Access Price Benchmarking for APCC

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Access Price Benchmarking for APCC 2013

Access Price Benchmarking

A Study Produced for the

Asia Pacific Carriers’ Coalition

(APCC)

By

TRPC Pte Ltd

February 2013

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Access Price Benchmarking for APCC 2013

Table of Contents

Page

1.

Executive Summary 3

2.

Introduction

2.1 Scope of Study

2.2 Data coverage

3.

Leased Lines Access

3.1 Coverage

5

8

10

10

10

3.2 Simple and Groomed Circuits

3.3 Simple Leased Lines

4. Ethernet Access

4.1 Coverage

4.2 Point-to-point (P2P) Ethernet

4.3 Point-to-multipoint (PMP) Ethernet

5. Digital Subscriber Line (DSL)

5.1 Symmetric/Asymmetric

5.2 DSL Installation charges

6. Leased Circuits vs. Ethernet Access

7. Conclusion

8. Appendix

12

13

39

39

39

43

46

46

49

51

53

57

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Access Price Benchmarking for APCC 2013

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

China

Hong Kong

Indonesia

India

Japan

Malaysia

New Zealand

Philippines

Singapore

South Korea

Taiwan

Thailand

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 lowerpriced (and therefore lower bitrate) circuits has lessened since 2009. See Table 3.3.6a.

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Access Price Benchmarking for APCC 2013

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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Access Price Benchmarking for APCC 2013

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.

5

Access Price Benchmarking for APCC 2013 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 currencydollar exchange rates.

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Access Price Benchmarking for APCC 2013

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

Economy

Dollar Value Currency Deflators for each economy

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

Australia

China

Hong Kong

India

Indonesia

Japan

Malaysia

-56.9

8.2

0

12.4

13.2

2.4

15.7

8.0

12.5

13.5

27.7

14.1

-0.6

9.0

48.9

-20.7

-13.5

-40.1

-27.3

-1.8

-24.7

New Zealand

Philippines

Singapore

South Korea

Taiwan

Thailand

Vietnam

-55.9

13.7

17.7

23.1

13

14.2

-19.9

7.7

-8.7

15.4

9.9

3

10.6

48.2

48.2

-5.0

-33.1

-33.0

-16.0

-24.8

-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/countrylist/inflation-rate

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Access Price Benchmarking for APCC 2013

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:

Economy

Table 2.2

Scope of Study

Number of

Reporting Telcos

Economy

Number of

Reporting Telcos

Australia

China

Hong Kong

Indonesia

India

Japan

7

7

7

6

5

7

New Zealand

Philippines

Singapore

South Korea

Taiwan

Thailand

4

6

7

7

7

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

256 kbps

512 kbps

2048 kbps

34 Mbps

45 Mbps

1536 kbps

1984 kbps

155 Mbps

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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Access Price Benchmarking for APCC 2013

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

China

Hong Kong

Indonesia

India

Japan

Malaysia

Philippines

Singapore

Thailand

Vietnam

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

64 kbps

128 kbps

256 kbps

384 kbps

512 kbps

640 kbps

768 kbps

2.1.3 Ethernet

1000 kbps

1024 kbps

1538 kbps

2000 kbps

2048 kbps

2200 kbps

2700 kbps

3072 kbps

3200 kbps

2500 kbps

4000 kbps

4500 kbps

6000 kbps

8000 kbps

1.2 Mbps

1.55 Mbps

4 Mbps

6 Mbps

8 Mbps

10 Mbps

12 Mbps

15 Mbps

45 Mbps

155 Mbps

622 Mbps

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

10 Mbps

50 Mbps

100 Mbps

1 Gbps

10 Gbps

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Access Price Benchmarking for APCC 2013

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

Australia

China

Hong Kong

Indonesia

India

Japan

Malaysia

New Zealand

Philippines

Singapore

South Korea

Taiwan

Thailand

Vietnam

Y

Y

Y

Y

Y

Y

Y

Y

Y

Leased Circuits

2012

Y

2009

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

2012

Y

Y

Y

Y

Y

Y

Y

N

Y

Y

N

Y

Y

Y

DSL

2009

Y

Y

Y

N

N

Y

N

N

N

Y

Y

Y

Y

N

Y

Y

Y

Y

Y

Y

Y

Y

Y

2012

Y

Ethernet

2009

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

Y

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

256 kbps

512 kbps

1536 kbps

1984 kbps

2048 kbps

34 Mbps

45 Mbps

155 Mbps

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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Access Price Benchmarking for APCC 2013 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

