Tele Geography Workshop International Market Trends Sponsored by

Tele. Geography Workshop: International Market Trends Sponsored by Carlsbad, CA | Washington, DC |

Tele. Geography Workshop: International Market Trends Sponsored by Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Preview of the Action • • • Introduction (Mike van den Bergh, PCCW) International

Preview of the Action • • • Introduction (Mike van den Bergh, PCCW) International Voice (Tim) Colocation (Jon) Service Pricing (Erik) International Networks (Tim) Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

A Map from the Age of Discovery Carlsbad, CA | Washington, DC | Exeter,

A Map from the Age of Discovery Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

International Voice: A Short and Happy Tale Tim Stronge tstronge@telegeography. com Carlsbad, CA |

International Voice: A Short and Happy Tale Tim Stronge tstronge@telegeography. com Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

A Picture of Stasis Global Traffic Rate of Price Decline versus Volume Growth Carlsbad,

A Picture of Stasis Global Traffic Rate of Price Decline versus Volume Growth Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

A Picture of Stasis Global Traffic Rate of Price Decline versus Volume Growth Carlsbad,

A Picture of Stasis Global Traffic Rate of Price Decline versus Volume Growth Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

A Picture of Stasis Global Traffic Rate of Price Decline versus Volume Growth Carlsbad,

A Picture of Stasis Global Traffic Rate of Price Decline versus Volume Growth Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Underneath the Stasis … Change Carrier Vo. IP versus TDM Interconnects Carlsbad, CA |

Underneath the Stasis … Change Carrier Vo. IP versus TDM Interconnects Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Skype’s Impact Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www.

Skype’s Impact Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Destination of Traffic Has Changed International Traffic to Emerging and Advanced Economies Carlsbad, CA

Destination of Traffic Has Changed International Traffic to Emerging and Advanced Economies Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

So, Too, Have Revenues Wholesale Revenues to Emerging and Advanced Economies Carlsbad, CA |

So, Too, Have Revenues Wholesale Revenues to Emerging and Advanced Economies Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

The End And We All Lived Happily Ever After Carlsbad, CA | Washington, DC

The End And We All Lived Happily Ever After Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Global Colocation Market Trends Jon Hjembo jhjembo@telegeography. com Carlsbad, CA | Washington, DC |

Global Colocation Market Trends Jon Hjembo jhjembo@telegeography. com Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Outline • What are the core data center markets and how fast are they

Outline • What are the core data center markets and how fast are they growing? • What markets are emerging as secondary regional hubs? • How do colocation prices compare across markets? Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Core Data Center Markets Carlsbad, CA | Washington, DC | Exeter, UK | Singapore

Core Data Center Markets Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Footprints vary considerably Retail Colocation Floor Space, 2014 Carlsbad, CA | Washington, DC |

Footprints vary considerably Retail Colocation Floor Space, 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Growth rates often inverse to market size Growth in Gross Retail Colocation Space, CAGR

Growth rates often inverse to market size Growth in Gross Retail Colocation Space, CAGR 2011 -2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Secondary Markets Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www.

Secondary Markets Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Some secondary hubs much larger than others Retail Colocation Floor Space, 2014 Carlsbad, CA

Some secondary hubs much larger than others Retail Colocation Floor Space, 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

…and growth rates vary considerably Growth in Gross Retail Colocation Space, CAGR 2011 -2014

…and growth rates vary considerably Growth in Gross Retail Colocation Space, CAGR 2011 -2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Pricing Trends Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www.

Pricing Trends Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Median prices vary across markets Median Monthly Price per Kilowatt at 4 -Kilowatt Density,

Median prices vary across markets Median Monthly Price per Kilowatt at 4 -Kilowatt Density, H 1 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

…and even more within each market Range in Monthly Price per Kilowatt at 4

…and even more within each market Range in Monthly Price per Kilowatt at 4 -Kilowatt Density, H 1 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Stark contrasts in cross-connect prices Median Monthly Fiber Cross-Connect Price, H 1 2014 Carlsbad,

Stark contrasts in cross-connect prices Median Monthly Fiber Cross-Connect Price, H 1 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

…but what really counts is the total cost Total Cost of Ownership per Month,

…but what really counts is the total cost Total Cost of Ownership per Month, Five Cross-Connects, H 1 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Colo prices steadier than network prices Median Colo Price per KW and 10 Gig.

