Fueling Subsea Bandwidth Demand: Demand Drivers and Internet Traffic Growth By Alan Mauldin
Since the late 1990s, Internet capacity requirements have emerged as the principal source of overall bandwidth demand. As a result, gauging the pace of Internet traffic growth plays a pivotal role in understanding demand for submarine bandwidth. International Internet traffic growth took a somewhat surprising turn in 2006, as traffic growth reaccelerated on many routes. Based on data TeleGeography collected directly from providers during 2006, aggregate average international Internet traffic grew 75 percent annually, a significant jump over the 50 percent growth rate during 2005. TeleGeography’s latest research also shows that traffic growth outpaced the rate of underlying IP capacity deployment in the past year, leading to higher utilization levels on international Internet backbones. Global average traffic utilization levels increased from 28 percent to 33 percent, while peak utilization rose from 43 percent to 47 percent. This is a positive development for submarine cable operators, since higher utilization is a harbinger for future bandwidth purchases. Traffic Drivers What is fueling the rapid pace of Internet traffic growth? It is no secret that the total amount of traffic generated by end-users has increased dramatically as consumers have switched from dial-up modems to higherbandwidth technologies such as DSL and
cable broadband. During 2005 the total number of broadband subscribers in the world rose 37 percent, to more than 221 million. Not only are the numbers of subscribers growing, but so is bandwidth available per subscriber. No longer does broadband just mean a 768 Kbps DSL line, but speeds of 10 Mbps, 20 Mbps, and even 100 Mbps connections are now possible in for many subscribers. Increased local access speeds would have no effect on Internet traffic if there were no applications encouraging broadband subscribers to make use of their new connectivity. In addition to reporting total volumes of traffic on Internet networks, carriers surveyed by TeleGeography were also asked to report the share of traffic various end-user applications accounted for on their networks. The applications driving traffic on IP networks vary substantially among providers. However, it is clear than video content, whether downloaded from the Web, accessed through a file-sharing application, or streamed live has become the largest consumer of network capacity. Our data reveal that Web and peer-to-peer (P2P) file sharing are the two dominant types of traffic, accounting for more than two-thirds of total traffic on many networks. The share of P2P traffic on Internet backbone networks has surpassed Web traffic according to many providers surveyed by TeleGeography. In fact 28