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Access Price Benchmarking for APCC 2013

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Access Price Benchmarking

A Study Produced for the

Asia Pacific Carriers’ Coalition

(APCC)

By

TRPC Pte Ltd February 2013


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Table of Contents Page

1. Executive Summary 3

2. Introduction 5

2.1 Scope of Study 8

2.2 Data coverage 10

3. Leased Lines Access 10

3.1 Coverage 10

3.2 Simple and Groomed Circuits 12

3.3 Simple Leased Lines 13

4. Ethernet Access 39

4.1 Coverage 39

4.2 Point-to-point (P2P) Ethernet 39

4.3 Point-to-multipoint (PMP) Ethernet 43

5. Digital Subscriber Line (DSL) 46

5.1 Symmetric/Asymmetric 46

5.2 DSL Installation charges 49

6. Leased Circuits vs. Ethernet Access 51

7. Conclusion 53

8. Appendix 57


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Executive Summary

1. This report follows similar APCC Access Benchmarking reports in 2003, 2006 and 2009. This report covers 14 economies, the same as in 2009 and two more than in the 2006 report. The economies are:

Australia New Zealand China Philippines Hong Kong Singapore Indonesia South Korea India Taiwan Japan Thailand Malaysia Vietnam

2. All 14 economies reported data for leased lines and for Ethernet access and 11 economies for symmetrical DSL compared with six in 2009, and six for asymmetric DSL compared with eight in 2009. The data suggests a continuing spread of Ethernet access, especially for 100Mbps and 1Gbps and use of DSL.

3. As in previous reports, the prices reported are not list prices but the prices actually paid by the seven respondent international carriers. However, it is not possible to judge from the data how representative overall they are of any particular economy. Clearly the actual prices will be influenced by, among other factor, discounts for bulk-buying and for strategic marketing purposes.

4. The idea of real price comparisons was introduced into the 2009 report to take account of changes in dollar exchange rates and local rates of inflation. This report does likewise, but with the caveat that the international financial crisis and policy responses to it has played havoc with currency exchange rates and affected local rates of inflation in different ways. Therefore 2009-equivalent “real” prices are a less reliable measure than in the previous report. At the end of the day international carriers have to pay in very real current US dollars. A table of deflators is provided in Table 2.1.

5. The prices used for comparative purposes 2012-2012 are simple averages across all bitrates of leased circuits. This follows the practice of the previous two reports. Ideally a weighted average would be used reflecting the number of circuits in each category, but this data is mostly not available. Some inference may be drawn that the weighting towards lower-priced (and therefore lower bitrate) circuits has lessened since 2009. See Table 3.3.6a.


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6. Key issues are:

Leased lines remain the most widely used leased circuits. Overall prices have fallen, in some cases substantially such as South Korea by 41% and 22% in Indonesia; but Indonesia, Malaysia and Vietnam are by far the most expensive. Notable trends are the fall in overall prices in India and the continuing fall of prices in China. On the contrary, if the data is taken at face value, reported prices in Australia and New Zealand have increased substantially even more so in “real” prices. However for Australia, removing one set of reported high price data (i.e. treating it as an outlier) reduces the price increase to 2% and in the case of New Zealand for each bitrate there is only one carrier reporting data.

For Ethernet access Vietnam seems to be an outlier, way beyond other economies in price. Also high is the Philippines which shows marked price increases for some bitrates over 2009. Malaysia is close behind but its prices are down by a large margin from 2009.

Installation costs seem to have come down in proportion to annual rentals as the average across all economies is 8.8% in 2012 compared with 8.9% in 2009. However, see Appendix Table 8 for an alternative method of estimation.

Although there is data for leasing DSL circuits from 11 economies, most of it comes from Australia and China, with Australia notably higher in rental charges and notably lower in installation charges than China. Installation charges exceed 10% of annual rental costs for symmetric DSL in five economies, in Malaysia they are reported as reaching 25%. For asymmetric DSL in Australia they are reported as close to 40%.

Certain economies tend to benchmark each other. For ease of reference Table 1

summarizes pairs of economies. Hong Kong continues to stand out as the most price

competitive economy. See Conclusion Tables 7 and 7a-7c.

Table 1

Australia and New Zealand Australia lower for leased circuits but higher for Ethernet

Hong Kong and Singapore Hong Kong consistently lower

Indonesia and Philippines Indonesia higher for leased circuits but lower for Ethernet

Japan and South Korea Japan lower for some leased circuits, higher for some Ethernet

Malaysia and Indonesia Malaysia consistently higher


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2. Introduction

In 2012, the Asia Pacific Carrier’s Coalition (APCC) commissioned TRPC Pte Ltd to produce a

report benchmarking the price of access circuits across 14 economies in the Asia Pacific region.

The report is an update of a 2009 report which in turn was an update of reports commissioned

in 2006 and 2003 by the APCC from Teligen.

The cost of international circuits has fallen dramatically over the past decade giving a boost to

international telecommunications and to cross-border trade and the commerce that relies upon

it. But local access prices have often not fallen as far nor as fast, and it is often the case today

that they can constitute up to 40% or more of the end-to-end costs of international

communications. As the 2009 report noted, while it is a reasonable assumption that where the

local market is characterized by competition local access prices are likely to be lower, the

determinants of local access prices are far from transparent. Regulatory and ownership issues

can be an influence on prices, and there can be significant differences between list prices and

actual prices after discounts are given for strategic market reasons, or because of bulk buying

or long term contracts.

This report covers 2012 prices across 14 Asia Pacific economies as reported by APCC members,

and provides tables comparing these prices with those reported in 2009, as well as between

economies in 2012. It does not investigate the cause of particular price levels, nor changes in

them, nor possible explanations behind economy comparisons.

The coverage of cities in each economy included (i) primary or major cities and (ii) secondary

named cities or ‘others’. The tables in this report focus upon the major cities for comparison

purposes. A list of secondary cities is included in Table 3.1 below.

Methodology

As with the 2009 report, this report for 2012 does not represent the individual prices offered in

each market but composite prices based upon contributing APCC members. It also follows the

2009 report by using simple averaging (‘median’) of the reported prices, despite some

respondents reporting ‘weighted average prices’ which should better reflect bulk-buy

discounts.1 In 2009 it was found that insufficient data was available to use ‘weighted average

prices’ (where the weights are the number of lines leased at different speeds) and it appeared

1 The median is preferred over the mean as it more readily reflects the range of price levels.


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that using simple average prices (the average of the lowest and highest prices reported for each

category of leased circuit) made little overall practical difference to results. This report follows

the 2009 methodology which also makes more transparent a direct comparison with the 2006

report.

The data generating process is always the most critical link in a chain of statistical analysis. If

the data is not available, or not available in the form required, the statistical outcome is

inevitably limited and possibly compromised. Ideally, statistical analysis requires careful quality

control over where the data is collected, how it is collected and how it is represented for input

into an analytical process. It is the nature of the beast that where commercially sensitive data is

involved from a variety of competing sources that necessitate confidentiality, the data will not

knowingly meet all these requirements. Working within these limitations, this 2012 report is a

fair representation of the data as reported by respondents.

Price Deflators

Price deflators are only a very approximate method of comparing real prices between years.

