Gartner finds that international leased line prices from India are five times more compared to hub routes like Singapore-Hong Kong or Singapore-Tokyo. This is due to lack of competition, says Gartner's report on International Bandwidth Pricing Trends (Asia-Pacific).
However the report, released on Tuesday, expects that the fast growing Indian market will see a 40 to 50 per cent price decline compared to a 20 to 25 per cent fall in international bandwidth pricing in the Asia-Pacific region over the next three years. It adds the fall will be primarily because of excess capacity and growing competition for the enterprise business.
For instance, India will see capacity addition on the western (towards Europe) and Eastern routes (towards Singapore) by TICS (Tata Indicom) and FLAG Falcon (Reliance).
Puneeth Punja, Principal Analyst -- Gartner said, "Significant price variations continue to exist between open markets and controlled markets. On the high-traffic competitive routes that connect relatively open markets like Singapore, Hong Kong and Japan the monthly recurring charge for a 1 Mbps international leased line is $700 to $ 900. The prices from the hubs to developing markets like Indonesia, Malaysia, Thailand, and India are more than five times higher."
According to Gartner, the most competitive markets in Asia-Pacific for international bandwidth are Hong Kong, Singapore, Japan, Taiwan and South Korea, whereas the least competitive markets are Indonesia, Malaysia and India.
The report comparing intra-city leased line pricing across Asia-Pacific markets said local access costs constitute more than 50 per cent of total end-to-end cost for international connectivity.
Even with increasing de-regulation there will be limited competition in access and prices for the link will not decline much. Local access costs are the lowest in Taiwan, India, Hong Kong and Singapore, while they are the highest in Thailand, Philippines, Japan and Indonesia, it said.