Australia

China

India

Indonesia

Japan

Malaysia

New Zealand

Philippines

South Korea

Taiwan

Thailand

Vietnam

Major Cities

Sydney, Melbourne

Beijing, Shanghai

Bangalore, Chennai, Mumbai

Jakarta

Tokyo, Osaka

Kuala Lumpur

Auckland

Manila, Makati

Seoul

Taipei

Bangkok

Hanoi, HCMC

Secondary Cities

Canberra, Adelaide, Brisbane, Perth

Guangzhou

Bandung, Bekasi, Bogor, Denpasar,

Depok, Jogjakarta, Malang, Semarang,

Solo, Surabaya, Tangerang

Hamilton, Wellington

Cavite, Bulacan, Laguna, Batangas,

Visayas, Mindanano-Cebu, Davao

Dongchun

Taichung, Hsinchu

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Access Price Benchmarking for APCC 2013

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

Section A

Competitive

Carrier’s POP

End user

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

Section A

Section B Section A

Competitive

Carrier’s POP Local exchange

Section A connection

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).

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Access Price Benchmarking for APCC 2013

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

64kbps

256kbps

512kbps

1536kbps

1984kbps

2048kbps

34Mbps

45Mbps

155Mbps

Australia

287

392

498

828

835

475

3897

3760

8461

New

Zealand

China Hong

Kong

India

210

272

333

442

384

310

2640

5805

116

147

187

187

187

192

1296

2387

Philippines Singapore South

Korea

345

146

284

731

1126

2889

Indonesia Japan Malaysia

865

1175

1390

2121

1816

2027

5403

14568

385

938

2111

2529

3224

241

476

548

1259

1417

1398

6968

6631

14209

Taiwan Thailand Vietnam

64kbps

256kbps

512kbps

1536kbps

1984kbps

2048kbps

34Mbps

45Mbps

155Mbps

619

804

868

1250

1250

535

289

491

670

648

500

1158

4989

8945

270

397

529

677

729

628

2409

2944

5164

124

232

342

503

616

671

2630

4573

75

87

97

277

394

269

1155

2212

99

235

367

612

931

925

3714

4538

6491

423

685

1298

1584

1464

13965

15988

38327

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Access Price Benchmarking for APCC 2013

Table 3.3.1b

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

Australia China Hong

Kong

India Indonesia Japan

64kbps

256kbps

512kbps

1536kbps

1984kbps

2048kbps

34Mbps

415

521

632

956

992

603

5089

45Mbps 4846

155Mbps 10,144

New

Zealand

436

498

560

637

638

575

116

147

187

187

187

192

495

193

337

785

3085

6556

1296

2387

1211

3020

Philippines Singapore South

Korea

Malaysia

949

1258

1473

2204

1899

2114

424

987

2139

261

586

631

1368

1526

1508

7514

5655

14955

2651

3387

7147

14620

Taiwan Thailand Vietnam

64kbps

256kbps

512kbps

1536kbps

668

943

1007

1389

326

528

714

707

336

472

685

834

142

249

358

516

104

116

126

334

1984kbps

2048kbps

34Mbps

45Mbps

1389

668

529

1206

5357

885

733

2590

3331

635

690

2757

454

327

1270

155Mbps 9301 5578 4573 2286

Note: Prices are simple averages of monthly rental plus 1/12 th

of the installation charge

130

270

400

656

969

974

3810

4629

6615

452

735

1348

1613

1508

14032

16054

38394

Table 3.3.1c

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

Australia China Hong

Kong

India Indonesia Japan Malaysia

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

64kbps

2048kbps

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

512kbps 443 498 565 333 210 187 209

1536kbps 545 828 377 442 195 187

1984kbps 666 835 611 384 193 187 88

2020 1390 2003

2523 2121 1242 938 1863 1259

146 3941 1816 1883

1044

1187

476

548

2180 1417

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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Access Price Benchmarking for APCC 2013

