Recession Can't Touch Strong Internet Growth

The global recession has certainly wreaked havoc on a number of industries, not the least of which is the telecommunications market. While certain vendors and providers have had to re-examine their strategies to determine how best to survive among the financial chaos of the economy, one area has continued to grow and prosper.


According to TeleGeography’s CommsUpdate, international Internet traffic growth shows no signs of slowing. New data indicates international traffic growth grew as much as 79 percent in 2009, up from 61 percent in 2008.

Emerging markets proved to have the strongest growth. Markets such as Eastern Europe, South Asia and the Middle East had traffic growth of well over 100 percent in 2009. Mature markets were not to be left in the dark as they also produced rapid growth. Peak volumes of traffic emerged in international links connected to the U.S. and Canada showed increases of 59 percent in 2009.

 

A number of industry experts and market watchers anticipated that the recession would cause carriers to have to cut back on infrastructure spending, which would cause growing network congestion. This fear has proven to be unfounded.

“While some operators have postponed network upgrades, investments in new capacity have continued, and aggregate peak utilization remains well within historical ranges,” said TeleGeography Research (News - Alert) Director Alan Mauldin, in a statement.

 

For instance, aggregate peak use on Asian networks increased from 56 percent to 62 percent between 2008 and 2009. Aggregate peak use level on Asian Internet links however, was lower in 2009 than in 2006, even though traffic volumes have quadrupled since 2006.

 

Upgrading Internet backbones in light of traffic growth is not a new concept in the industry. The annual growth rate of international Internet capacity since 2007 has exceeded 60 percent. In 2009, international internet bandwidth increased 64 percent and network operators added 9.4Tbps of new capacity. This new capacity exceeded the 8.7Tbps that was required just two years prior.

This consistent growth is not entirely surprising, given the perceived value from Internet access – even for those who may not have the funds to support it. Aside from the information gathering purposes the Internet provides for both professional and personal projects, it also provides a link to social groups. In fact, social networking is proving to be growing three times the rate of Internet growth in terms of time spent online.

The world continues to shrink as more and more people seek the tools the Internet provides in terms of professional and personal development. Infrastructure continues to be a core investment and businesses continue to expand their online reach. There will eventually be a plateau. Carriers will need to explore additional revenue streams to help pave the way as social networking sites provide increased demand. So far, the future still looks bright.