Empowered Asia Pacific Attracts WAN: Study

by CXOtoday Staff    Sep 21, 2006

Increasing political stability in the Asia Pacific region, and its strong position as a most favored destination for business process outsourcing operations has fuelled a demand for international WAN services here, said a recent study of Frost & Sullivan.

“Many MNCs have established regional bases in Asia Pacific, while many Asian enterprises are also expanding beyond their home markets. These factors, as well as Asia Pacific’s strong position as the preferred destination for business process outsourcing (BPO) operations, are fueling the demand for international WAN services in the region,” said Frost & Sullivan industry analyst Krishna Baidya.

The analysis - covering 13 major Asia-Pac economies, stated that the WAN services market earned revenues of $17.41 billion in 2005 and would likely to reach $18.57 billion in 2012.

Notably, India and China are showing a clear lead in the area, with domestic and international connectivity needs increasing due to rapid growth of the SME sector, and India’s increasing BPO activities. The two markets are expected to account for 18.1% of the total WAN services revenue in Asia-Pac by 2012.

In terms of technologies used, though IPLC (international private leased circuit) and LLC (local loop circuit) are current favorites, IP VPN (IP-based virtual private network) will make its presence felt, being expected to go from 31.4% of total WAN services revenues in 2005, to 52% by 2012.

Challenges to this trend though could come from a trend of declining prices for such services - especially in deregulated markets - which could lead to revenue declines. Also, investments already made in a WAN infrastructure could inhibit large-scale migration to more sophisticated services like IP VPN.