TeleGeography says global network construction resurges

April 24, 2015

New data from TeleGeography’s Global Bandwidth Research Service reveals that international bandwidth grew 44% in 2014, to reach 211 Tb/s. The 65 Tb/s of new capacity deployed in 2014 is comparable to nearly the entire amount of bandwidth in service globally in 2011.

This rapid capacity growth is driven by a changing mix of global network operators. Private networks, particularly those of large content providers, account for a growing share of international bandwidth, even surpassing Internet bandwidth on the trans-Atlantic route last year. Consequently, network operation has become a core part of the business for some of the largest content providers.

With the largest content companies building their own networks, it might appear that little opportunity exists for traditional network operators. However, not all wholesale customers can achieve as large of a scale as content companies, leaving substantial demand for purchases of more granular increments of capacity.

Network operators are meeting bandwidth demand by both upgrading the capacity of existing cables and investing billions of dollars in new systems. New cables set to enter service in 2015 include Asia Pacific Gateway, Hibernia Express, the Pacific Caribbean Cable System, and Bay of Bengal Gateway. While Africa and Asia have accounted for the bulk of new submarine cable investments over the past three years, the focus of new investment is shifting, with more than $1 billion worth of new cables expected in Latin America and also on the Europe-Asia route by the end of 2016.

“Traditional wholesale carrier consortia are continuing to build global cable systems, even though content providers now play a major role in network development on core routes,” said TeleGeography research director Alan Mauldin. “While content providers and other large capacity users invest in new submarine cable systems to acquire large blocks of capacity, such as a fiber pair, at low cost, service providers build cables to improve route diversity, reach new or underserved markets, or secure competitive advantage.”

TeleGeography will hold its Global Submarine Cable Market Trends webinar on Tuesday May 5 at 11:30am EDT, 4:30pm BST. Here are some topics to be addressed:

  • What are the key drivers of international bandwidth demand?
  • How fast are content providers and other private network operators adding capacity, compared to Internet backbone operators? On which routes is most capacity being added?
  • How much unlit capacity remains on major routes?
  • Where are transport prices falling fastest?

Register for the 30-minute webinar and Q&A here.

In related news, Drew Fitzgerald in the Wall Street Journal reports that tech giants including Facebook and Microsoft are doing the heavy lifting of building the Internet. He writes, “The pair helped secure funding for a new cable called AEConnect between Ireland and the U.S., according to a person familiar with the matter.” Also, he writes, “Google has been an aggressive builder of network pipes. The company helped build a trans-Pacific submarine cable finished in 2010 and is in the process of funding another one.”

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