This is even more the case for the period 2009-2012 which has been dominated by the

international financial crisis, sometimes referred to as ‘The Great Recession’ starting in 2008.

Currency fluctuations and domestic rates of inflation have been influenced by extraordinary

issues, but the bottom line is that international carriers still have to pay in real current dollars.

“Real” price deflators are therefore only used in this report as occasional reality checks. For

example, the nominal prices of simple leased circuits are generally much higher in Indonesia

than in other economies, and after using the price deflator it remains true that Indonesian

prices are generally higher.

The deflator is composed of two elements: the change in the dollar exchange rate and the local

rate of inflation (annual mean average x 3 years). Other things remaining equal, a rise in the

dollar exchange rate (a fall in the dollar value of the local currency) will make 2012 prices

appear lower than in 2009, and vice-versa. Other things remaining equal, a rise in the local rate

of inflation (higher prices in 2009 dollar terms) will make 2012 prices appear higher than in

2009, and vice-versa. The two moving in the same direction together will counteract each

other, whereas the two moving in opposite directions will reinforce each other. To arrive at real

(or constant dollar) 2009-equivalent prices for 2012, the percentage change in the dollar-local

currency exchange rate should be deducted from the percentage change in the local inflation

rate. For ease of reading, in Table 2.1 the currency rates are inverted to show local currency-

dollar exchange rates.


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Table 2.1 summarizes the deflators for each of the 14 economies in the 2012 report. Rates are

measured from 16 January 2009 to 16 January 2013.

Table 2.1

Dollar Value Currency Deflators for each economy

Economy Currency 2009-2012 Inflation 2009-2012 Deflator 2009-2012

Australia -56.9 8.0 48.9

China 8.2 12.5 -20.7

Hong Kong 0 13.5 -13.5

India 12.4 27.7 -40.1

Indonesia 13.2 14.1 -27.3

Japan 2.4 -0.6 -1.8

Malaysia 15.7 9.0 -24.7

New Zealand -55.9 7.7 48.2

Philippines 13.7 -8.7 -5.0

Singapore 17.7 15.4 -33.1

South Korea 23.1 9.9 -33.0

Taiwan 13 3 -16.0

Thailand 14.2 10.6 -24.8

Vietnam -19.9 48.2 -28.3

Rates are measured from 16 January 2009 to 16 January 2013 Sources: http://www.imf.org/external/np/fin/data/param_rms_mth.aspx and http://www.tradingeconomics.com/country-list/inflation-rate

http://www.imf.org/external/np/fin/data/param_rms_mth.aspx

http://www.tradingeconomics.com/country-list/inflation-rate

http://www.tradingeconomics.com/country-list/inflation-rate


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2.1 Scope of Study This 2012 report covers the same 14 economies as in 2009. The objective of the study was to

assess local access prices charged by domestic operators to international carriers in those 14

economies:

Table 2.2

Scope of Study

Economy Number of

Reporting Telcos Economy

Number of Reporting Telcos

Australia 7 New Zealand 4

China 7 Philippines 6

Hong Kong 7 Singapore 7

Indonesia 6 South Korea 7

India 5 Taiwan 7

Japan 7 Thailand 6

Malaysia 7 Vietnam 6

Seven international carriers contributed to the input of price data. All seven carriers reported

prices from eight economies (compared with five economies in 2009). The lowest number

reporting for any economy was four (compared with three in 2009). This indicates a slight

increase in the geographical activities of the seven international carriers over the period.

2.1.1 Leased Lines

Leased line speeds reported by respondents correspond to those of previous reports.

64 kbps 2048 kbps 256 kbps 34 Mbps 512 kbps 45 Mbps 1536 kbps 155 Mbps 1984 kbps Prices for leased circuits include the installation fee and the monthly recurring cost (MRC) or

rental. Installation fees, or one-off access fees, in some cases are waived entirely, in other cases

show considerable variation. Purely for purposes of comparison with the two previous reports,

installation fees are presented divided by 12 for the first year of operation and added to the

MRC.


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Groomed leased circuits are those which multiplex lower speed leased circuits into a single

larger leased circuit. Their use is reported in all 14 economies in 2012 (compared with eight in

2009).

2.1.2 Digital Subscriber Line (DSL)

Symmetric and asymmetric combinations were reported from 11 economies in 2012, excluding

New Zealand, Korea and Taiwan (compared with six economies in 2009 including New Zealand,

Korea and Taiwan).

Australia Indonesia Malaysia Thailand

China India Philippines Vietnam

Hong Kong Japan Singapore

The downlink and uplink speeds reported in 2012 were as follows:

64 kbps 1000 kbps 3072 kbps 1.2 Mbps 15 Mbps 128 kbps 1024 kbps 3200 kbps 1.55 Mbps 45 Mbps 256 kbps 1538 kbps 2500 kbps 4 Mbps 155 Mbps 384 kbps 2000 kbps 4000 kbps 6 Mbps 622 Mbps 512 kbps 2048 kbps 4500 kbps 8 Mbps 640 kbps 2200 kbps 6000 kbps 10 Mbps 768 kbps 2700 kbps 8000 kbps 12 Mbps

2.1.3 Ethernet

All economies were reported as using Ethernet access circuits in 2012, including Vietnam which

was not reported in 2009. The use of Ethernet appears more widespread than in 2009 which in

turn was significantly more widespread than in 2006. Reported speeds, as in 2009, were as

follows:

2 Mbps 50 Mbps 1 Gbps 10 Mbps 100 Mbps 10 Gbps


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2.2 Data Coverage The data used in this report, provided on a confidential basis by seven international carriers, all

members of APCC, is based as we understand it upon the prices they actually paid during 2012

(i.e., wholesale prices), rather than the price lists of the domestic carriers providing the access

circuits.

Table 2.3: Data Available

Leased Circuits DSL Ethernet

2012 2009 2012 2009 2012 2009

Australia Y Y Y Y Y Y

China Y Y Y Y Y Y

Hong Kong Y Y Y Y Y Y

Indonesia Y Y Y N Y Y

India Y Y Y N Y Y

Japan Y Y Y Y Y Y

Malaysia Y Y Y N Y Y

New Zealand Y Y N N Y Y

Philippines Y Y Y N Y Y

Singapore Y Y Y Y Y Y

South Korea Y Y N Y Y Y

Taiwan Y Y Y Y Y Y

Thailand Y Y Y Y Y Y

Vietnam Y Y Y N Y N

3. Leased Line Access

This report covers fourteen economies.

3.1 Coverage

The following speeds were used as the basis of services:

64 kbps 2048 kbps 256 kbps 34 Mbps 512 kbps 45 Mbps 1536 kbps 155 Mbps 1984 kbps The prices in this report refer to leased circuits covering major city areas on the grounds that

these are the most representative of the requirements of international carriers. This

approached was adopted in the 2009 report and the previous 2006 report. This report also

dropped the distinction between 2km and 5km prices. In the 2009 report respondents were


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asked to make this distinction but it proved unnecessary. In some cases leased circuit lengths

for distances up to 1km from the local exchange were priced lower than distances beyond 1km,

and thereafter prices rose according to longer distances, for example below and beyond 6km,

12km, etc. In other cases, the shortest distance covered by the lowest prices extended across

an entire Central Business District (CBD) or city or metropolitan area. In some economies there

are major price differences between circuits leased to cover city areas and national long

distances.