1984kbps

2048kbps

New

Zealand

Philippines Singapore South

Korea

Taiwan Thailand Vietnam

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

64kbps

256kbps

132 619

535 804

289

464

289

491

236 270 202 124 101 75

493 397 288 232 141 87

334

264

99

235

214

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

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

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

34Mbps 5679 2891 2409 4775 3714 14419 13965

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

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

Australia China Hong

Kong

India Indonesia Japan Malaysia

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

64kbps

256kbps

368

524

415

521

474 436 114 116 23 712 949 459 424

583 498 185 147 207 495 1332 1258 2560

559 261

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

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

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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Access Price Benchmarking for APCC 2013

New

Zealand

Philippines Singapore South

Korea

Taiwan Thailand

2009 2012 2009 2012 2009 2012 2009 2012 2009 2012 2009

Vietnam

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

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

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

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Access Price Benchmarking for APCC 2013

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 3 rd and 2 nd highest for 45Mbps and

155Mbps. Malaysia on the other hand has come slightly down the list from the previous reports, being the 2 nd

highest only once (45Mbps) and 3 rd

highest four times. Vietnam takes the 1 st

slot for 34Mbps, 45Mbps and 155Mbps and 2 nd

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

17

Access Price Benchmarking for APCC 2013 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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Access Price Benchmarking for APCC 2013

3.3.2 Monthly Rentals for Leased Lines

Figure 3.3.2a

2km simple circuit monthly rental charges (64kbps

)

China

India

Japan

New Zealand

Singapore

Taiwan

Vietnam

0 100 200 300 400 500

USD

600 700 800 900 1000

Figure 3.3.2b

19

Access Price Benchmarking for APCC 2013

Figure 3.3.2c

Figure 3.3.2d

20

Access Price Benchmarking for APCC 2013

Figure 3.3.2e

Figure 3.3.2f

21

Access Price Benchmarking for APCC 2013

Figure 3.3.2g

Figure 3.3.2h

22

Access Price Benchmarking for APCC 2013

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.

