China and India to drive Asian WAN growth

Stable economics and politics and foreign investment could drive uptake of WANs throughout Asia, especially in China and India, a research report said Thursday.

A stable economic and political climate and foreign direct investment could drive the implementation of WANs (Wide Area Networks) throughout Asia, especially in China and India, a research report said Thursday.

Growth in WAN use will be slow but steady, increasing to US$18.57 billion in 2012 from US$17.41 billion in 2005, a compound annual growth rate (CAGR) of just under 1 percent, according to a report by research firm Frost & Sullivan.

China and India are driving WAN growth, due to Internet uptake by small and medium-sized businesses and their demand for reasonably priced bandwidth. Foreign investment in those markets, in part due to BPO (business process outsourcing), is also driving that growth, Frost & Sullivan said.

The two markets are expected to account for 18.1 percent of total WAN revenue for the region by 2010, the report said.

The biggest challenge for Internet service providers (ISPs) offering WAN services will be declining prices and therefore revenue, especially in developed markets such as Japan and Hong Kong.

"The overall WAN services market still remains highly price sensitive," Frost & Sullivan said, stating that price declines were eclipsing the growth in demand in some markets.

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