IP capacity: Growth still strong, but slowing

Joseph Waring
Telecom Asia
International internet capacity continued to increase at a brisk rate - aggregate backbone bandwidth more than doubled in the past two years - but the growth rate slowed for the fifth consecutive year, dropping to just 40% from just under 70% back in 2008.
 
According to a recent report from TeleGeography, international internet capacity jumped from 37 Tbps in 2010 to 77 Tbps in Q2.
 
The research firm's annual survey of internet backbone operators found that the decelerating network capacity growth rates are mirrored in declining rates of peak and average international internet traffic growth.
 
TeleGeography reported that average international internet traffic grew 35%, down from 39% last year, and peak traffic grew 33%, well below the 57% increase recorded in 2011. The firm noted that global average and peak utilization rates dipped slightly in 2012, as the rate of bandwidth growth outpaced increases in underlying average and peak traffic levels.
 
The report said the modest decline in utilization rates is not unusual. In the past five years, peak utilization rates have fluctuated within a fairly narrow band.
 
While some operators have predicted that soaring traffic would overwhelm networks, TeleGeography noted that this has not proven to be true on international links. "Steady investment in new capacity has contributed to remarkably stable levels of average and peak traffic utilization on international networks."
 
The question is if the steady decline since 2008 will continue for the foreseeable future or will it be reversed by say a surge in mobile video traffic.
 
TeleGeography research director Alan Mauldin told Telecom Asia that forecasting growth rates is tricky. "I'm not sure I'd say it'd be the same rate of decline. I suspect the slowing rate of growth will continue in many countries, but annual growth can be lumpy with strong growth in one year followed by slower growth the next year."

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