23

Access Price Benchmarking for APCC 2013

Figure 3.3.3a

Installation Charge relative to annual rental

Figure 3.3.3b

24

Access Price Benchmarking for APCC 2013

Figure 3.3.3c

Figure 3.3.3d

25

Access Price Benchmarking for APCC 2013

Figure 3.3.3e

Figure 3.3.3f

26

Access Price Benchmarking for APCC 2013

Figure 3.3.3g

Figure 3.3.3h

27

Access Price Benchmarking for APCC 2013

Figure 3.3.3i

Figure 3.3.3j

28

Access Price Benchmarking for APCC 2013

64kbps

256kbps

512kbps

1536kbps

1984kbps

2048kbps

34Mbps

45Mbps

155Mbps

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

256kbps

512kbps

1536kbps

1984kbps

2048kbps

34Mbps

45Mbps

155Mbps

Australia

236

840

966

1027

889

889

4258

4258

3660

New

Zealand

China Hong

Kong

India

262

262

262

262

262

345

79

136

272

309

309

309

146

146

2255

2793

5661

2531

1750

2550

1045

1045

2805

Philippines Singapore South

Korea

Indonesia Japan Malaysia

731

1588

2057

2500

2555

2555

348

2569

2705

1642

501

1162

1629

2013

2370

2370

7913 4960

8077

9416

9416

13228

Taiwan Thailand Vietnam

64kbps

256kbps

512kbps

1536kbps

1984kbps

2048kbps

34Mbps

45Mbps

155Mbps

290

461

548

792

895

809

2777

2777

1270

201

691

933

757

757

3506

3506

4562

239

386

420

722

808

539

2411

2411

5307

Table 3.3.4b

235

503

520

970

962

962

3599

3599

8946

90

181

257

440

384

384

2889

2173

4104

214

793

789

390

830

830

8418

8418

5654

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

Australia China Hong

Kong

India Indonesia Japan Malaysia

110

342

146

243

459

459

2209

2209

2209

236

840

966

1027

889

889

4258

4258

3660

262

262

262

262

262

649

2255

3232

6275

79

136

272

309

309

309

2531

1750

2550

193

193

1123

1123

2961

731

1588

2057

2500

2555

2555

7913

348

2569

2705

1642

4960

8077

501

1162

1629

2013

2370

2370

9416

9416

13228

29

Access Price Benchmarking for APCC 2013

New

Zealand

Philippine s

Singapore South

Korea

Taiwan Thailand

64kbps

256kbps

512kbps

1536kbps

1984kbps

2048kbps

319

490

631

875

978

809

201

691

933

757

757

258

466

460

763

848

612

235

503

520

970

962

962

90

181

257

440

442

442

34Mbps

45Mbps

2777

2777

3506

3506

2411

2411

3599

3599

2889

2289

8418

8418

155Mbps 1270 4562 5307 8946 4279 5654

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

214

793

789

390

830

830

Vietnam

110

342

146

243

459

459

2209

2209

2209

Table 3.3.4.1a

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

Australia China Hong Kong

64kbps

256kbps

512kbps

2009

175

250

315

1536kbps 479

1984kbps 550

2048kbps

34Mbps

45Mbps

155Mbps

4258

3660

New Zealand

2012

236

840

966

1027

889

889

4258

64kbps

256kbps

512kbps

2009

305

536

625

1536kbps 1076

1984kbps 1123

2048kbps

34Mbps

45Mbps

155Mbps

2012

290

461

548

792

895

809

2777

2777

1270

2009

178

317

452

837

911

445

2309

2432

5058

2009

264

420

621

695

668

367

2033

2922

5166

3062

5413

Singapore

2012

262

262

262

262

262

349

2255

2012

239

386

420

722

808

539

2411

2411

5307

India

2009

122

155

155

298

298

298

1324

2323

2009

95

157

194

198

193

225

1757

2921

Taiwan

1750

2550

2012

79

136

272

309

309

309

2531

2009

30

30

30

30

30

1187

2012

