INTERNATIONAL CONNECTIVITY SERVICES: Good News Gets Better

Market Information

According to Telegeography, the international voice market in 2001 was pegged at around $60.6 billion, a sharp decline from $70 billion achieved in 2000. In terms of call volume, the international voice market is estimated at around 150 billion minutes of which Voice over Internet Protocol (VoIP) contributes around 6 percent of all international voice traffic. It is expected that due to drop in prices and marginal growth the international voice market will see a drop in revenue in years to come. India is also following the worldwide trend and though there has been a growth in international voice traffic the overall market has reduced due to significant drop in ILD prices.

International Bandwidth—Scarce no More

With SAFE, Network i2i becoming operational, along with the existing cables like Flag, SEA-ME-WE-2 and SEA-ME-WE-3, India will have a surplus bandwidth capacity forcing service providers to reduce international bandwidth rates. Though i2i is operational for voice traffic the company is yet to launch its data services. On the satellite front NewSkies has done pretty well and has tied up both with Data Access and Reliance Infocomm. But almost all the satellite players are present in the country like Intelsat, Eutelsat, Panamsat, Europe Star, CyberStar, AsiaStar, Thaicom, and Measat and they have an abundance satellite capacity. ILD carriers will have a lot of option to mix and match between different service providers (satellite and submarine) depending upon cost, and quality of service. Connectivity to South East Asia can be cost effective through Network i2i and SAFE; SEA-ME-WE-2 and SEA-ME-WE-3 can be ideal for Africa; and FLAG and SAFE for Europe.

International Submarine Cable Capacity in India

Players

System Capacity

SEA-ME-WE-2

SEA-ME-WE-3

20 Gbps

FLAG

10 Gbps

SAFE

10 Gbps

Network i2i

160 Gbps

V&D estimates

India is transforming from a scarce international bandwidth to an excess bandwidth country on the submarine cable front. Even on the domestic front, things are improving at a faster pace with the increase in number of service providers and the faster roll out of NLD players in different regions of the country.

SAFE has been launched and it is operational and links South Africa with the Far East. The cable network has two pairs of cables with a maximum capacity of 80 Gbps. In India, the cable has a landing station in Kochi which is linked to the main cable from Mauritius and headed for Penang, Malaysia.

Network i2i is a joint venture of SingTel and Bharti Group. Presently, the cable is limited for voice traffic only and very soon the company is planning to launch data traffic. Initially four out of the eight fiber pairs will be lighted and equipment will be delivered for providing 160 Gbps bandwidth

With increase in submarine cable capacity and satellite capacity, India will have huge capacity resulting in dropping of prices by around 3 to 5 times the present pricing if one is looking at an STM-1 link and assuring a good demand in future. But if one is looking at a retail level, one will see a drop of 30 to 40 percent over next twelve months.

It is expected that in FY 2002-03, the ILD voice traffic will reach around 3.7 billion minutes showing a growth of around 18.58 percent growth. In the last fiscal it was around 3.12 billion minutes and registered a volume growth of 16.06 percent.

In FY 2002-03 the international connectivity market is expected to be in the range of Rs 350 crore considering the fact that there was a significant drop in IPLC prices. Till December last year, VSNL had monopoly on the data front but with the coming of new players we might see drop in prices and enhanced service quality in days to come.

MPLS-based VPN Network

The IP-based virtual private network (VPN) is rapidly becoming the foundation for the delivery of new world services and many service providers are offering value-added applications on top of their VPN transport networks. Two unique complementary VPN architectures based on IP Security (IPsec) and Multiprotocol Label Switching (MPLS) technologies are emerging. IPSec based VPNs are very popular among all service providers. On the other hand MPLS based VPNs are used for more sophisticated and manageable networks capable of supporting transparent application support across diverse platforms. Using VPN network one can run applications like e-commerce, application hosting, and multimedia applications which will enable service providers to generate new incremental revenue and maintain long-term competitive advantage.

MPLS is a high-performance packet forwarding technology that integrates the performance and traffic management capabilities of data link layer (Layer 2) switching with the scalability, flexibility, and performance of network-layer (Layer 3) routing. It enables to meet challenges brought about by explosive growth and provides the opportunity for differentiated services without necessitating the sacrifice of existing infrastructure. Some of the features of MPLS are: data can be transferred over any combination of Layer 2 technologies; support is offered for all Layer 3 protocols; and scaling is possible well beyond anything offered in today’s networks.

Difference between MPLS-based VPN and IP Sec-based VPN

MPLS based VPN

Capable of supporting tens of thousands VPN groups over the same network since no site to site peering is required.

Capable of supporting QoS and traffic Engineering.

Bandwidth utilization can be fully controlled.

IP Sec based VPN

It supports large scale deployment but requires proper planning and coordination issues

Does not support QoS and traffic engineering.

Bandwidth utilization cannot be fully controlled.

Data Access has recently unveiled its data strategy whereby its plans to operate point to point IPLC service. The company has tied up with HECL for marketing of its service.

Bharti Telesonic is in the process of announcing its data strategy as presently the company is focussing more on voice traffic. In the case of Reliance Infocomm there is still a wait and watch approach..

EXPERTS PANEL

Avnish Dutt, country manager, Equant

Kamlesh Raval, business manager India, (global business), PCCW Communications Singapore

Monisha Singh, regional director, India & South Asia, Sprint International

Sanjiv Bhagat, country general manager, AT&T Business Services, AT&T Communication Services India Pvt Limited