Table 3.1

Major and Secondary Cities

Major Cities Secondary Cities

Australia Sydney, Melbourne Canberra, Adelaide, Brisbane, Perth

China Beijing, Shanghai Guangzhou

India Bangalore, Chennai, Mumbai

Indonesia Jakarta Bandung, Bekasi, Bogor, Denpasar, Depok, Jogjakarta, Malang, Semarang,

Solo, Surabaya, Tangerang

Japan Tokyo, Osaka

Malaysia Kuala Lumpur

New Zealand Auckland Hamilton, Wellington

Philippines Manila, Makati Cavite, Bulacan, Laguna, Batangas, Visayas, Mindanano-Cebu, Davao

South Korea Seoul Dongchun

Taiwan Taipei Taichung, Hsinchu

Thailand Bangkok

Vietnam Hanoi, HCMC


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3.2 Simple and Groomed Circuits

Most leased line circuits are simple point-to-point direct connections between a customer’s

premises and an international carrier’s Point-of-Presence (POP). Diagram A illustrates this

situation where the leased line can be of any commercially-available bitrate.

Diagram 3.2a: Simple Leased Line

In some cases operators offer a service whereby two or more lower-speed leased line circuits

that pass through the same local exchange of a domestic carrier can be multiplexed into a

higher-speed circuit connecting directly to an international carrier’s POP. This saves on the cost

of renting multiple end-to-end simple leased line circuits, but a grooming charge may be levied

by the domestic carrier. Diagram B illustrates this situation, where the combined bitrates of the

leased lines is typically no more than 80% of the bitrate of the larger multiplexed circuit.

Diagram 3.2b: Groomed Leased Lines

Grooming services in 2012 were reported for all 14 economies compared with eight in 2009

(Australia, China, Hong Kong, India, New Zealand, Singapore, Taiwan and Thailand) and five in

2006 (Australia, Hong Kong, New Zealand, Singapore and Taiwan).

Section A

Section A

Section A Competitive

Carrier’s POP

Section B

Local

exchange

connection

Section A

Competitive

Carrier’s POP

End user


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3.3 Simple Leased Lines, 2012 and 2009

This section summarises the data on simple and groomed leased lines, showing the average

Monthly Recurring Charges (MRC) or monthly rental, and the average one-off installation

charges for each of the economies in 2012 and compares these prices with 2009.

3.3.1 Monthly Rental Simple Leased Lines

The following tables show the 2012 results and then comparisons with 2009.

Table 3.3.1a

2km MRC simple line price (USD), major cities, 2012

Australia China Hong Kong

India Indonesia Japan Malaysia

64kbps 287 210 116 865 385 241 256kbps 392 272 147 345 1175 476 512kbps 498 333 187 1390 548

1536kbps 828 442 187 2121 938 1259 1984kbps 835 384 187 146 1816 1417 2048kbps 475 310 192 284 2027 2111 1398 34Mbps 3897 731 6968 45Mbps 3760 2640 1296 1126 5403 2529 6631

155Mbps 8461 5805 2387 2889 14568 3224 14209

New Zealand

Philippines Singapore South Korea

Taiwan Thailand Vietnam

64kbps 619 289 270 124 75 99 256kbps 804 491 397 232 87 235 423 512kbps 868 670 529 342 97 367 685

1536kbps 1250 648 677 503 277 612 1298 1984kbps 1250 500 729 616 394 931 1584 2048kbps 535 1158 628 671 269 925 1464 34Mbps 2409 3714 13965 45Mbps 4989 2944 2630 1155 4538 15988

155Mbps 8945 5164 4573 2212 6491 38327


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Table 3.3.1b

2km MRC simple leased line prices (USD) including installation, major cities 2012



64kbps 415 436 116 949 424 261 256kbps 521 498 147 495 1258 586 512kbps 632 560 187 1473 631

1536kbps 956 637 187 2204 987 1368 1984kbps 992 638 187 193 1899 1526 2048kbps 603 575 192 337 2114 2139 1508 34Mbps 5089 785 7514 45Mbps 4846 3085 1296 1211 5655 2651 7147

155Mbps 10,144 6556 2387 3020 14955 3387 14620

New Zealand



64kbps 668 326 336 142 104 130 256kbps 943 528 472 249 116 270 452 512kbps 1007 714 685 358 126 400 735

1536kbps 1389 707 834 516 334 656 1348 1984kbps 1389 529 885 635 454 969 1613 2048kbps 668 1206 733 690 327 974 1508 34Mbps 2590 3810 14032 45Mbps 5357 3331 2757 1270 4629 16054

155Mbps 9301 5578 4573 2286 6615 38394 Note: Prices are simple averages of monthly rental plus 1/12

th of the installation charge

Table 3.3.1c

Comparison of 2km MRC simple leased line prices (USD) with 2009



2009 2012 2009 2012 2009 2012 2009 2012 2009 2012 2009 2012 2009 2012

64kbps 229 287 259 210 113 116 23 639 865 400 385 517 241

256kbps 405 392 380 272 182 147 171 345 1251 1175 2482 1044 476

512kbps 443 498 565 333 210 187 209 2020 1390 2003 1187 548

1536kbps 545 828 377 442 195 187 2523 2121 1242 938 1863 1259

1984kbps 666 835 611 384 193 187 88 146 3941 1816 1883 2180 1417

2048kbps 475 475 549 310 212 192 247 284 3544 2027 1596 2111 1921 1398

34Mbps 2739 3897 2188 691 731 8344 6968

45Mbps 2856 3760 2967 2640 1468 1296 1752 1126 10421 5403 3392 2529 10583 6631

155Mbps 5687 8461 6046 5805 3018 2387 4814 2889 13500 14568 5750 3224 17924 14209


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New Zealand



2009 2012 2009 2012 2009 2012 2009 2012 2009 2012 2009 2012 2009 2012

64kbps 132 619 289 289 236 270 202 124 101 75 334 99 214

256kbps 535 804 464 491 493 397 288 232 141 87 264 235 406 423

512kbps 712 868 667 670 717 529 481 342 143 87 384 367 593 685

1536kbps 1004 1250 1044 648 1296 677 830 503 377 240 819 612 1127 1298

1984kbps 926 1250 1317 500 1586 729 1200 616 412 251 843 931 566 1584

2048kbps 836 535 1067 1158 520 628 1012 671 383 269 1472 925 1715 1464

34Mbps 5679 2891 2409 4775 3714 14419 13965

45Mbps 4747 4989 2859 2944 3665 2630 1949 1179 5883 4538 18201 15988

155Mbps 8037 8945 6266 5164 8645 4573 3335 2212 10551 6491 38327

Table 3.3.1d

Comparison of 2km MRC simple leased line prices (USD) plus installation charges with 2009