Colo prices steadier than network prices Median Colo Price per KW and 10 Gig. E Prices, New York, H 2 2013 -H 1 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Prices expected to remain stable Operator Price Expectations by Metro Area, H 1 2014

Prices expected to remain stable Operator Price Expectations by Metro Area, H 1 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Conclusion • Core colocation markets have varying growth rates but continual international investment. •

Conclusion • Core colocation markets have varying growth rates but continual international investment. • Some secondary markets are expanding much faster than others. • European colocation markets are typically more price -competitive than American and Asian markets, due to lower connectivity pricing. Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Network Pricing, Bottom to Top Erik Kreifeldt ekreifeldt@telegeography. com Carlsbad, CA | Washington, DC

Network Pricing, Bottom to Top Erik Kreifeldt ekreifeldt@telegeography. com Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Pricing stack • Bottom layer: Transport – “Spectrum, ” waves; by route, carrier, capacity

Pricing stack • Bottom layer: Transport – “Spectrum, ” waves; by route, carrier, capacity • Layer 2: Ethernet • Layer 3: IP Transit • Top layer: Enterprise – EVPN, IP VPN, DIA, Local access Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Bottom Layer: Transport Prices Carlsbad, CA | Washington, DC | Exeter, UK | Singapore

Bottom Layer: Transport Prices Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Alien Waves! • Unforeseen cable upgrades, huge demand from nontraditional operators • Hybrid cable

Alien Waves! • Unforeseen cable upgrades, huge demand from nontraditional operators • Hybrid cable owner/bandwidth customer model • Negotiate on cost not price • Operational problems • Concept evolved to securing share of capacity • Valuation relies on MRCs/IRUs Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

100 G Transport Price Route Sample Tokyo–Frankfurt via Los Angeles, New York, London Carlsbad,

100 G Transport Price Route Sample Tokyo–Frankfurt via Los Angeles, New York, London Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Wave Price Multiples 7 x: 10 x Q 4 2014 Trans-Oceanic and Trans-Continental Prices,

Wave Price Multiples 7 x: 10 x Q 4 2014 Trans-Oceanic and Trans-Continental Prices, 10 G &100 G Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

10 G Transport Price Route Sample Trans-Atlantic, Europe-Asia, Intra-Asia, Trans-Pacific, U. S. -Latin America

10 G Transport Price Route Sample Trans-Atlantic, Europe-Asia, Intra-Asia, Trans-Pacific, U. S. -Latin America Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Prices Vary by Location Q 4 2014 10 Gbps Prices and 3 -Year CAGR

Prices Vary by Location Q 4 2014 10 Gbps Prices and 3 -Year CAGR on Global Routes Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Prices Vary by Distance Q 4 2014 10 Gbps Prices and 3 -Year CAGR

Prices Vary by Distance Q 4 2014 10 Gbps Prices and 3 -Year CAGR on Global Routes Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

10 G Transport Price Range Example Trans-Pacific Pricing: Los Angeles–Tokyo Carlsbad, CA | Washington,

10 G Transport Price Range Example Trans-Pacific Pricing: Los Angeles–Tokyo Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Prices Vary by Carrier Price Range by Carrier, 10 Gbps, Los Angeles–Tokyo, 2011– 2014

Prices Vary by Carrier Price Range by Carrier, 10 Gbps, Los Angeles–Tokyo, 2011– 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Layer 2: Ethernet Prices Carlsbad, CA | Washington, DC | Exeter, UK | Singapore

Layer 2: Ethernet Prices Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Ethernet Price Route Sample Trans-Atlantic, Europe-Asia, Intra-Asia, Trans-Pacific, U. S. -Latin America Carlsbad, CA

Ethernet Price Route Sample Trans-Atlantic, Europe-Asia, Intra-Asia, Trans-Pacific, U. S. -Latin America Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Ethernet Prices Vary by Location Fast. E Eo. MPLS H 2 2014 Prices and

Ethernet Prices Vary by Location Fast. E Eo. MPLS H 2 2014 Prices and 3 -Year CAGR Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Ethernet Prices Vary by Transport Median Gig. E Prices by Transport Type and Route,

Ethernet Prices Vary by Transport Median Gig. E Prices by Transport Type and Route, H 2 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Ethernet Prevails Over SDH Frankfurt–London Capacity Pricing by Transport Type, H 2 2014 Carlsbad,

Ethernet Prevails Over SDH Frankfurt–London Capacity Pricing by Transport Type, H 2 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Layer 3: Transit Prices Carlsbad, CA | Washington, DC | Exeter, UK | Singapore

Layer 3: Transit Prices Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

IP Transit Price Sample Europe, Asia, Australia, North & South America Carlsbad, CA |

IP Transit Price Sample Europe, Asia, Australia, North & South America Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

IPT Declines Easing in Some Cases Q 4 2014 10 G IPT prices &

IPT Declines Easing in Some Cases Q 4 2014 10 G IPT prices & CAGRs globally Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

“Pipe & Port” Comparison Carlsbad, CA | Washington, DC | Exeter, UK | Singapore

“Pipe & Port” Comparison Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Pipe & Port vs. Local Transit Plus Transport Prices to Selected Locations, 10 G,

Pipe & Port vs. Local Transit Plus Transport Prices to Selected Locations, 10 G, 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Top Layer: Enterprise Prices Carlsbad, CA | Washington, DC | Exeter, UK | Singapore

Top Layer: Enterprise Prices Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Enterprise Price Sample Europe, Asia, Australia, North & South America Carlsbad, CA | Washington,

Enterprise Price Sample Europe, Asia, Australia, North & South America Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Comparing Enterprise Options Median 10 Mbps Prices for DIA, EVPN, and IP VPN, Q

Comparing Enterprise Options Median 10 Mbps Prices for DIA, EVPN, and IP VPN, Q 3 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

