ack to the region. Furthermore, most Web sites are still situated in the U.S.
Asian Internet users routinely suffer connection delays and data traffic jams--even in the most advanced nations, not to men
tion developing countries that have outdated phone systems and networking schemes. To alleviate these problems, several Asian carriers and regional Internet service providers (ISPs) have recently formed alliances to install the first high-speed, meshed backbones in the region.
Backbones currently being deployed in Asia include:
-- A consortium led by Hong Kong Supernet,
Singapore's Pacific Internet, Japan's Sumitomo, and the Internet Initiative of Japan (IIJ) announced last spring an Asian backbone, dubbed ABONE. The group is setting up T1 and E1 links that run at 1.544 Mbps and 2.048 Mbps, respectively.
-- Both T1 and E1 lines connect a recently formed group led by Japan's CSL
and KDD, Hongkong Telecom, Macao's CTN, Singapore's Singnet, and Taiwan's Directorate General of Telecommunications (DGT). Links are also planned for Australia, China, Malaysia, the Philippines, and Thailand.
-- AT&T, KDD, and Singapore Telcom announced plans to set up
an asynchronous transfer mode (ATM) trial in Asia.
-- AT&T, IBM, and Global One are expanding their own private backbones
in Asia.
More links are expected. But not all, if any, of these links will connect to other backbones, nor is there a sign of compatibility, analysts say. Still, the move to deploy these backbones in Asia will help alleviate the U.S.-centric topology, says Nicholas Lee, chief executive of Pacific Internet, one of Singapore's largest ISPs and a member of the ABONE consortium.
"In time, the use of the Internet will double or triple in Asia," Lee says. "What's going to happen in the next five years is that the ratio of Internet data moving from Asia to the United States will be reduced from 80:20 to 70:30, and perhaps 60:40 in the years to come." Commerce and trade will drive this trend, he adds.
It will take some time before Asia is capable of supporting electronic commerce through the Internet, but businesses are certainly aware of the potential. T
he worldwide Internet market (with World Wide Web access) is projected to grow from 8 million users in 1995 to 80 million in 1997, according to figures from U.S. Internet software supplier Aimnet. Asia's Internet end-user base could grow from around 2.1 million in 1995 to more than 6.5 million in 1997, Aimnet projects. This is based on the estimated number of users in China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, the Philippines, Singapore, Thailand, and Taiwan.
Not every Asian nation will benefit from the Net. Many lack digital phone lines or circuits to support Internet connectivity. Some cannot afford it: A T1 connection, if available, runs $15,000 per month. Necessary equipment starts at more than $30,000. Japan is the most advanced regarding Internet usage, with more than 300 ISPs serving 1.6 million users last year, according to Aimnet. In contrast, Vietnam's Internet base is estimated to be 300 users, with the government the sole ISP.
Another limiting factor is language. Englis
h is the de facto standard on the Internet, but one-third of the world's population uses character-based languages, many of which are not supported on the Web. There's a push to support Chinese, Japanese, and other languages. "Chinese content on the Internet is increasing, but Japanese is ahead of the game in Asia," says Philip Wong, chief executive for Asia On-Line, a large Hong Kong ISP that specializes in developing Asian-language content on the Web.
How content will develop in certain countries is an interesting issue. It's well documented that officials in China and other countries view the Internet as a threat to social order. Any Chinese citizen who signs up for access must register with the local police and promise not to commit crimes against the state.
The Sleeping Giant
Countries in the Greater China region (China, Taiwan, and Hong Kong) are working to solve some basic communications issues. China and Taiwan, for example, do not have direct sea, air, or telecommunica
tions links. Phone calls from Taiwan to China are diverted from the island to two long-distance carriers, either Japan's KDD or Hongkong Telecom. Internet traffic from Taiwan to China usually goes from the island to U.S. Sprint's office in Stockton, California, and then bounces back to gateways in China.
China is deploying an ambitious backbone to link the entire nation of more than 20 provinces, but it's unlikely in the near term that most of the country's 1.1 billion people will ever use--or hear about--the Internet. There are two types of backbones deployed in China: commercial and academic. The most ambitious academic faction is the China Education and Research Center (CERNet), which plans to connect all of China's universities, institutes, and grade schools by the year 2000. CERNet is developing its own private backbone.
