Price Wars In Asia-Pacific Data Market

by CXOtoday Staff    May 17, 2007

Thanks to the high economic growth in Asia-Pacific, especially India and China, its international data services market is perceptibly expanding. However, severe competition is keeping prices low and is hindering any substantial returns.

A recent analysis by a worldwide development consulting company, Frost & Sullivan, “Asia Pacific International Data Services Market 2007″, evaluates pricing trends for data services on major international routes from 9 major countries in the Asia-Pacific region.

Foreign Direct Investment (FDI) is constantly flowing in, and MNCs are establishing local bases in prospering economies. This has made Asia the favorite Business Process Outsourcing (BPO) destination. Also, Asian businesses have begun pervading the international markets. This in turn has increased need for worldwide connectivity.

“Bandwidth demand is escalating with enterprises seeking the convergence of voice and data networks and running more bandwidth-intensive applications. The increasing adoption of broadband and the booming internet market in the region is also driving the demand for greater bandwidth. Anticipating the need for higher capacity, carriers have started to invest in upgrading existing submarine cable systems, as well as deploying new ones,” says Krishna Baidya, industry analyst of Frost & Sullivan.

India, which has a closely regulated market, is already evolving in response to the opening up of resale market and other impending regulatory changes. This will further heighten the competition and bring down prices. In contrast, in the markets of China and Malaysia, the incumbents control the market, and the competition is less severe.

This competition gives enterprise clientele scope to demand more value-added services and enhanced rates. However, network accessibility and stability is gradually taking over price-sensitivity in carrier selection.