Telstra's Hibbard Sees Demand Explosion For Backbone Svs
Monday December 4 11:11pm
Source: Dow Jones
HONG KONG -(Dow Jones)- The backbone network joint venture recently formed by Hong Kong's Pacific Century CyberWorks Ltd. (PCW), and Australia's Telstra Corp. (TLS), expects within five years to derive 80% of its revenues from buyers outside the PCCW and Telstra groups, a Telstra executive said Tuesday.
Today, over 50% of the joint venture's revenue comes from sales within the two groups, with the increase in external sales expected from new players looking to transmit mainly data, John Hibbard, managing director of global wholesale at the Australian telecommunications operator, told Dow Jones Newswires in an interview.
"The market will absolutely explode for servicing of new entrants in the market. They are all out there dying to sell stuff, but there is no way to sell at the moment because they cannot provide connectivity without paying really high prices to the existing carriers," he said.
The JV aims to provide companies connectivity for transmitting data and voice traffic globally, but will initially focus on customers in the Asia Pacific region, according to Hibbard, who will follow Telstra's network wholesale division into the 50-50 joint venture.
By 2005, Hibbard projects the global connectivity wholesale market will be worth US$75 billion - compared with US$48 billion today - and that the Asia-Pacific region will comprise around 25% of this.
But the key market for the Telstra/PCCW venture will be the discretionary data market, where new entrants buy capacity, which is likely to grow from less than US$1 billion today to around US$40 billion in 2005.
"That's what we are trying to capture, or at least a significant percentage of it," Hibbard said, noting that the target is a 25% share of the non-voice market.
-By Anette Jonsson, Dow Jones Newswires; 852-2802-7002; anette.jonsson@dowjones.com
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(This story was originally published by Dow Jones Newswires)
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