International Internet Traffic Growth Slows, But Market Remains Healthy

October 01, 2007

New data from TeleGeography’s Global Internet Geography study show that international Internet traffic grew 57 percent from mid-year 2006 to mid-year 2007, down from 74 percent growth in the previous 12 months. The slowdown was not limited to any single region. Growth rates declined modestly in Asia, Europe, and on the trans-Atlantic and trans-Pacific routes; the sole exception to this trend was between the U.S and Latin America, where growth accelerated to 87 percent, up from 72 percent the previous year.

Despite the easing pace of growth, backbone operators have continued to add capacity to their networks at a healthy pace: international Internet bandwidth grew 68 percent, up from 46 percent in the previous year. The investment in new capacity was needed to address steadily rising network utilization levels. Since the increase in Internet service providers’ network capacity exceeded traffic growth, network utilization levels eased somewhat on key routes.

“While traffic growth slowed a bit this past year, most industries would be thrilled to experience demand growth of more than 50% annually,” says TeleGeography analyst Alan Mauldin. “Thanks to stabilizing prices and continued traffic growth, the outlook for the international Internet backbone market is better than it has been in years.”

TeleGeography’s Global Internet Geography research provides in-depth analysis of international Internet backbone capacity, traffic and pricing. To download the executive summary of TeleGeography’s Global Internet Geography study, please visit: http://www.telegeography.com/research-services/global-internet-geography/.

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