2009 2012 2009 2012 2009 2012 2009 2012 2009 2012 2009 2012 2009 2012

64kbps 368 415 474 436 114 116 23 712 949 459 424 559 261

256kbps 524 521 583 498 185 147 207 495 1332 1258 2560 1147 586

512kbps 548 632 779 560 216 187 319 2164 1473 2072 1290 631

1536kbps 657 956 604 637 200 187 2615 2204 1305 987 1962 1368

1984kbps 774 992 822 638 193 187 88 193 4011 1899 1965 2284 1526

2048kbps 625 603 850 575 215 192 339 337 3747 2114 1659 2139 2027 1508

34Mbps 3506 5089 2677 691 785 8774 7514

45Mbps 3684 4846 3490 3085 1504 1296 2326 1211 11078 5655 3471 2651 11059 7147

155Mbps 7113 10,144 6716 6556 3018 2387 5466 3020 13792 14955 5833 3387 20202 14620


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New Zealand



2009 2012 2009 2012 2009 2012 2009 2012 2009 2012 2009 2012 2009 2012

64kbps 208 668 321 326 265 336 212 142 127 103 353 130 267

256kbps 599 943 497 528 561 472 303 249 181 116 285 270 463 452

512kbps 785 1007 701 714 787 685 496 358 183 116 416 400 650 735

1536kbps 105 1389 1082 707 1370 834 845 516 425 298 853 656 1184 1348

1984kbps 1002 1389 1335 529 1655 885 1216 635 463 309 863 969 624 1613

2048kbps 933 668 1105 1206 606 733 1027 690 434 327 1506 974 1737 1508

34Mbps 5846 3202 2590 4837 3810 14665 14032

45Mbps 4990 5357 3265 3331 3806 2757 2045 1295 5945 4629 18234 16054

155Mbps 8343 9301 6927 5578 8782 4573 3479 2286 10634 6615 38394


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Figure 3.3.1

Note: Simple (mean) average of changes across all speeds of leased lines

Tables 3.3.1 to 3.3.4 and Figure 3.3.1 indicate that

With the exceptions of Australia and New Zealand, there have been falls in average

nominal prices across the board, although some increases in different bitrates. For

example, in India nominal prices fell for 45Mbps and 155Mbps but rose in four lesser

bitrates. In the Philippines, nominal prices fell in two bitrates and rose in four others,

leaving the average overall change approximately zero. In Vietnam, although the average

fell by 4%, nominal prices rose in the four lower bitrates.

Despite an average decrease of 22% in nominal price terms, Indonesia ranks the highest

priced market on six bitrates up to 2048kbps and 3rd and 2nd highest for 45Mbps and

155Mbps. Malaysia on the other hand has come slightly down the list from the previous

reports, being the 2nd highest only once (45Mbps) and 3rd highest four times. Vietnam

takes the 1st slot for 34Mbps, 45Mbps and 155Mbps and 2nd slot three times. Adjusting

for 2009 equivalent dollar-local currency prices brings Indonesian prices down by 27% but

still leaves Indonesia way out in front. Only Vietnam and Malaysia are higher in both

nominal and 2009-equivalent prices at 45Mbps and Vietnam at 155Mbps. In the case of

Vietnam real (2009 equivalent) prices come down by 28% but still not anywhere enough

to change the situation.

Australia and New Zealand are the outlying cases in this set of data showing remarkable

nominal price increases, averages across all bitrates of 38% and 28% respectively.

Converting to real prices simply exaggerates the rises by nearly 50% due to the


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depreciation of their currencies against the US dollar since 2009. Given that the mean

average annual rate of inflation was only around 2.5% in each economy over this period it

is not immediately obvious exactly why the cost of leased circuits has risen by so much in

three years. However it needs to be pointed out that in the case of Australia, if the data

from the highest reporting carrier is removed from the higher speeds (34Mbps, 45Mbps

and 155Mbps – there were three, four and three carriers respectively reporting these

bitrates) the average nominal price increase drops to just 2%. In the case of New Zealand,

only one carrier reported across 5 bitrates and one carrier reported at a single higher

speed, so the data is very thin.

An interesting reversal of trend is the average nominal price fall in India despite price

increases for the lower band leased circuits. A conversion to real (2009 equivalent) prices

reduces prices by a further 40%. The 2009 report recorded prices in India appearing to

rise substantially over 2006 prices, but the trend in 2012 is reversed.

China continued a steady downward trend: 14% in 2009 and 12% in 2012.

Comparing economies, Hong Kong is consistently lower than Singapore, Australia is lower

than New Zealand, Malaysia is higher than Thailand, Japan is higher than S. Korea below

45Mbps and higher for 45Mbps and 155Mbps and Indonesia is consistently higher than

the Philippines.

The havoc wreaked by the international financial crisis after 2010 which badly affected

trade and investment flows has distorted many of the economic indicators, so not too

much weight should be assigned in 2012 to 2009-equivalent “real” prices of leased

circuits. And the fact is that international carriers still have to pay very real dollars at

current prices.


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3.3.2 Monthly Rentals for Leased Lines

Figure 3.3.2a

0 100 200 300 400 500 600 700 800 900 1000

Vietnam

Taiwan

Singapore

New Zealand

Japan

India

China

USD

2km simple circuit monthly rental charges (64kbps)

Figure 3.3.2b


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Figure 3.3.2c

Figure 3.3.2d


21

Figure 3.3.2e

Figure 3.3.2f


22

Figure 3.3.2g

Figure 3.3.2h


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Figure 3.3.2i

3.3.3 Installation charge relative to annual rental

Reported installation charges as a proportion of the first annual leased line rental vary from

25% in the case of Australia and China to zero in the case of Hong Kong. A simple mean average

of this proportion across 14 economies is 8.8% compared with 8.9% in 2009.

The methodology used is the same as 2009 for comparison purposes, namely a simple mean

average of installation charges across the 14 economies for all bitrates. However, a more

weighted approach would be to average the averages per bitrate. Doing this produces rather

more startling figures which are presented separately in the Appendix for possible comparison

in future reports.

From Figures 3.3.3a – 3.3.3j (below) installation charges appear a higher percentage at the

lower bandwidths.


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Figure 3.3.3a Installation Charge relative to annual rental

Figure 3.3.3b


25

Figure 3.3.3c

Figure 3.3.3d


26

Figure 3.3.3e

Figure 3.3.3f


27

Figure 3.3.3g

Figure 3.3.3h


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Figure 3.3.3i

Figure 3.3.3j


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3.3.4 Monthly Rental Groomed Leased Lines

In 2012 data was reported from all 14 economies, compared with eight economies in 2009.