146

146

1045

1187

3184

1045

2805

Thailand

2012

90

181

257

440

384

384

2889

2009

112

256

400

737

843

874

5252

2012

214

793

789

390

830

830

8418

1675 7623 8418

3182 14034 5654

30

Access Price Benchmarking for APCC 2013

Table 3.3.4.1b

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

2006

Australia China Hong Kong India

64kbps

2009

271

256kbps

512kbps

346

411

1536kbps 575

1984kbps 646

2048kbps

34Mbps

45Mbps

155Mbps

2012

236

840

966

1027

889

889

4258

4258

3660

2009

494

663

872

940

913

677

2523

3365

5740

2012

262

262

262

262

262

653

2255

3389

6027

2009

95

157

194

198

193

225

1757

2921

2012

79

136

272

309

309

309

2531

1750

2550

2009

30

30

30

30

30

1187

1187

3184

2012

193

193

1123

1123

2961

New Zealand Singapore Taiwan Thailand

64kbps

256kbps

512kbps

2009

330

588

696

1536kbps 2028

1984kbps 1144

2048kbps

34Mbps

45Mbps

155Mbps

2012

319

490

631

875

978

809

2777

2777

1270

2009

197

354

489

874

948

498

2595

2815

5529

2012

258

466

460

763

848

612

2411

2411

5307

2009

151

184

184

351

351

351

1430

2481

2012

90

181

257

440

2009

122

266

420

757

2012

214

793

789

390

442

442

2889

2289

863

894

5289

7660

830

830

8418

8418

4279 14108 5654

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

31

Access Price Benchmarking for APCC 2013

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

32

Access Price Benchmarking for APCC 2013

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

33

Access Price Benchmarking for APCC 2013

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

Bitrates

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

2012 2009 Bitrates 2012 2009

64 kbps

256 kbps

>200%

>250%

>400%

>800%

2048 kbps

45 Mbps

>350%

>180%

>1100%

>300%

Figure 3.3.6a

34

Access Price Benchmarking for APCC 2013

Figure 3.3.6b

Figure 3.3.6c

35

Access Price Benchmarking for APCC 2013

Figure 3.3.6d

Figure 3.36e

36

Access Price Benchmarking for APCC 2013

Figure 3.3.6f

Figure 3.3.6g

37

Access Price Benchmarking for APCC 2013

Figure 3.3.6h

Figure 3.3.6i

38

Access Price Benchmarking for APCC 2013

2Mbps

Australia

China

Hong Kong

India

Indonesia

Japan

Malaysia

New Zealand

Philippines

Singapore

South Korea

Taiwan

Thailand

Vietnam

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

10 Mbps

50 Mbps

4.1 Coverage

100 Mbps

1 Gbps

10 Gbps

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

Installation

1412.0

3060.0

52.0

593.0

3200.0

356.0

350.0

1852.0

159.0

399.0

229.0

2009

2Km >2Km

602.0

676.0

322.0

756.0

631.0

1138.0 1000.0

1434.0

1364.0

284.0

500.0

692.0

1647.0

230.0

828.0

Installation

2397.8

2540.3

0

9750.9

1111.0

847.5

1026.6

0

4333.3

1283.1

300.0

0

313.1

300.0

2012

2Km

698.7

304.8

288.8

74.8

850.0

697.0

965.3

482.0

1429.3

511.6

574.0

201.9

590.3

2746.0

>2Km

474.7

762.0

0

3517.0

0

0

0

568.0

327.0

0

937.0

115.9

0

0

39

Access Price Benchmarking for APCC 2013

Figure 4.2b

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

10Mbps

Australia

China

Hong Kong

India

Indonesia

Japan

Malaysia

New Zealand

Philippines

Singapore

South Korea

Taiwan

Thailand

Vietnam

Installation

928

3050

2971

879

438

297

3954

3048

89

774

1910

2009

