WASHINGTON -- Five years of frenzied network construction have resulted in a 21-fold increase in trans-Atlantic bandwidth and a 23-fold increase in trans-Pacific bandwidth, according to a recent report from research group TeleGeography, Inc. Companies such as Global Crossing blazed trails across the world's oceans, but suffered when demand failed to increase as quickly as hoped. In the past year, investor sentiment has shifted from irrational exuberance to profound skepticism. However, TeleGeography's research indicates that, although far less spectacular than once assumed, bandwidth demand growth remains robust. According to estimates based on reported capacity sales, the amount of purchased transoceanic submarine bandwidth roughly doubled in 2000 and 2001. TeleGeography's recent report, entitled "Submarine Bandwidth 2002," documents a number of factors that may provide hope for the bandwidth industry:
Internet network bandwidth, which accounts for the majority of capacity purchases, roughly quadrupled in 1998 and 1999 and tripled from 2000 to 2001.
There are growing indications that bandwidth prices are finally stabilizing on some routes, particularly on trans-Atlantic routes.
Construction of new cables has slowed sharply, with only two cables scheduled to be deployed during 2002, one each in the Atlantic and Pacific.
"In the short term, demand could not keep up with the extraordinary increases in network capacity," explained Mauldin. "The current market turmoil obscures the fact that demand for bandwidth has continued to grow rapidly." TeleGeography Inc.