Asian carriers see huge growth, but not in subsea

Asia carriers saw growth from 30% upwards as the pandemic hit their markets in early 2020.

This was the uniform finding from senior executives at Airtel Business, Colt Technology Services and HGC Global Communications, speaking at this week’s Capacity Asia conference.

But growth in subsea markets is much slower than growth in networks in individual countries, connecting data centres and enterprises.

Praveen Agarwal of Airtel Business told the virtual event that the company saw a 30% growth in its 4G subscriber base when the pandemic started.

Masato Hoshino of Colt said that both voice and IP traffic “had a fairly significant increase” with IP traffic showing “a 30% increase”.

Ravindran Mahalingam, SVP, International of HGC said HGC “lost revenue in mobile roaming” but saw a leap in application to person (A2P) traffic. “It just about doubled. All in all it’s good for the telco industry.”

Colt was able to cope with the increase in IP traffic without problem, said Hoshino, but “on the voice side we had to do some capacity augmentations”.

On common routes Hong Kong-based HGC saw internet traffic go up 40-50% but the company noted price erosion. However, on what Mahalingam called “non-traditional routes” the bandwidth increased at a much faster rate, “up to double”.

Colt had already launched its IP access on-demand service, so customers were able to increase bandwidth “on the fly”, said Hoshino.

“We are fairly conservative in the way we do our capacity management in our core. We did not have any supply chain issues: we had the foresight to stock up on a significant amount of kit,” he said.

Change in certain behaviour patterns

The way traffic is handled has changed, said Airtel’s Agarwal. “Everyone was sitting at home, either working or passing the time.” Streaming companies serving the India market have ensured they cache content locally, he said. “But content providers are looking for large capacity to connect their international hubs.”

But he noticed a change in “certain behaviour patterns” by people working from home: they consumed “much more adult content”, he noted. Neither Mahalingam nor Hoshino — nor David Abt of Delta Partners, chairing the session — commented on this observation.

There is a shift from fixed-line to IP connections, said Hoshino of Colt, particular with the greater use of software defined wide area networks (SD WANs). “They give more flexibility in the way enterprises use their network.”

Colt has its own fibre assets “in 52 metros”, he said. “We continue to invest in fibre and we’re more focusing on densifying the fibre count into data centres. We are enhancing our SD WAN capability and our services by enhancing our digital experience.”

Hong Kong already has a high fibre rate, said Mahalingam, with more than 70% of buildings connected. “By default, it’s there.” But Hong Kong is exceptional in south-east Asia. “The demand for fiberisation is high,” he said. “Companies are looking for a higher fibre rollout to buildings.” It is in HGC’s interest to satisfy that, he added.

Hong Kong has launched 5G, and HGC is connecting cell sites for operators, he said. “Success [of 5G] depends on fibre coverage. We have a position as a neutral service provider.”

This is what will take priority for HGC over the next few years, he added. “The subsea market is growing at 5-6% across the region.” But fibre networks in-country “are in double-digit growth”, he said. “The drivers of business today for subsea are OTTs [over-the-top providers]. Hyperscales don’t need carriers to sort them out.”