2Km >2Km

999

1170

661

1800

4204

1614

1978

2082

2035 1646

798

1902

1207

2222

Installation

633

4333

1878

1000

690

626

300

2486

3339

0

9881

1111

1314

2790

2012

2Km

490

2020

1334

988

693

1148

9915

967

1044

553

341

1924

859

3318

50Mbps

Australia

China

Hong Kong

India

Indonesia

Japan

Malaysia

New Zealand

Philippines

Singapore

South Korea

Taiwan

Thailand

Vietnam

Figure 4.2c

50Mbps Ethernet P2P monthly rentals and installation charges, 2009 and 2012

Installation

4501.0

5548.0

0.0

663.0

3520.0

500.0

2702.0

1473.0

977.0

448.0

2009

2Km >2Km

1574.0 2285.0

3071.0

1385.0

2758.0

8457.0

4444.0

500.0

3705.0

4829.0 1843.0

1458.0

Installation

2889.6

6756.7

0

8593.8

0

978.5

2593.2

0

4333.3

2153.9

2000.0

1380.0

1070.8

800.0

2012

2Km >2Km

2216.9

2914.5

1870.0

8384.0

875.7 0

1324.3 21936.5

0

1474.5

4205.8

520.0

0

0

0

1350.0

4933.3

2039.4

2429.3

1686.0

3004.0

24281.0

218.0

0

4828.0

1206.9

0

0

>2Km

758

327

0

2163

449

0

0

948

2476

0

8571

0

0

0

40

Access Price Benchmarking for APCC 2013

Figure 4.2d

100Mbps Ethernet P2P monthly rentals and installation charges, 2009 and 2012

100Mbps

Australia

China

Hong Kong

India

Indonesia

Japan

Malaysia

New Zealand

Philippines

Singapore

South Korea

Taiwan

Thailand

Vietnam

Installation

4406.0

5756.0

204.0

726.0

762.0

4587.0

3750.0

4031.0

1766.0

953.0

448.0

2009

2Km

2107.0

4349.0

1085.0

303.0

3513.0

11711.0

983.0

4947.0

5153.0

6099.0

2138.0

7653.0

>2Km

3046.0

7777.0

5115.0

Installation

2397.8

6756.7

0

12439.7

1111.0

1328.2

3733.3

633.0

4333.3

2153.9

3000.0

1380.0

1070.8

800.0

2012

2Km >2Km

2164.6 2230.0

4549.8 14719.0

966.7 0

989.5 293557.5

5377.0 0

2017.4

5926.4

0

0

560.0

5993.3

1903.0

436.0

3113.9 0

3906.0 7765.5

2024.5 1761.5

3709.6 0

38782.0 0

1Gbps

Australia

China

Hong Kong

India

Indonesia

Japan

Malaysia

New Zealand

Philippines

Singapore

South Korea

Taiwan

Thailand

Vietnam

Figure 4.2e

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

Installation

8152.0

3971.0

0

576.0

6526.0

3750.0

5508.0

2194.0

1970.0

973.0

2009

2Km >2Km

6203.0

24368.0

1867.0

5616.0

38937.0

6807.0

16775.0

6414.0

9968.0 11668.0

13699.0

31283.0

Installation

7543.6

12857.3

0

26834.1

0

413.0

5379.8

758.0

4500.0

2795.6

0

0

0

0

2012

2Km >2Km

5412.6 5768.5

20503.7 71465.0

1646.9

5672.0

0

59811.0

0

3800.0

14745.6

1407.0

0

0

0

8078.0

15732.7

5273.5

2860.0

5984.4

0

0

3379.0

0

0

7563.8

0

0

41

Access Price Benchmarking for APCC 2013

Figure 4.2f

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

10Gbps

Australia

China

Hong Kong

India

Indonesia

Japan

Malaysia

New Zealand

Philippines

Singapore

South Korea

Taiwan

Thailand

Vietnam

Installation

4845

2337

2009

2Km

13402

23570

>2Km Installation

1103

0

8,147

0

0

0

0

16900

0

3766

0

413.00

0

2012

2Km

0

0

8,147

0

0

0

0

7907

7420

39288

0

11,000

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 4 th (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.

>2Km

0

0

0

0

0

0

0

7907

0

78576

0

0

0

42

Access Price Benchmarking for APCC 2013

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 1 st

and 2 nd

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.

