The structured cabling market in Asia Pacific (including Japan) should hit US$1.53 billion by 2010, with a compounded annual growth rate (CAGR) of 11 percent from 2005 to 2010 according to an AMI Partners research commissioned by SYSTIMAX® Solutions™ from CommScope (NYSE: CTV), the worldwide leader in structured connectivity solutions. Only 68 percent of this market will be made up of residential and enterprise structured cabling, while the remainder will come from the data center structured cabling market.
According to AMI, in 2005 only 13.8 percent of the structured cabling business in the region came from the data center market. In 2010, the research suggests that data centers will contribute about 32 percent of the structured cabling business in the region.
“A typical data file has more than tripled in size over the last few years,” said Dr Ispran Kandasamy, Vice President and Managing Director of Asia Pacific for SYSTIMAX Solutions. “This trend is projected to continue over the next several years as multiple terabytes of data are moved and stored on enterprise servers in data centers. Keeping ahead on access capability and storage capacity is a daunting task for data center managers. This challenge presents a great opportunity for the region’s data center structured cabling support businesses.”
Fastest growth in India
The fastest growing market in the region is India, with a CAGR of 46 percent in the data center structured cabling market according to AMI. In comparison, the overall structured cabling market in the country is expected to grow by a CAGR of 22.1 percent for the same period.
The Indian data center market opportunity, which is estimated to be worth around US$100 million now, is expected to double by 2009. The growth is expected to be driven by a number of factors, including increasing supply and decreasing cost of Internet bandwidth and the reality of more domestic companies hosting their mission-critical applications such as Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) in third-party data centers. AMI expects that increasing convergence will also be a growth factor as India’s leading cable operators and telecommunications companies roll out ‘triple play’ services and solutions that include the delivery of television, telephony and broadband Internet access over a single network.
China outruns overall market
China is expected to showcase a 37.5 percent CAGR in the data center structured cabling market, while the overall structured cabling market will demonstrate only 13.6 percent growth.
AMI Research projects the healthy growth in China to be driven by the following factors:
• Cable TV is set to play a pivotal role in China’s converged media environment as triple play services begin to be delivered over cable TV infrastructures. China has the largest cable TV network in the world.
• China’s online game sector will see very high double-digit growth rates in the coming years as more Chinese gain access to the Internet. China is a big hub for game distribution, which involves huge amounts of data. This, in turn, raises demand for data centers.
• The most rapid growth in Internet usage last year came from blogging. The nation now has 20.8 million bloggers. Top blogging sites are hosted by Sina, Qzone and Microsoft's MSN.
• Other new Internet services that are gaining particularly wide acceptance include personal Web pages similar to those on MySpace, video-hosting and video-sharing based on the Web 2.0 standards, as well as a service called wit-key that allows users to post their questions for solution tips from online pals.
• The popularity of video-hosting and video-sharing services has led to a surge of 76 million users by the end of 2006, more than traditional Internet services in e-commerce, automobile or real estate networks.
Mature markets continue to grow
According to AMI, in mature markets such as Singapore, Hong Kong, Australia, South Korea and Japan, the data center structured cabling business is expected to register a robust CAGR of approximately 15 to 26 percent, with Singapore (25.3 percent) and Hong Kong (25.8 percent) leading the pack.
Hong Kong’s growth leadership is driven by its Digital21 Strategy. The Hong Kong Government is making special provisions for data center and call center locations, thus playing an active role in promoting data center facilities in the Special Administrative Region (SAR).
On the other hand, AMI Research suggests that Singapore’s healthy growth in the data center structured cabling market is being driven by the following factors:
• SingTel, the country’s biggest telecommunications operator, has jumped into the triple play bandwagon with the launch of its Generation Mio service.