Table 3.3.4a

2km MRC groomed leased line prices (USD), major cities 2012



64kbps 236 262 79 731 348 501 256kbps 840 262 136 1588 2569 1162 512kbps 966 262 272 2057 2705 1629 1536kbps 1027 262 309 2500 1642 2013 1984kbps 889 262 309 146 2555 2370 2048kbps 889 345 309 146 2555 2370 34Mbps 4258 2255 2531 1045 9416 45Mbps 4258 2793 1750 1045 7913 4960 9416 155Mbps 3660 5661 2550 2805 8077 13228

New Zealand



64kbps 290 201 239 235 90 214 110 256kbps 461 386 503 181 793 342 512kbps 548 691 420 520 257 789 146 1536kbps 792 933 722 970 440 390 243 1984kbps 895 757 808 962 384 830 459 2048kbps 809 757 539 962 384 830 459 34Mbps 2777 3506 2411 3599 2889 8418 2209 45Mbps 2777 3506 2411 3599 2173 8418 2209 155Mbps 1270 4562 5307 8946 4104 5654 2209

Table 3.3.4b

2km MRC groomed leased line prices (USD) including installation, major cities 2012



64kbps 236 262 79 731 348 501

256kbps 840 262 136 1588 2569 1162

512kbps 966 262 272 2057 2705 1629

1536kbps 1027 262 309 2500 1642 2013

1984kbps 889 262 309 193 2555 2370

2048kbps 889 649 309 193 2555 2370

34Mbps 4258 2255 2531 1123 9416

45Mbps 4258 3232 1750 1123 7913 4960 9416

155Mbps 3660 6275 2550 2961 8077 13228


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New Zealand

Philippines

Singapore South Korea


64kbps 319 201 258 235 90 214 110

256kbps 490 466 503 181 793 342

512kbps 631 691 460 520 257 789 146

1536kbps 875 933 763 970 440 390 243

1984kbps 978 757 848 962 442 830 459

2048kbps 809 757 612 962 442 830 459

34Mbps 2777 3506 2411 3599 2889 8418 2209

45Mbps 2777 3506 2411 3599 2289 8418 2209

155Mbps 1270 4562 5307 8946 4279 5654 2209

*Prices in red had no installation costs reported, hence are the same as the MRC for leased line prices

Table 3.3.4.1a

Comparison of 2km MRC groomed leased lines prices (USD) with 2009

Australia China Hong Kong India

2009 2012 2009 2012 2009 2012 2009 2012

64kbps 175 236 264 262 95 79 30

256kbps 250 840 420 262 157 136 30

512kbps 315 966 621 262 194 272 30

1536kbps 479 1027 695 262 198 309

1984kbps 550 889 668 262 193 309 30 146

2048kbps 889 367 349 225 309 30 146

34Mbps 4258 2033 2255 2531 1187 1045

45Mbps 4258 2922 3062 1757 1750 1187 1045

155Mbps 3660 5166 5413 2921 2550 3184 2805

New Zealand Singapore Taiwan Thailand

2009 2012 2009 2012 2009 2012 2009 2012

64kbps 305 290 178 239 122 90 112 214

256kbps 536 461 317 386 155 181 256 793

512kbps 625 548 452 420 155 257 400 789

1536kbps 1076 792 837 722 298 440 737 390

1984kbps 1123 895 911 808 298 384 843 830

2048kbps 809 445 539 298 384 874 830

34Mbps 2777 2309 2411 2889 5252 8418

45Mbps 2777 2432 2411 1324 1675 7623 8418

155Mbps 1270 5058 5307 2323 3182 14034 5654


31

Table 3.3.4.1b

Comparison of 2km MRC groomed leased line prices (USD) including installation charges with

2006

Australia China Hong Kong India

2009 2012 2009 2012 2009 2012 2009 2012

64kbps 271 236 494 262 95 79 30

256kbps 346 840 663 262 157 136 30

512kbps 411 966 872 262 194 272 30

1536kbps 575 1027 940 262 198 309

1984kbps 646 889 913 262 193 309 30 193

2048kbps 889 677 653 225 309 30 193

34Mbps 4258 2523 2255 2531 1187 1123

45Mbps 4258 3365 3389 1757 1750 1187 1123

155Mbps 3660 5740 6027 2921 2550 3184 2961

New Zealand Singapore Taiwan Thailand

2009 2012 2009 2012 2009 2012 2009 2012

64kbps 330 319 197 258 151 90 122 214

256kbps 588 490 354 466 184 181 266 793

512kbps 696 631 489 460 184 257 420 789

1536kbps 2028 875 874 763 351 440 757 390

1984kbps 1144 978 948 848 351 442 863 830

2048kbps 809 498 612 351 442 894 830

34Mbps 2777 2595 2411 2889 5289 8418

45Mbps 2777 2815 2411 1430 2289 7660 8418

155Mbps 1270 5529 5307 2481 4279 14108 5654

*Prices in red had no installation costs reported, hence are the same as the MRC for leased line prices


32

Figure 3.3.4

Tables 3.3.4.1a to 3.3.4.1b and Figure 3.3.4 indicate

The price of groomed circuits in Australia showed substantial increases for all

bandwidths, but the data is from only one carrier. Data from two carriers for New

Zealand shows prices fell for all categories. Why the difference between the two when

they mirror each other in their price increases for simple leased circuits is not clear.

For all other economies the results are mixed: Taiwan shows an overall increase of

54% in the mean average of all groomed circuits, and while the increases are lower

using real 2009-equivalent pricing, they remain increases. All other economies show

either no change (Hong Kong and India) or an overall decline with variations according

to bandwidths: China seven up and three down, Hong Kong four up and four down,

India three up and two down, Singapore four up and five down, and Thailand four up

and five down. As with simple leased circuits, China exhibits a notable downward

trend.

3.3.5 Comparing Simple and Groomed Circuits

In 2009 only New Zealand showed a substantial average premium of groomed over simple

leased lines, especially for 64kbps and 1536kbps, and no other economy reached 50%. Figure

3.3.5a shows that in 2012 seven of the 14 economies show premiums of over 50%, with

Thailand apparently charging a premium of nearly 200% for 256kbps, Malaysia over 150% for


33

512kbps and Japan nearly 150% for 155Mbps. There were positive mean average premiums in

eight of the economies with Japan showing the highest. By contrast, there were significant

negatives in China, the Philippines, Singapore and Vietnam.

Figure 3.3.5a

Figure 3.3.5b


34

3.3.6 Price range analysis

The following graphs show ranges (minimum and maximum) of prices below and above the

average price for leased lines at different bitrates offered in each economy as reported in 2012.

Average prices are indicated by the 100% line. Prices below that line show the percentage of

the lowest price to the average price, and prices above that line show the percentage of the

highest price to the average price.

The range of prices above the simple average is greater than the range of prices below in all

cases except 35Mps and 45Mbps and in both these cases it is Vietnam that has reduced prices

more than the others have raised them. Overall, as in 2009, this seems to imply a weighting in

favour of prices lower than the average, maybe a reflection of discounts and/or of bulk buying

by some international carriers. However, the ranges are decisively lower than reported in 2009

which suggests the weighting in favour of lower prices is weaker than in 2009.

Table 3.3.6

Upper Price Range percentage differences over average prices, 2012 and 2009

Bitrates 2012 2009 Bitrates 2012 2009

64 kbps >200% >400% 2048 kbps >350% >1100%

256 kbps >250% >800% 45 Mbps >180% >300%

Figure 3.3.6a


35

Figure 3.3.6b

Figure 3.3.6c


36

Figure 3.3.6d

Figure 3.36e


37

Figure 3.3.6f

Figure 3.3.6g


38

Figure 3.3.6h

Figure 3.3.6i


39

4. Ethernet Access In 2012 data was available from all 14 economies, including Vietnam for which there was no data in 2009. The bitrates reported in 2012 were the same as in the 2009 report. Below 1Gbps the only economy that did not report usage of all bitrates was Indonesia for 54Mbps. Only 5 economies were reported as using 10Gbps.