43

Access Price Benchmarking for APCC 2013

Table 4.3a

PMP Uncontended

Australia China Hong Kong India Japan

2Mbps

10Mbps

50Mbps

Install

1,851

2Km

705

>2Km

705

Install

3,500

2,228 1,057 1,057 3,500

2,008 2,070 2,070 6,350

2Km

342

1,142

2,806

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

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

10Gbps 16,900 7,907 7,907

>2Km Install 2Km >2Km Install

162 178 1,410

335

736

387

775

1,410

1,410

825 889 1,410

1,404 1,530 1,410

2Km

80

215

868

1,515

9,822

>2Km

80

215

868

1,515

9,822

3,766 78,576 78,576

Install

549

1,090 1,125 1,633

525 1,511 2,567

1,238

2,049

2Km

533

2,265

9,819

>2Km

788

3,531

13,367

2Mbps

10Mbps

50Mbps

100Mbps

1Gbps

10Gbps

Malaysia

Install 2Km

2,217 6,184

4,737 10,086

6,316 11,414

12,632 76,648

>2Km Install

777

847

972

972

1,720

New Zealand

2Km

680

666

928

>2Km

610

889

1,763

1,114 2,578

2,072 11,390

Install

5,000

5,000

5,000

5,000

5,000

Philippines

2Km

560

1,900

3,600

4,600

6,400

>2Km

2,000

3,000

5,200

6,500

8,300

Install

1,511

2,702

3,153

2,898

3,056

Singapore

2Km

533

971

1,610

3,073

4,929

>2Km

Install

2Mbps

10Mbps

50Mbps

100Mbps

1Gbps

10Gbps

222

715

1,346

1,751

1,829

South Korea

2Km

770

1,428

2,919

2,747

7,661

>2Km

770

1,328

2,434

1,368

7,069

Taiwan Thailand Vietnam

Install

629

1,075

2,084

2,088

3,403

2Km

327

740

1,580

2,468

4,901

>2Km

327

740

1,580

2,468

4,901

Install 2Km >2Km

494

494

987

987

887

2,073

5,167

7,176

1,645 30,441

Install 2Km >2Km

210

210

560

560

345

833

1,958

2,543

222

922

1,444

2,569

1,050 17,648 16,584

44

Access Price Benchmarking for APCC 2013

2Mbps

10Mbps

50Mbps

100Mbps

1Gbps

10Gbps

Install

1,410

1,410

1,410

1,410

1,410

3,766

India

2Km

80

215

868

1,515

9,822

78,576

Table 4.3b

PMP Contended

>2Km

80

215

868

1,515

9,822

78,576

45

Access Price Benchmarking for APCC 2013

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

Rent

Install ation Rent

Install ation Rent

Thailand

Install ation Rent

Vietnam

Install ation Rent

Install ation

512/512

640/640

768/768

1000/1000

1024/1024

1538/1538

2000/2000

200 600 120 100

369

465

481

540

595

595

650

540

370 200

200 200

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Access Price Benchmarking for APCC 2013

Downlink/Uplink

(Kbps)

Australia

Rent

China

Install ation Rent

Hong Kong

Install ation Rent

64/64

128/128

256/256

384/384

512/512

640/640

768/768

1000/1000

1024/1024

1538/1538

2000/2000

2048/2048

2200/2200

2700/2700

3072/3072

3200/3200

3500/3500

4000/4000

4500/4500

6000/6000

10M/10M

950 504 233 2275

501 336 248 2275

507 336 262 2275

74 120

387 451 299 2300

517 336 254 2200

950 551 313 2275

555 617 254 2200

565 551 333 2275

390 451 348 2275

473 451 362 2653

419 551 246 2466 57

605 336 254

950 551

623 617

950 551

950 551

705 617 1111 1587

950 551

2286 6250

8000/8000 950 551

1.2Mbps/1.2Mbps

950 551

1.55Mpbs/1.55Mbps

45Mbps/45Mbps

155Mbps/155Mbps

622Mbps/622Mbps

4M/4M

6M/6M

8M/8M

5029

10000

2571 9524

5587

16008

9524

9524

133

164

215

231

India

Install ation Rent

1080 2500

Indonesia

Install ation Rent

Japan

Install ation Rent

Install ation

1600 1200

171 257

31

47

Access Price Benchmarking for APCC 2013

Figure 5.1b

DSL Asymmetric

Downlink/

Uplink

(Kbps)

Australia

Rent

Installa tion

256/64

512/128

2048/384

128/512

2048/512

4000/1024

128/256

256/512

512/1024

768/2048

768/4000

768/6000

2000/2200

8000/1000

1538/640

40

58

90 120

172 750

120

401

4000/512 117 682

6000/640 130 682

8000/640 138 682

12Mbps/640

148 682

Rent

China

Installa tion

407 223

Hong Kong

Rent

Installa tion

Rent

Japan

Installa tion

77 51

107 195

Singapore

Rent

Installa tion

Taiwan

Rent

Installa tion

90 150

108 150

120 150

130 150

190 150

250 150

522 650

80 80

48

Access Price Benchmarking for APCC 2013

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)

49

Access Price Benchmarking for APCC 2013

Figure 5.2b

Installation charges as percentage of annual rental (asymmetric)

50

Access Price Benchmarking for APCC 2013

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

51

Access Price Benchmarking for APCC 2013

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.

52

Access Price Benchmarking for APCC 2013

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

Japan and South Korea

Malaysia and Thailand

Indonesia higher for leased circuits but lower for Ethernet

Japan lower for some leased circuits, higher for some Ethernet

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%.

53

Access Price Benchmarking for APCC 2013

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

Hong Kong

Indonesia

Japan

Malaysia

New Zealand Australian prices are consistently lower

Singapore Hong Kong prices are consistently lower

Philippines Indonesian prices are consistently higher

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

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

54

Access Price Benchmarking for APCC 2013 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

Hong Kong

Indonesia

Japan

Malaysia

New Zealand

Singapore

Philippines

Australian prices are consistently higher

Hong Kong prices are consistently lower

Indonesian prices are consistently lower

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

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 1 st and 2 nd

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

Hong Kong

Japan

Malaysia

New Zealand Australian prices are consistently higher

Singapore Hong Kong prices are consistently lower

South Korea Japanese prices marginally lower below 1Gbps

Thailand Malaysian prices consistently higher

55

Access Price Benchmarking for APCC 2013

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.

56

Access Price Benchmarking for APCC 2013

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

57

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