The commercial sector is also ambitious. In late 1994, China's Ministry of Posts and Telecommunications (MPT) began to deploy a public data network backbone. The network, cal
led the China Digital Data Network (CDDN), is basically a fiber-optic link between Beijing, Guangzhou, and Shanghai. CDDN was supposed to be completed this summer, but some observers believe the backbone will not be totally operative until late this year or beyond. There is currently a fiber-optic link between Beijing and Shanghai, as well as a separate line in limited use. In the works is a fiber-optic line from Shanghai to Guangzhou.
CDDN is linked into China's provinces. From there, CDDN is allocated or "split" into packet switching, Internet, or telephony services. Each provincial telecom is in charge of developing and providing its own backbones and services within the province.
To talk to the outside world, Beijing and Shanghai have separate (and reportedly the only) gateways. Shanghai has an E1 link that extends to U.S. Sprint in California. Beijing has a 256-Kbps link to U.S. Sprint and a recently installed "split E1" line to MCI in the U.S.
China Internet Corp. (CIC) also has its ow
n regional backbone, dubbed CICNet. CIC has a 64-Kbps leased line that runs from Hong Kong to Guangzhou, which serves as the Internet-access backbone for its customers in China.
CIC broadened its capacities and customer base in May by adding an Internet link with southern China's main carrier, the state-run Guangdong Post and Telecommunications Administration (GPTA). GPTA had launched GNET, a regional backbone in the Guangdong province, in late '95. By this spring, GNET had two separate E1 links from its hub in Guangzhou to a pair of southern Chinese cities: Foshan and Shantou. By the end of this year, GNET plans to connect into 23 cities in the southern province of Guangdong, according to Aaron Y.T. Cheung, vice president of network technology and operations for CIC.
CDDN "is a generic, nationwide backbone, while CNET is a regional backbone built around a star-based networking topology," Cheung says. CIC will use the CNET as "an intranet in a large sense of the word," he adds. "It's a private net
work for corporations, our major focus." CIC, whose corporate customers are based in Hong Kong and China, claims CNET will help serve as bridge between Hong Kong and China-based trade. But some analysts wonder if CIC is really the gateway--or the gatekeeper.
Today, there are only 10,000 commercial Internet users in China, analysts say. Those who sign up for commercial services must register with the local police within 30 days of access. Commercial access in China is pricey. Roughly speaking, China's ISPs charge over $70 per month. However, most people in China barely make $40 per month.
China's ISPs, including ChinaNet, CIC, and others, are all run by various government agencies. No foreign ISPs are allowed. Hong Kong-based CIC, for example, is run by the Xinhua News Agency, China's official mouthpiece. CIC, which serves 30 provinces in China, also has a home page complete with databases to help "facilitate trade" with the country. CIC's databases, which include information on travel, freight, a
nd even home shopping, is on the Web in both Chinese and English.
Hong Kong Is Wired
Hong Kong's wheeler-dealer tradition extends to cyberspace. More than 60 ISPs of all shapes and sizes have emerged in Hong Kong--just in the last 24 months. There are four to six major ISPs serving more than 100,000 users, says Adam Judd, business manager of North-South Asia for Bay Networks. The remaining ISPs are smaller outfits, many of which operate out of their houses with a server, modem, software, and only a few accounts.
A large percentage of the ISPs in Hong Kong lease bandwidth from AT&T, Global One, Hongkong Telecom, and IBM. Hongkong Telecom, for example, basically runs the Hong Kong Internet Exchange (HKIX). It provides interconnection capabilities to the colony's ISPs; however, some Hong Kong providers have their own backbones.
To the outside world, Hongkong Telecom also has an E1 and 512-Kbps line extending to its parent company, Britain's Cable & Wireless. Cable & Wireless,
in turn, has a 10-Mbps link to the U.S. Hongkong Telcom is also part of a group that is building an Asian backbone. Separate E1 links have been recently deployed from Hongkong Telecom to Japan's KDD and CSL Japan. A 128-Kbps line runs from Hongkong Telecom to Singnet, an ISP owned by Singapore Telecom. An E1 link to Singnet is on the drawing board. (Singapore Telecom plans three E1 links and a T1 links to the U.S. and runs the Singapore Telecom Internet Exchange regional network, which has 14 ISP customers in Brunei, Indonesia, India, the Philippines, and Vietnam.) There are separate links from Hongkong Telecom to the phone carriers in Macao and Taiwan.
Hongkong Telecom is working on various links with Australia's Connect.Com, China's MPT, Malaysia's JaringNet, as well as undisclosed parties in the Philippines and Thailand. Last April, Hongkong Telecom stunned the market when it became an ISP. (Previously, it offered only leased lines to customers.) Hongkong Telecom's Internet service will come in thre
e phases. Initially, the service will provide not only access but will offer information and other services to its customers. Next, the company will focus on developing local content.
