As 2020 comes to a close, I thought it was worth looking at changes in the subsea cable landscape. Two years ago I gave a presentation that predicted a coming “extinction” of older cables.
We’re beginning to see signs of this in the market.
Be honest: do you actually know how many kilometers of submarine cables live under the ocean? Do you know the obscure locations that got a new cable in 2020? Or what actually damages cables? (Don't say sharks.)
Will COVID-19 leave a lasting mark on the global internet?
Based on discussions and surveys with dozens of network operators around the globe, we believe that COVID-related expansion in internet traffic and bandwidth is largely a one-off phenomenon. It seems likely that the trends we've observed in recent years will largely continue.
The global outbreak of COVID-19 and its associated economic and social impact has laid bare the crucial, irreplaceable role that the internet plays in our daily lives.
Starting in March 2020, internet traffic patterns shifted and volumes surged as students around the world learned from home, adults worked from home, and everybody did at least something from home.
To its enormous credit, the internet bent but—for the most part—did not break as network operators scrambled to deal with the swell in traffic.
Early in the calendar year is map design season around TeleGeography. Colorful proofs arrive at the office, which the design team pores over, so as not to miss any details. No cable left behind. No design flourish left unexamined.
So when the DC office packed up and transitioned to remote work in March 2020, we were left to wonder: how were we going to finish our cable map from within quarantine?
What does the future hold for the global bandwidth market?
The two most predictable trends are persistent demand growth and price erosion. Beyond that, operators will have to navigate the major uncertainties of an evolving sector and a global pandemic.
Here are a few of the key trends from our Global Bandwidth Research Service, among many, that will affect the long-haul capacity market in the coming years.
With the update of data and analysis within our Global Bandwidth Research Service comes a refreshed look at our network pricing intel.
Yes, operators are racing to keep revenue margins ahead of eroding prices, while bandwidth demand and supply continue to grow across global routes. Abundant supply and increasing competition have led to this robust price erosion throughout the global bandwidth market.
New 100 Gbps-equipped submarine cable systems and upgrades to existing networks have further lowered unit costs. And this has driven down both 10 Gbps and 100 Gbps wavelength prices. Across critical global routes, weighted median 10 Gbps and 100 Gbps prices fell an average of 14% and 23% compounded annually since 2016.
The global outbreak of COVID-19—and its associated economic impact—has amplified the role played by the international telecommunications industry and the bandwidth market that underpins it. The global bandwidth market has always been marked by change and uncertainty, and the current crisis is just an extreme example of this.
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