Recession? What Recession?

April 28, 2010

New data from TeleGeography’s Global Bandwidth Research Service show that international network operators have weathered the recession surprisingly well. International bandwidth usage increased 60 percent in 2009, in line with the past two years, and well ahead of the trend of 2002-2006. Growth has been particularly rapid in the Middle East, Africa, and Latin America. However, capacity requirements to seemingly mature markets, such as Europe and the U.S., have also grown at a compounded annual rate of more than 50 percent since 2002.

Over the past seven years, aggregate international capacity requirements have grown more than 22-fold. Providers have kept pace with high demand by rapidly upgrading their fiber-optic networks with additional wavelengths. Nearly 90 percent of U.S. terrestrial network operators surveyed by TeleGeography plan on lighting extra wavelengths in 2010, and just under 70 percent of European carriers plan on doing so.

International Bandwidth Usage, 2002-2009 worldwide-intl-bandwidth-growth.png

The scope to expand submarine cable capacity is far more limited than that of terrestrial networks. High demand has combined with a relative scarcity of bandwidth to drive technological innovation, according to TeleGeography analyst Tim Stronge. "Some undersea cable operators have managed to install far more wavelengths on existing cables than thought possible even just a few years ago," noted Stronge. "Providers are also exploring ways to squeeze additional capacity out of their cables by replacing 10 Gbps wavelengths with 40 Gbps wavelengths."

Growing capacity requirements, combined with carriers’ desire for improved route diversity, have also spurred a boom in submarine cable construction. Seventeen new cables were built in 2009, and investment in submarine cable construction in 2010 is projected to top last year’s levels.

TeleGeography’s Global Bandwidth Research Service provides the most detailed analysis of the long-haul network and submarine cable industry available—including supply, demand, costs, and pricing analysis and profiles of 272 network operators and 228 submarine cables.

To speak to an analyst, please call 202-741-0040, or email tstronge@telegeography.com.

To download the executive summary of Global Bandwidth, please visit our website.