3. CISCO VNI Forecasts 2012 - AUSTRALIA Growth
GB Generated Per Month by Average Internet Household 27.7 31%
Pctg of internet households generating more than 100 GB per month 3% 54%
Pctg of internet households generating more than 250 GB per month 1% 2%
Internet Video Traffic as Pctg of all Consumer Internet Traffic 90% 44%
9. o Subscriber growth boom is over
o Subs moving to highest speeds
o Uncapped data plans
o Fibre being deployed
o Mobile data small but growing fast
o DEMAND WILL GROW
12. o Video dominates content
o Content delivery networks push video closer to users
o Cache now accounts for > 50% of AU D/L Volumes
o Result: International capacity demand has slowed (Telegeography)
o Lot of headroom for more impact on Australasia’s demand
13. o Entitlement is greater than use
o Unlimited / TB Plans
o More can be consumed for no
increase in retail revenue
o DEMAND CAN GROW
14. o Users downloading much more
o But they pay the same or less
o Capacity Prices must fall to accommodate and facilitate
international demand
15. o CAGR Price Decline > -23%
o Reflecting:
o New cable competition
o Low MC of upgrades
o Retail broadband needs
16. o If we assume:
o SX 10G-2D/R circuit priced at Standard less 30% volume discount
o Include 2014 O&M costs
o 10 Year IRU depreciation,
o 50% average circuit load,
o Cost per GB is about 5 cents
o If the average volume download per Month is 23GB then monthly cost is :
o $1.10 - assuming no cache
o $0.55 cents - assuming 50% cache
0.05$ 5.00 10.00 15.00
40% 0.10$ 0.06$ 0.04$
50% 0.08$ 0.05$ 0.03$
60% 0.07$ 0.04$ 0.03$
E sd C ost per GB Depreciation Period Y ears
Average
Load
17. o Demand likely to
grow at 30 to 35%
annually
o Similar to
Telegeography
projection for
Oceania
18.
19. o Service Extension:
o Technical cable performance studies are indicating reliability until 2035
o IRU extension to 2030 very likely.
o Have already extended twice
o Upgrades
o Confirmed upgrade efficiencies based on 100G
o will allow us to meet expected demand over the next five years
20. o Builds
o Need to rebuild at some point.
o If demand > 35% and 400 G doesn’t offer a new paradigm
o required before 2020
o What to Build?
o Segments C only? - dramatically increases capability
o Progressive Overbuild
o New Routes
21. o Expanded capacity well ahead of demand
o Current upgrade of 1Tbps completes in June 2014
o Next upgrade of 1.4 Tb by end 2015
o IRU Term extended to 2030
o Implementation of more POPS in LA/SFO
o Further price reductions associated with capacity expansions
