructure, the geographical proximity of certain countries to the international points of traffic exchange between regions and the relatively low cost of transit. Land routes pass through such countries as China, Mongolia, Russia, Kazakhstan, Ukraine, Belarus, Turkey and others.
Based on its own model and analysis of historical demand data, J’son & Partners Consulting analysts prepared a forecast of the international transit capacity market between Europe and Asia through 2018. A distinctive feature of the adopted methodology is the consideration of the geographical orientation of demand in the main countries of Eurasia.
According to the forecast of J’son & Partners Consulting during the period 2014-2018 this market will increase almost fourfold and will reach over 41 Tbit / s. At the same time, the structure of the market in physical terms by geographical directions will undergo certain changes. An increase in demand for the Indian direction and a decrease in the share of demand from the countries of the Middle East is forecasted. In financial terms, the Europe-Asia transit capacity market will grow and reach $ 863 million.
In order to identify the main factors influencing the choice of the provider of traffic transit services, J’son & Partners Consulting conducted a survey of leading international operators that provide services for lease international channels. It is worth emphasizing that, as a rule, international operators are also consumers of these services from other operators. For example, national or regional operators to meet the needs of their customers in individual countries where large players do not have their own network.
The survey was conducted among the participants of Capacity Russia conferences (October 6-7, 2014) and Capacity Europe (November 3-5, 2014). It was attended by 53 international operators from Europe, Asia, North and Latin America. 29 operators are among the largest operators in the world in terms of revenue according to the Global 100 rating, published annually by Terrapinn. According to the survey results, seven most important factors for operators were identified.
It should be noted that the price of services is traditionally in the first priority among operators making wholesale purchases of telecommunication capacity in order to develop their network and meet the needs of the customers. Nevertheless, the survey showed that operators began to pay more attention to the quality of services and ensuring their guarantees (SLA), by the share of answers “very important” the quality even outstrips the price.
All Russian operators of the land route between Europe and Asia – Rostelecom, TransTeleCom and MegaFon – called the shortest distance and, correspondingly, the minimum signal delay (RTD), the most important factor in the premium of their route. In recent years, the impact of RTD has been increasing and it is becoming an important factor in the selection of a supplier of international capacity. In this regard, all Russian operators – participants in the Europe-Asia transit were involved in a competitive race for achieving the minimum possible result.
To assess the demand and competitiveness of Russian transit routes, J’son & Partners Consulting turned to the main suppliers and consumers of telecommunication capacity on the land route through Russia.