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| Gartner Dataquest Says Asia/Pacific Leased Line Market Return to Positive Growth in 2003 Despite Bandwidth Glut |
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SINGAPORE, Dec. 5, 2002 - Despite the rapid price erosion from the flood of new bandwidth, the Asia/Pacific leased line market will return to positive growth in 2003, according to Dataquest Inc. a unit of Gartner, Inc. (NYSE: IT and ITB). Asia/Pacific leased line market revenue is forecast to grow from $12.9 billion in 2002 to $13.3 billion in 2003.
The leased line market comprises international, domestic long distance and local leased lines. International leased lines is the sector that comes under the most severe pricing pressure, but soaring bandwidth demand as a result of Internet growth has offset the decline, resulting in revenue growth. However, steady growth from the local leased line sector will bolster revenue. It is currently the biggest segment in many countries, accounting for up to half of total leased line markets in some instances. Incumbent carriers face little competition and are under little pressure to cut prices. Bandwidth demand is also rising. "The biggest users of leased lines are corporations, followed by cellular operators, Internet service providers and alternative carriers," said Alayne Wong, industry analyst for Gartner Dataquest's worldwide telecommunications group. "Bandwidth demand is actually very strong as many Asian markets are still expanding and higher-speed applications are emerging. However, revenues are muted by falling prices." International leased line revenue in Asia/Pacific is forecast to grow from $1.8 billion in 2002 to $1.9 billion in 2003. "Despite severe pricing pressure from the launch of new high-capacity regional cables, increasing deregulation and competition have unleashed pent-up demand from large emerging markets such as China and India, supporting regional growth," Wong said. Domestic long distance leased line revenue projected to reach $5.4 billion in 2003, a slight increase from 2002 revenue of $5.3 billion, but Gartner Dataquest analysts said the segment will experience revenue declines a few years later, but this will be marginal. "As competition has already set in in liberalized markets like Japan, South Korea and Australia, there is little room to cut prices further. This sector has been buoyed up by demand from new alternative carriers, cellular operators, and ISPs without their own network infrastructure. However, going forward, the bigger players will start building their own networks," Wong said. Local leased line revenue is expected to reach $6 billion in 2003, an increase from 2002 revenue of $5.7 billion. "This is the main growth segment for many countries and incumbents still have virtual monopolies over this sector with little pressure to cut prices. Demand from corporations is still growing strong for corporate networks. In addition, cellular carriers have emerged as the next biggest buyer for linking base stations to support an increasing subscriber base," Wong said. Additional information is available in the Gartner Dataquest report "Leased-Line Market Thrives in Asia/Pacific Despite Bandwidth Glut." This report provides a detailed forecast for the industry through 2006. This forecast is broken out by country, as well as by leased-line segment. This report can be purchased on Gartner's Web site at http://www.gartner.com/DisplayDocument?id=372263. This analysis is provided by Gartner Dataquest's worldwide Telecommunications and Networking group. This group provides an analysis for the full spectrum of telecom and networking issues. To keep up to date on the latest telecommunications issues, please visit Gartner's Telecommunications Focus Area at www.gartner.com/telecom-mkt. To purchase the report or subscribe to Gartner Dataquest programs, call 408-468-8000 or go to www.gartner.com. Gartner Dataquest is the recognized leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the global information technology industry. Gartner, Inc. is a research and advisory firm that helps more than 10,500 clients leverage technology to achieve business success. Gartner's businesses consist of Research, Consulting, Measurement, Events and Executive Programs. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, and has 4,000 associates, including more than 1,000 research analysts and consultants, in more than 75 locations worldwide. Fiscal 2002 revenue totaled $907 million. For more information, visit www.gartner.com. |
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Contact: Celia Low Gartner +1 65 6879 2770 celia.low@gartner.com |
Contact: Tom McCall Gartner +1 408 468 8312 tom.mccall@gartner.com |