2 Mbps 100 Mbps 10 Mbps 1 Gbps 50 Mbps 10 Gbps

4.1 Coverage

Data was reported from all 14 economies

4.2 Point-to-Point (P2P) Ethernet

P2P Ethernet connections are dedicated circuits (uncontended) but may vary according to the

technical facilities supplied by domestic operators. As in 2009 and 2006, only price information

was reported in 2012. Point-to-multipoint (PMP) information was separately identified and is

shown in section 4.3 below.

Figure 4.2a

2Mbps Ethernet P2P monthly rentals and installation charges, 2009 and 2012

2009 2012

2Mbps Installation 2Km >2Km Installation 2Km >2Km

Australia 1412.0 602.0 631.0 2397.8 698.7 474.7

China 3060.0 676.0 2540.3 304.8 762.0

Hong Kong 52.0 322.0 0 288.8 0

India 756.0 9750.9 74.8 3517.0

Indonesia 1138.0 1000.0 1111.0 850.0 0

Japan 593.0 1434.0 847.5 697.0 0

Malaysia 3200.0 1364.0 1026.6 965.3 0

New Zealand 356.0 284.0 0 482.0 568.0

Philippines 350.0 500.0 4333.3 1429.3 327.0

Singapore 1852.0 692.0 1283.1 511.6 0

South Korea 159.0 1647.0 300.0 574.0 937.0

Taiwan 399.0 230.0 0 201.9 115.9

Thailand 229.0 828.0 313.1 590.3 0

Vietnam 300.0 2746.0 0


40

Figure 4.2b


2009 2012


Australia 3954 999 1207 2486 967 948

China 3048 1170 3339 1044 2476

Hong Kong 89 661 0 553 0

India 9881 341 8571

Indonesia 2222 1111 1924 0

Japan 774 1800 1314 859 0

Malaysia 1910 4204 2790 3318 0

New Zealand 928 1614 633 490 758

Philippines 3050 1978 4333 2020 327

Singapore 2971 2082 1878 1334 0

South Korea 879 2035 1646 1000 988 2163

Taiwan 438 798 690 693 449

Thailand 297 1902 626 1148 0

Vietnam 300 9915 0

Figure 4.2c


2009 2012


Australia 4501.0 1574.0 2285.0 2889.6 2216.9 1870.0

China 5548.0 3071.0 6756.7 2914.5 8384.0

Hong Kong 0.0 1385.0 0 875.7 0

India 8593.8 1324.3 21936.5

Indonesia 4444.0 0 0 0

Japan 663.0 2758.0 978.5 1474.5 0

Malaysia 3520.0 8457.0 2593.2 4205.8 0

New Zealand 0 520.0 1350.0

Philippines 500.0 500.0 4333.3 4933.3 218.0

Singapore 2702.0 3705.0 2153.9 2039.4 0

South Korea 1473.0 4829.0 1843.0 2000.0 2429.3 4828.0

Taiwan 977.0 1458.0 1380.0 1686.0 1206.9

Thailand 448.0 1070.8 3004.0 0

Vietnam 800.0 24281.0 0


41

Figure 4.2d


2009 2012


Australia 4406.0 2107.0 3046.0 2397.8 2164.6 2230.0

China 5756.0 4349.0 6756.7 4549.8 14719.0

Hong Kong 204.0 1085.0 0 966.7 0

India 726.0 303.0 12439.7 989.5 293557.5

Indonesia 7777.0 1111.0 5377.0 0

Japan 762.0 3513.0 1328.2 2017.4 0

Malaysia 4587.0 11711.0 3733.3 5926.4 0

New Zealand 983.0 633.0 560.0 1903.0

Philippines 3750.0 4947.0 4333.3 5993.3 436.0

Singapore 4031.0 5153.0 2153.9 3113.9 0

South Korea 1766.0 6099.0 5115.0 3000.0 3906.0 7765.5

Taiwan 953.0 2138.0 1380.0 2024.5 1761.5

Thailand 448.0 7653.0 1070.8 3709.6 0

Vietnam 800.0 38782.0 0

Figure 4.2e

1Gbps Ethernet P2P monthly rentals and installation charges, 2009 and 2012

2009 2012

1Gbps Installation 2Km >2Km Installation 2Km >2Km

Australia 8152.0 6203.0 6807.0 7543.6 5412.6 5768.5

China 3971.0 24368.0 12857.3 20503.7 71465.0

Hong Kong 0 1867.0 0 1646.9 0

India 26834.1 5672.0 59811.0

Indonesia 0 0 0

Japan 576.0 5616.0 413.0 3800.0 0

Malaysia 6526.0 38937.0 5379.8 14745.6 0

New Zealand 758.0 1407.0 8078.0

Philippines 3750.0 16775.0 4500.0 15732.7 3379.0

Singapore 5508.0 6414.0 2795.6 5273.5 0

South Korea 2194.0 9968.0 11668.0 0 2860.0 0

Taiwan 1970.0 13699.0 0 5984.4 7563.8

Thailand 973.0 31283.0 0 0 0

Vietnam 0 0 0


42

Figure 4.2f

10Gbps Ethernet P2P monthly rentals and installation charges, 2009 and 2012

2009 2012

10Gbps Installation 2Km >2Km Installation 2Km >2Km

Australia 16900 7907 7907

China

Hong Kong 0 7420 0

India 3766 39288 78576

Indonesia 0 0 0

Japan 2337 13402 413.00 11,000 0

Malaysia 0 0 0

New Zealand 1103 0 0

Philippines 0 0 0

Singapore 4845 23570 8,147 8,147 0

South Korea 0 0 0

Taiwan 0 0 0

Thailand 0 0 0

Vietnam 0 0 0

Vietnam is the outstanding example of reported high prices in the five tables above, so far

above all the others as to be considered an outlier. Of the others, below 1Gbps the Philippines

is the highest in three categories and second highest in the 4th (10Mbps), followed by Malaysia

in three categories and highest in 10Mbps. Some excessively high installation prices are

reported, notably for India. The good news is that the overall rental trend is downwards,

steadily so for 10Mbps, 100Mbps (two exceptions), and 1Gbps and 10Gbps.

Comparisons show that Hong Kong remains consistently and significantly lower than Singapore;

Japan is higher than South Korea for 2Mbps and 10Mbps, lower for 50Mbps and 100Mbps, and

higher for 1Gbps; Malaysia is consistently higher than Thailand up to 100Mbps; Philippines is

always ahead of Indonesia which tends to fall marginally below Malaysia.

Figure 4.2 shows 2012 installation charges for P2P Ethernet connections across the range of

bitrates. Installation charges generally increase according to bitrate, with some significant rises

for 1Gbps, e.g. China, but also some notable falls, e.g. Japan. Interpretation however is difficult

without knowing in detail the nature of the contract.


43

Figure 4.2

Note: 1. Prices are simple averages across the available data, in USD; 2. Installation is distributed over 12 months

4.3 Point-to-Multipoint (PMP) Ethernet

Data for uncontended PMP Ethernet connections in 2012 was available for 13 economies (not

Indonesia) compared with only eight in 2009. In 2012 data for contended PMP Ethernet

connections was reported only from India, compared with five economies in 2009. Reported

prices for Malaysia and Thailand stand out as much higher for rentals for 2km contended

Ethernet connections coming 1st and 2nd for all bitrates, followed by the Philippines. The

Philippines is reported as having a flat rate installation charge of USD5,000 per month which

puts it at the top of the table below 100Mbps, after which Malaysia overtakes.

