Hold on, let me quickly grab my crystal ball.
Okay. Now that I've got that, let's see what it says about the future of the global internet. (And let's all agree that by "crystal ball" I mean "notes from our 2021 Global Internet Geography update.")
The combined effects of new internet-enabled devices, growing broadband penetration in developing markets, higher broadband access rates, and bandwidth-intensive applications are poised to continue fueling strong internet traffic growth.
While end-user traffic requirements will continue to rise, not all of this demand is going to translate directly into the need for new long-haul capacity.
As my trusty crystal ball sees it, a variety of factors will shape how the global internet develops in the coming years. Here are a few worth keeping your eye on.
Post-COVID-19 Growth Trajectory
Initial evidence suggests that the spike in the rate of bandwidth and traffic growth in 2020 from the pandemic was a one-time event and we have largely returned to more traditional rates of growth.
Operators we spoke to indicated they no longer see the pandemic leading to upward adjustments to their demand forecasts.
IP Transit Price Erosion
International transport unit costs underlay IP transit pricing. As new international networks are deployed, operational and construction costs are distributed over more fiber pairs and more active capacity, making each packet less expensive to carry.
We already see a major shift from 10 GigE requirements to 100 GigE requirements. And we expect that 400 GigE requirements will emerge in 2021 and comprise a substantive proportion of the market within three years.
The introduction of new international infrastructure also creates opportunities for more regional localization of content and less dependence on distant hubs. As emerging markets grow in scale, they too will benefit from economies of scale, even if only through cheaper transport to internet hubs.
International vs. Domestic
While there’s little doubt that enhanced end-user access bandwidth and new applications will create large traffic flows, the challenge for operators will be to understand how much of this growth will require the use of international links.
In the near-term, the increased reliance on direct connections to content providers and the use of caching will continue to have a localizing effect on traffic patterns and dampen international internet traffic growth.
Bypassing the Public Internet
The largest content providers have long operated massive networks; these companies continue to experience more rapid growth than internet backbones and they are expanding into new locations.
Many other companies—such as cloud service providers, CDNs, and even some data center operators—are also building their own private backbones that bypass the public internet. As a result, a rising share of international traffic may be carried by these networks.