• iN2015, the nation’s new infocomm development master plan, includes the Next-Generation National Infocomm Infrastructure, (NII) which will be put in place by 2012. The NII is capable of delivering broadband speeds of up to 1 Gbps while offering extensive connectivity around the country. The infrastructure will also be IPv6-compliant and will enable an exciting host of new broadband-enabled services and applications, such as immersive learning experiences, telemedicine, high definition TV, immersive video conferencing and grid computing.
• The Singapore government will roll out further e-services to provide better citizen-to-government interaction. This is expected to require more data centers.
“We believe there is a significant data center structured cabling market opportunity in the region," Dr Kandasamy continued. “We are confident that our SYSTIMAX Solutions market-leading product portfolio, which includes SYSTIMAX GigaSPEED® X10D, the real-time infrastructure management solution, iPatch®, and the SYSTIMAX VisiPatch® 360 System solutions, will help meet the market demands in Asia Pacific."
Summary of AMI Research Findings
• The Structured Cabling Market in Asia Pacific is set to grow at 11 percent through 2010. The fastest growing market is India with a CAGR of 22.1 percent. China is second at 13.6 percent. However, in sheer market size, the China market (US$229.6 million) will be a much larger market than India (US$125.7 million) in 2010.
• Data Center Structured Cabling market has picked up momentum in the APAC region with the 2010 market size expected to be close to US$500 million. The CAGR is expected to be 32.8 percent.
• More than 90 percent of the Structured Cabling market (including Data Center Structured Cabling) is concentrated in China, India, Japan, South Korea and Australia.
• The highest growth market in APAC is India (46 percent), closely followed by China (37.5 percent). The moderate growth markets are Hong Kong (25.8 percent), Singapore (25.3 percent), South Korea (24.1 percent), Australia (19.7 percent) and Japan (14.7 percent).
• India (US$39.3 million) overtook Japan (US$26.5 million) in 2006 in terms of spending on data center structured cabling.
• Growth in the APAC Data Center market is being driven by the popularity of online gaming, triple play services, blogging, video sharing and video hosting. This growth will directly translate into excellent growth for Data Center Structured Cabling.
Editors’ Note:
The market figures are based on research conducted by AMI Partners and commissioned by SYSTIMAX Solutions.
About SYSTIMAX Solutions
SYSTIMAX Solutions from CommScope (NYSE: CTV) is a worldwide leader in structured cabling systems and provides integrated end-to-end connectivity solutions for video, voice, data and building management applications in both wired and wireless enterprise networks.
SYSTIMAX Solutions supplies its high-performance and market-leading range of products through a network of highly skilled BusinessPartners. The product range includes the copper-based GigaSPEED X10D and GigaSPEED XL Solutions, the fiber optic LazrSPEED® and TeraSPEED™ Solutions and the iPatch® Real Time Infrastructure Management System. The SYSTIMAX AirSPEED™ Solution adds a wireless option to the portfolio. Drawing on their Bell Labs heritage, the people of SYSTIMAX Labs who have spearheaded these innovations will continue to play an integral role in the future success of SYSTIMAX Solutions. Currently the company’s BusinessPartners install an average of over 1,000 miles (1,600km) of SYSTIMAX cable every day in approximately 130 countries worldwide.
Forward-Looking Statements
All statements in this press release that are not historical facts should be considered forward-looking statements that are based on information currently available to management, management's beliefs, as well as on a number of assumptions concerning future events. These forward-looking statements are identified by words such as “believe,” “expect,” “confident” and similar expressions. They are not a guarantee of performance and are subject to a number of uncertainties and other factors that could cause the actual results to differ materially from those currently expected. Factors that could cause such a difference include, but are not limited to, actual structured cabling demand in the Asia Pacific region, changes in technology and the business environment that could alter customer demand, among others. For a more detailed description of the factors that could cause such a difference, please see CommScope's filings with the Securities and Exchange Commission. In providing forward-looking statements, the company does not intend, and is not undertaking any obligation or duty, to update these statements as a result of new information, future events or otherwise.
Media Enquiries:
SJ Lee
SYSTIMAX Solutions
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