For comparison, Hong Kong is consistently and significantly below Singapore, Japan is marginally cheaper than Korea below 1Gbps, and Malaysia is way higher than Thailand.


44

Table 4.3a PMP Uncontended

Australia China Hong Kong India Japan

Install 2Km >2Km Install 2Km >2Km Install 2Km >2Km Install 2Km >2Km Install 2Km >2Km

2Mbps 1,851 705 705 3,500 342

162 178 1,410 80 80 549 533 788

10Mbps 2,228 1,057 1,057 3,500 1,142

335 387 1,410 215 215 1,090 1,125 1,633

50Mbps 2,008 2,070 2,070 6,350 2,806

736 775 1,410 868 868 525 1,511 2,567

100Mbps 3,080 2,185 2,185 12,700 3,915

825 889 1,410 1,515 1,515 1,238 2,265 3,531

1Gbps 6,503 2,228 2,228 19,050 25,320

1,404 1,530 1,410 9,822 9,822 2,049 9,819 13,367

10Gbps 16,900 7,907 7,907

3,766 78,576 78,576

Malaysia New Zealand Philippines Singapore

Install 2Km >2Km Install 2Km >2Km Install 2Km >2Km Install 2Km >2Km

2Mbps 777 680 610 5,000 560 2,000 1,511 533

10Mbps 2,217 6,184 847 666 889 5,000 1,900 3,000 2,702 971

50Mbps 4,737 10,086 972 928 1,763 5,000 3,600 5,200 3,153 1,610

100Mbps 6,316 11,414 972 1,114 2,578 5,000 4,600 6,500 2,898 3,073

1Gbps 12,632 76,648 1,720 2,072 11,390 5,000 6,400 8,300 3,056 4,929

10Gbps

South Korea Taiwan Thailand Vietnam

Install 2Km >2Km Install 2Km >2Km Install 2Km >2Km Install 2Km >2Km 2Mbps

222 770 770 629 327 327 494 887 210 345 222 10Mbps

715 1,428 1,328 1,075 740 740 494 2,073 210 833 922 50Mbps

1,346 2,919 2,434 2,084 1,580 1,580 987 5,167 560 1,958 1,444 100Mbps

1,751 2,747 1,368 2,088 2,468 2,468 987 7,176 560 2,543 2,569 1Gbps

1,829 7,661 7,069 3,403 4,901 4,901 1,645 30,441 1,050 17,648 16,584 10Gbps


45

Table 4.3b PMP Contended

India

Install 2Km >2Km

2Mbps 1,410 80 80

10Mbps 1,410 215 215

50Mbps 1,410 868 868

100Mbps 1,410 1,515 1,515

1Gbps 1,410 9,822 9,822

10Gbps 3,766 78,576 78,576


46

5. Digital Subscriber Line (DSL)

Price information was reported for the leasing of symmetrical DSL from 11 economies compared with six in 2009, and for asymmetric DSL from six economies compared with eight in 2009.

5.1 Symmetric/Asymmetric DSL Tables 5.1a and 5.1b provide data on monthly rental prices and installation costs. Almost all the data comes from just two economies, Australia and China, with Australia notably higher in rental charges and notably lower in installation charges than China. For 1000kbps symmetric, Indonesia is three times higher priced than Australia, and Singapore slightly under Australian prices. Hong Kong prices are by far the lowest. Prices in the remaining economies are all moderately low in comparison.

Table 5.1a DSL Symmetric

Downlink/ Uplink (Kbps)

Malaysia Philippines Singapore Thailand Vietnam

Rent Installation Rent

Installation Rent

Installation Rent

Installation Rent

Installation

512/512 369 595 370 200

640/640

768/768

1000/1000 200 600 120 100 465 595 200 200

1024/1024

1538/1538 481 650

2000/2000 540 540


47

Downlink/Uplink (Kbps)

Australia China Hong Kong India Indonesia Japan

Rent Installation Rent

Installation Rent

Installation Rent

Installation Rent

Installation Rent

Installation

64/64 950 504 233 2275 31

128/128 501 336 248 2275 256/256 507 336 262 2275

384/384 74 120

512/512 387 451 299 2300

640/640 517 336 254 2200

768/768 950 551 313 2275

1000/1000 555 617 254 2200 1600 1200

1024/1024 565 551 333 2275 171 257

1538/1538 390 451 348 2275

2000/2000 473 451 362 2653

2048/2048 419 551 246 2466 57 1080 2500

2200/2200 605 336 254

2700/2700 950 551

3072/3072 623 617

3200/3200 950 551

3500/3500 950 551

4000/4000 705 617 1111 1587

4500/4500 2286 6250

6000/6000 950 551

8000/8000 950 551

1.2Mbps/1.2Mbps 950 551

1.55Mpbs/1.55Mbps 5029 10000

45Mbps/45Mbps 2571 9524

155Mbps/155Mbps 5587 9524

622Mbps/622Mbps 16008 9524

4M/4M 133

6M/6M 164

8M/8M 215

10M/10M 231


48

Figure 5.1b DSL Asymmetric

Downlink/ Uplink (Kbps)

Australia China Hong Kong Japan Singapore Taiwan

Rent Installation

Rent Installation

Rent Installation

Rent Installation

Rent Installation

Rent Installation

256/64 40 120

512/128 58 401

2048/384 90 120

128/512 172 750

2048/512 407 223

4000/1024 80 80

128/256 90 150

256/512 108 150

512/1024 120 150

768/2048 130 150

768/4000 190 150

768/6000 250 150

2000/2200 522 650

8000/1000 107 195

1538/640 51 77

4000/512 117 682

6000/640 130 682

8000/640 138 682

12Mbps/640 148 682


49

5.2 DSL installation charges

As with the case of simple leased circuits, installation prices as a proportion of annual rental

costs as shown in Tables 5.2a and 5.2b have risen over those of 2009 when for symmetric they

did not exceed 17% and for asymmetric 0.6%. In 2012, for symmetric in the case of Malaysia

they reach 25% and exceed 10% in five cases. For asymmetric in 2012 they are close to 40% in

Australia.

Figure 5.2a Installation charges as a percentage of annual rental (symmetric)


50

Figure 5.2b Installation charges as percentage of annual rental (asymmetric)


51

6. Leased Circuits vs. Ethernet Following the 2012 report, Figures 6.1a and 6.1b compare leased line prices with Ethernet

access prices, noting (as in the 2009 report) that although they are not necessarily substitutes

many companies may be considering moving over to all-IP platforms in the future.

Figure 6.1a 2 Mbps Leased Line vs. 2Mbps Ethernet


52

Figure 6.1b

155 Mbps Leased line vs. 100 Mbps Ethernet

In 2012 2Mbps leased line prices appear to higher in most economies, except Australia, Hong

Kong, the Philippines and Vietnam. In Vietnam, the outlier, they are half the price. By contrast

in Indonesia and Japan leased line prices are over twice Ethernet prices. Leased line prices for

155Mbps are consistently higher than Ethernet prices or, in the case of Vietnam, almost on a

par. Therefore, besides some apparent correlation between price differentials and bitrates

there seems to be no other discernible relationship between them. Roughly the same pattern

of price differentials held true in 2009, but in 2012 overall prices were very slightly lower.


