The combined effects of new internet-enabled devices, growing broadband penetration in developing markets, higher broadband access rates, and bandwidth-intensive applications will continue to fuel strong internet traffic growth.
While end-user traffic requirements will continue to rise, not all of this demand will translate directly into the need for new long-haul capacity.
A variety of factors shape how the global internet will develop in coming years.
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.
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 expect that 400 GigE will emerge in two to three years as a significant part of the market.
We already see a major shift from 10 GigE requirements to 100 GigE requirements, and expect that 400 GigE will emerge in two to three years as a significant part of the market.
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.
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.
The largest content providers have long operated massive networks. These companies continue to experience more rapid growth than internet backbones and 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.
In our Global Internet Geography Research Service, we analyze the meaning of our robust internet capacity and traffic data sets. We also discuss factors impacting IP transit pricing and the role individual backbone operators play.
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