International Telecom Bandwidth: the state of the Market’s Drivers, Opportunities and Challenges by Thomas A. Soja
reinforcing the argument against the proponents of a capacity glut, caused by excess fiber deployment. Moreover, capacity utilization is not uniform throughout the world, but varies from region to region. Thus, there exist pockets of capacity oversupply as well as shortage worldwide. Accordingly, vigorous growth in international bandwidth has not been foreclosed, but continues unabated, powered by various factors, generally described as “bandwidth growth drivers.” A simple enumeration and description of the principal bandwidth growth drivers is insufficient to provide a conceptual framework of bandwidth growth. Such a framework must begin with the recognition of dramatic advances in fiber and transmission technologies. Such advances and their corresponding impact on reducing product unit costs are the first step in the “Virtuous Cycle of Demand.” The Virtuous Cycle of Demand begins with technological advance, which acts to increase bandwidth available per dollar of invested capital. This leads, in turn, to an overall reduction of bandwidth cost to the end user and stimulates growth in additional bandwidth usage. Increased bandwidth usage encourages the entry of new carriers and entrepreneurs to service the need for additional capacity and stimulates
IN THE THIRD quar ter of 2001, the USA is experiencing a significant slowdown in business activity punctuated by dismal corporate profits, rising unemployment and increasing bankruptcies, particularly in the dot.com and telecommunications sectors. This has led some commentators in the financial sector to wring their hands at the prospects of limited bandwidth growth, which until recently was described as vigorously robust to the point of explosiveness. Can it be, that as suddenly as it began, the bandwidth boom is over; replaced by worldwide overcapacity, often described as the “bandwidth glut?” To paraphrase Mark Twain’s remarks regarding rumors of his premature demise, reports of the death of bandwidth growth have been greatly exaggerated! International carriers are even now planning bandwidth acquisitions to meet anticipated capacity needs over the next three years and even longer, in spite of the large volume of deployed fiber in the ground and, to a lesser extent, undersea. But, as many have mistakenly surmised, the amount of deployed fiber is not a true measure of capacity. It is when fiber is activated, or “lit”, and transmission initiated, that capacity requirements can be fulfilled. Currently the percentage of lit fiber is fraction of the total deployed, 9