EVPN tops IP VPN at High Capacity Median Price for IP VPN and EVPN

EVPN tops IP VPN at High Capacity Median Price for IP VPN and EVPN in Frankfurt by Mbps, 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Enterprise Services Growing Prevalence and Growth of Enterprise Products, 2014 Carlsbad, CA | Washington,

Enterprise Services Growing Prevalence and Growth of Enterprise Products, 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Access Capacities Remain Modest Global Mix of Access Sales by Capacity, H 2 2013

Access Capacities Remain Modest Global Mix of Access Sales by Capacity, H 2 2013 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Unit Price from 100 G to 10 Mbps Unit Price of 100 Gbps wave

Unit Price from 100 G to 10 Mbps Unit Price of 100 Gbps wave vs. 10 Mbps DIA, Los Angeles–Tokyo Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Summary • Even as product mix and transaction types evolve – Network prices fall,

Summary • Even as product mix and transaction types evolve – Network prices fall, from bottom to top, – Prices vary by location, carrier, capacity • 10 G remains primary unit of bandwidth – As buyers move to up to 100 G and beyond, others will move up to 10 G, further enabled by SDN/NFV • SDH appeal fading, especially at high capacity • Most local access capacities remain low – Unit price range between core and access is large Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

International Networks: Something Old, Something New Tim Stronge tstronge@telegeography. com Carlsbad, CA | Washington,

International Networks: Something Old, Something New Tim Stronge tstronge@telegeography. com Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Growth Fundamentals Still Solid Carlsbad, CA | Washington, DC | Exeter, UK | Singapore

Growth Fundamentals Still Solid Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Still Plenty of Potential Capacity Carlsbad, CA | Washington, DC | Exeter, UK |

Still Plenty of Potential Capacity Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Trans-Pacific Potential Capacity as Currently Announced by Operators Carlsbad, CA | Washington, DC |

Trans-Pacific Potential Capacity as Currently Announced by Operators Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Trans-Pacific Potential Capacity with Two New Cables Carlsbad, CA | Washington, DC | Exeter,

Trans-Pacific Potential Capacity with Two New Cables Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Trans-Pacific Potential Capacity if 100 x 100 G Waves per Fiber Pair - All

Trans-Pacific Potential Capacity if 100 x 100 G Waves per Fiber Pair - All Cables Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

What’s New? 1: Regional Parity Carlsbad, CA | Washington, DC | Exeter, UK |

What’s New? 1: Regional Parity Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Trans-Atlantic No Longer Dominant International Internet Bandwidth, 2004 Carlsbad, CA | Washington, DC |

Trans-Atlantic No Longer Dominant International Internet Bandwidth, 2004 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Trans-Atlantic No Longer Dominant International Internet Bandwidth, 2014 Carlsbad, CA | Washington, DC |

Trans-Atlantic No Longer Dominant International Internet Bandwidth, 2014 Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Regional Price Differences Narrow 10 Gbps Wavelength Price Multiples over London-New York Carlsbad, CA

Regional Price Differences Narrow 10 Gbps Wavelength Price Multiples over London-New York Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

What’s New? 2: Rise of the Content Provider Networks Carlsbad, CA | Washington, DC

What’s New? 2: Rise of the Content Provider Networks Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Connecting These Things Requires Bandwidth Carlsbad, CA | Washington, DC | Exeter, UK |

Connecting These Things Requires Bandwidth Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Private Networks Have Grown Fast Carlsbad, CA | Washington, DC | Exeter, UK |

Private Networks Have Grown Fast Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

… and Are Now Sizeable Carlsbad, CA | Washington, DC | Exeter, UK |

… and Are Now Sizeable Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

… and Are Now Sizeable (Whoa. ) Carlsbad, CA | Washington, DC | Exeter,

… and Are Now Sizeable (Whoa. ) Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

There’s a Word for This Type of Market “Oligopsony” Carlsbad, CA | Washington, DC

There’s a Word for This Type of Market “Oligopsony” Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Examples of Oligopsony • Oligopsony: market with a few, large buyers • Example 1

Examples of Oligopsony • Oligopsony: market with a few, large buyers • Example 1 – Cocoa Industry • Example 2 – Tobacco Industry Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

FASTER Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography.

FASTER Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Monet Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography.

Monet Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

What’s New? 3: IP Transit Revenue Estimates Carlsbad, CA | Washington, DC | Exeter,

What’s New? 3: IP Transit Revenue Estimates Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

IP Transit Volumes Carlsbad, CA | Washington, DC | Exeter, UK | Singapore |

IP Transit Volumes Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Transit is Fading … For Now Transit as a Share of IP Volumes Carlsbad,

Transit is Fading … For Now Transit as a Share of IP Volumes Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Submarine Cables Support IP Transit IPT-Related Revenue: Transport vs. Port Revenues Carlsbad, CA |

Submarine Cables Support IP Transit IPT-Related Revenue: Transport vs. Port Revenues Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

Mahalo! Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography.

Mahalo! Carlsbad, CA | Washington, DC | Exeter, UK | Singapore | www. telegeography. com | info@telegeography. com

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