"The third phase will come in August when our customers can start doing their daily shopping from our electronic commerce offerings, as well as other interactive offerings," says William Lo, managing director for the company's ISP organization, Hongkong Telecom IMS.
Other ISPs in Hong Kong are unhappy. Hongkong Telecom's prices undercut the competition, many claim. Initially, Hongkong Telcom's ISP services run $6 per hour during nonpeak hours (not including local access fees). In contrast, one major ISP said it is charging $10 per hour (not including access fees).
Competitive ISPs are not standing still. Many are expected to wage a price war against Hongkong Telecom. Such a war could put the smaller providers out of business. Other providers are moving on a different front to become more competitive. Asia On-Li
ne, one of Hong Kong's largest ISPs, recently expanded its base by purchasing a majority stake in Pristine, a small Taiwanese ISP. The new company, called Asia On-Line Taiwan, gives Asia On-line a foothold in the large Taiwan market, says chief executive Wong.
Hong Kong Supernet, one of the colony's largest ISPs, also has ambitious plans. It is part of the recently formed consortium that is constructing the ABONE, which consists of separate T1 and E1 links from Hong Kong to Japan and Singapore to Japan, respectively. Sumitomo and IIJ are administering the links. There is an E1 connection in place between Hong Kong Supernet and Pacific Internet. Future links are being planned to run between Japan and Australia.
Taiwan's Lack of Bandwidth
Unlike Hong Kong, Taiwan's major problem in terms of commercial Internet access is lack of bandwidth. Taiwan currently has four major ISPs, including two government-sponsored organizations and some smaller, independent companies. One user reporte
d that he was able to get only three connections in as many months of service from Taiwan's largest ISP, dubbed HiNet, which is run by the DGT. Taiwan's academic community has been shielded from this. TaNet, a government-sponsored, academic-oriented network, has its own T1 line running from the island to Princeton University.
Late last year, Taiwan deregulated its telecommunications industry. The move opened the market up to some new and powerful ISPs, including IBM and Taiwan's two largest PC makers, Acer and First International Computer. Still, Taiwan's commercial Internet base is expected to more than double to 150,000 users by next year, prompting some chilling thoughts among the island's subscribers: more and more gridlock. Most blame the island's on-line congestion on HiNet. At present, HiNet has more than 70,000 customers, but up until recently, it had only a single T1 line running to the U.S. HiNet claims it has recently added another T1 line. Still, there's a problem: The island's four or so ot
her major ISPs do not have their own backbones; instead, they must lease bandwidth from HiNet, which is already bursting at the seams.
"We don't think Taiwan's network topology is reasonable," says Daniel Ongg, vice president of the Network Business Group for the government-sponsored Institute for Information Industry (III, in Taipei). III runs Taiwan's second-largest ISP, called SeedNet, which has a T1 line into HiNet. SeedNet hopes to spin off its Taipei-based ISP into a commercial company this year or next, Ongg adds.
New ISPs, including IBM, will undoubtedly shake up the market. "Our target is the business customer, but we will not overlook the individual," says P.Y. Wang, general manager of Global Communications Network Corp., the Taiwan ISP partner for IBM Global Network. IBM Global Network, which provides Internet services to more than 100 countries, will offer a range of products in Taiwan starting this summer. IBM recently deployed its own backbones in Taiwan, including a 540-Kpbs line to
Japan and a 192-Kbps pipe to Australia, Wang says. IBM is currently implementing similar topologies in Korea and Malaysia.
Huge Potential
It will take time before China, Hong Kong, and Taiwan are capable of supporting electronic business on the Internet, but the potential is there. The move to deploy Asia-wide backbones is accelerating Net commerce.
Many giant multinational firms see the potential: IBM, Microsoft, and others are pumping money into Asia's Internet development with a wide range of products and services. Of course, the question remains in Asia as well as the rest of the world: When will anybody start making money from Internet commerce?
1995
1997
Japan 1,600,000 3,500,000
South Korea 100,000 525,000
Malaysia 100,000 495,000
Singapore 100,000 495,000
Taiw
an 70,000 480,000
Thailand 35,000 140,000
Hong Kong 32,000 423,000
Philippines 20,000 150,000
Indonesia 10,000 100,000
China 15,000 200,000
Mark LaPedus is a BYTE contributing editor based in Taipei. You can reach him by sending e-mail to
5916955@mcimail.com
.
Asian Internet Fever
