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Issue of November 2004 
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Indian leased lines five times costlier than other Asian countries

Gartner Inc. released a report titled 'International Bandwidth Pricing Trends Asia-Pacific', which stated that international leased line prices from India are five times more expensive owing to factors like less competition, as compared to hub routes like Singapore-Hong Kong or Singapore-Tokyo.

It also stated that international bandwidth prices in the Asia-Pacific region will continue to decline by 20 to 25 percent annually in the next three years. This is because of the large number of players aggressively competing for enterprise business and the excess capacity across Asia.

For the fast growing Indian market, new submarine cables like TICS (Tata Indicom Chennai Singapore), FLAG Falcon (Reliance) and SMW-4 will add capacity on both the western routes towards Europe and eastern routes towards Singapore. This will result in a 40 to 50 percent annual price decline for international connectivity from India.

According to Gartner, the most competitive markets for international bandwidth are Hong Kong, Singapore, Japan, Taiwan and South Korea, whereas the least competitive markets are Indonesia, Malaysia and India.

The report however says that the price of intra-city leased lines in India is one of the cheapest in Asia Pacific.

- Mumbai Bureau

International leased line pricing in US$ per month
Cities Price for a 1 Mbps link
Hong Kong - Tokyo
690
Singapore - Hong Kong
910
Singapore - Mumbai
4800
Singapore - Jakarta
6000

Key highlights of the study:

  • International bandwidth prices in the Asia-Pacific region will continue to decline by 20 to 25 percent annually in the next 3 years.
  • l The most competitive markets for international bandwidth are Hong Kong, Singapore, Japan, Taiwan and South Korea.
  • The intra-city local leased line prices in India are already among the lowest in Asia.
  • IP-VPN prices are two times higher than international leased line prices on some routes.
  • International leased line prices have already declined dramatically and price erosion is already slowing down but will still be significant in the next 3 years.
  • In developed markets like Singapore the price erosion will taper off in 2007.

 
     
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