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AP WAN services market to exceed US$13 billion mark

Jack Loo | May 21, 2010
Data centre consolidation and regional branch expansions helped push market growth during recession

SINGAPORE, 21 MAY 2010 - The Asia Pacific wide area network (WAN) services market is forecast to hit nearly US$13.3 billion in revenues by the end of the year, rising 10 per cent over 2009 billings of US$12 billion.

The market managed to grow a modest 6.2 per cent last year in spite of one of the worst recessions. The growth was a result of a combination of cross-regional branch expansions and data centre consolidation, according to Frost & Sullivan research manager Arun Chandrasekaran.

He estimated the per annum growth for WAN services to hover around the 10 per cent mark till 2013 before dipping slightly with ethernet and Internet protocol virtual private network (IP VPN) expected to see huge gains during this time.

The convergence of voice, video and data is prompting rising demand for MPLS IP VPN [multi-protocol label switching IP VPN] services given its scalability, low TCO [total cost of ownership] and ease in multiple site connectivity, Chandrasekaran said. While ethernet is proving to be the preferred technology for high speeds and connectivity between limited sites such as data centre to data centre.

The migration from legacy services to IP and ethernet services continued at breakneck speed in the past 12 months due to the weak economic climate, he said. Enterprises faced with unviable telecom OPEX [operational expenditure] switched to MPLS and ethernet to reduce cost and simplify management, he explained.

Many carriers have in fact decommissioned their circuits for legacy technologies such as frame relay [FR] and ATM [asynchronous transfer mode] due to the lack of demand, he added. By 2016, the demand for FR and ATM is expected to ebb considerably, each serving less than one per cent of the domestic and international WAN routes.

 

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