Looking back at Internet bandwidth growth over the last four to five years, we see some pretty exciting numbers. An expanding user base, proliferation of smart devices and new services are catalysing this growth. It presents a challenge to service providers, who need to keep pace with this hunger for bandwidth. TeleGeography's Global Internet Geography research reveals that international Internet capacity growth fell to the slowest pace in five years, decreasing from 68 percent in 2008 to 40 percent in 2012 but that is still a large number. It also presents a huge opportunity for the providers.
I think once you consider that next year's growth will be another increase of 40-60 percent, it shows the network needs to be ready. The compound growth rate, year-on-year, becomes a very large amount of data, data that needs to be moved efficiently across telecoms networks.
This growth rate of more than 40 percent has been seen consistently over the past four years, and I'm often asked if this should have been anticipated. I would say yes. When video started to become a tangible entity on the network we saw huge uptick across the networks, particularly with the advent of platforms such as YouTube. Coupled with increasing penetration rates in emerging markets, we should have anticipated an explosion in demand for bandwidth. In certain areas of the world, for example India, Asia and South Africa, we are seeing a growth rate of 100-120 percent thanks to improved infrastructure, and new services such as mobile money.
Demands of emerging markets
Over the next three to seven years, we can safely assume that the demands placed upon networks will be driven by the dramatic increase in Internet and mobile penetration in emerging economies.
But as these emerging markets mature they will begin to mirror more developed ones. The growth won't come from increased subscribers, but from new services that eat up bandwidth, especially video. Emerging markets will begin to demand greater quality two-way video, higher speed data services, and more data hungry applications.
Service providers need to prepare for this. They need to cost effectively increase the capacity of their network in a significant way. They need to ensure that their network has a robust infrastructure. The lessons learnt over the last few years need to be digested and analysed and they need to understand how they can future-proof their provisions to ensure they can deliver the services demanded on their network, to the level of quality required.
John Hayduk is president, Product Management and Service Development, Tata Communications.
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