53

7. Conclusion

Compared with the 2009 report, the data reported in 2012 indicates that despite overall price

falls, Indonesia and Malaysia have been joined by Vietnam as showing consistently higher prices

across most categories of leased circuits, and by the Philippines for Ethernet prices. An

interesting downwards trend in prices takes place in India and continues in China. Installation

costs seem to have come down in proportion to annual rentals as the average across all

economies is 8.8% in 2012 compared with 8.9% in 2009. However, see Appendix Table 8 for an

alternative method of estimation.

Although by no means the highest priced economies, the data taken at face value for Australia

and New Zealand shows remarkable price increases over 2009 of 38% and 28% respectively.

Using the 2009-equivalent price deflator actually increases the price levels. However it needs to

be pointed out that in the case of Australia, if the data from the highest reporting carrier is

removed from the higher speeds (34Mbps, 45Mbps and 155Mbps – there were 3, 4 and 3

carriers respectively reporting these bitrates) the average nominal price increase drops to just

2%. In the case of New Zealand, only one carrier reported across 5 bitrates and one carrier

reported at a single higher speed, so the data is very thin.

Table 7 compares economies that are often benchmarked against each other

Comparing economies: Table 7

Australia and New Zealand Australia lower for leased circuits but higher for Ethernet

Hong Kong and Singapore Hong Kong consistently lower

Indonesia and Philippines Indonesia higher for leased circuits but lower for Ethernet

Japan and South Korea Japan lower for some leased circuits, higher for some Ethernet

Malaysia and Thailand Malaysia consistently higher

Leased Lines

Indonesia and Malaysia, the highest priced markets for leased circuits in 2009 and in 2006,

have been joined in 2012 by Vietnam. Deflating nominal prices into 2009-equivalent “real”

prices does not change their ordinal standing.

Despite some individual price increases for various bitrates (for example, prices in India rose

for the lower bitrates and in the Philippines they rose for 4 separate bitrates) overall prices

have fallen as shown in Figure 3.3.1. For example, Indonesian prices have fallen on average

by 22%.


54

An interesting reversal of trend is the average nominal price fall in India despite price

increases for the lower band leased circuits. A conversion to real (2009 equivalent) prices

reduces prices by a further 40%. The 2009 report recorded prices in India appearing to rise

substantially over 2006 prices, but the trend in 2012 is reversed.

China continued a steady downward trend; 14% overall price reduction in 2009 and 12% in

2012.

Interpretation of Figure 3.3.6a suggests there may have been weaker weighting in favour of

lower prices than in 2009, or in other words, possibly fewer lower-priced circuits in use or

fewer discounts for bulk leasing on those circuits.

For groomed circuits, in 2012 of the 14 economies, seven showed price premiums of over

50% for simple leased circuits, compared with one economy (New Zealand) in 2009.

Altogether there were eight economies showing positive mean average premiums (Japan the

highest) but significant price discounts in China, the Philippines, Singapore and Vietnam.

Reported installation charges as a proportion of the first annual leased line rental are very

similar to 2009, averaging 8.8% of the annual rental charge compared with 8.9% in 2009.

However, see Appendix Table 8 for an alternative method of calculating the percentage.

Table 7a: Comparing economies Simple Leased Circuits

Australia New Zealand Australian prices are consistently lower

Hong Kong Singapore Hong Kong prices are consistently lower

Indonesia Philippines Indonesian prices are consistently higher

Japan South Korea Japanese prices under 45Mbps are lower, then higher

Malaysia Thailand Malaysian prices are consistently higher

Ethernet

Vietnamese prices are so far above all others as to make it an outlier. Of the others, the

Philippines is by far the overall highest, followed Malaysia, but Malaysian prices are down by

quite large margins from 2009 levels. By contrast prices reported in the Philippines are

substantially above 2009 levels except for 1Gbps. Overall, 2012 prices are down, in some


55

cases substantially down, from 2009 levels. For example, in South Korea the reported price

for 2Mbps is down from US$1,674 to US$574.

Some excessively high installation prices are reported, notably for India. Overall, there are

27 recorded cases of installation charges increasing and 21 cases decreasing, a rather mixed

picture. They generally increase according to bitrate, with some significant rises for 1Gbps,

e.g. China, but also some notable falls, e.g. Japan. Interpretation however is difficult without

knowing in detail the nature of the contract.

Table 7b: Comparing economies for Ethernet P2P

Australia New Zealand Australian prices are consistently higher


Indonesia Philippines Indonesian prices are consistently lower

Japan South Korea Japanese prices higher for 2Mbps, 10Mbps, 1Gbps and lower for 50Mbps and 100Mbps

Malaysia Thailand Malaysian prices are higher up to 100Mbps

Data for uncontended PMP Ethernet connections in 2012 shows prices for Malaysia and

Thailand as much higher for rentals for 2km uncontended Ethernet connections coming 1st

and 2nd for all bitrates, followed by the Philippines. The Philippines is reported as having a

flat rate installation charge of USD5,000 per month which puts it at the top of the table

below 100Mbps, after which Malaysia overtakes.

Table 7c: Comparing economies for Uncontended PMP

Australia New Zealand Australian prices are consistently higher


Japan South Korea Japanese prices marginally lower below 1Gbps

Malaysia Thailand Malaysian prices consistently higher


56

Digital Subscriber Line (DSL)

Almost all the data (Tables 5.1a and 5.1b) comes from two economies, Australia and China,

with Australia notably higher in rental charges and notably lower in installation charges than

China. For 1000kbps symmetric Indonesia is three times higher priced than Australia and

Singapore slightly under Australian prices. Hong Kong prices are by far the lowest. Prices in

the remaining economies are all moderately low in comparison.

As with the case of simple leased circuits, installation prices as a proportion of annual rental

costs as shown in Tables 5.2a and 5.2b have risen over those of 2009 when for symmetric

they did not exceed 17% and for asymmetric 0.6%. In 2012 for symmetric in the case of

Malaysia they reach 25% and exceed 10% in five cases. For asymmetric in 2012 they are

close to 40% in Australia.

Leased Circuits vs. Ethernet In 2012 2Mbps leased line prices appear to higher in most economies, except Australia, Hong

Kong, the Philippines and Vietnam. In Vietnam, the outlier, they are half the price. By

contrast in Indonesia and Japan leased line prices are over twice Ethernet prices. Leased line

prices for 155Mbps are consistently higher than Ethernet prices or, in the case of Vietnam,

almost on a par. Therefore, besides some apparent correlation between price differentials

and bitrates there seems to be no other discernible relationship between them.


57

Appendix

A more weighted approach to estimating the average proportion of installation charges to first year leased line rentals is to average per bitrate and then take the mean average of these averages. Figure 8 shows the results. In the case of China the percentage rises to 61% and generally installation charges rise as an overall proportion of annual rentals to 14.8% compared with 8.8% using the methodology of 2009.

Figure 8

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