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Digital Infrastructure

Bandwidth demand set to rebound: TeleGeography

Bandwidth demand on the key trans-Atlantic route is likely to rebound this year, with TeleGeography analysts predicting growth of around 30%.

Tim Stronge, VP of research at TeleGeography, said that while trans-Atlantic capacity grew 25% last year to around 450Tbps, this was a "fairly dramatic deceleration" from the previous three years when consumption grew at around 60%.

He said the Atlantic corridor, the world's most heavily-trafficked cable route, is usually a harbinger of demand in other parts of the world. But he pointed out that while growth in demand slowed in 2021 – mainly due to component supply issues – that still meant an extra 90Tbps was added.

Bandwidth growth in the short term will be driven by over-the-top giants connecting new data centers in Europe and the US.
 (Source: Sybille Reuter/Alamy Stock Photo)
Bandwidth growth in the short term will be driven by over-the-top giants connecting new data centers in Europe and the US.
(Source: Sybille Reuter/Alamy Stock Photo)

"To put that into context, 90Tbps would have been more than enough to accommodate all new cables and upgrades across the Pacific, US-Latin America, and Europe-Middle East combined. It's an amazing amount of capacity," Stronge told an online event last week.

He said TeleGeography was anticipating a "re-acceleration of growth" in 2022, with a forecast of an additional 136Tbps in capacity.

"The fact is it's really difficult to accommodate this scale of growth," Stronge said. "You need not only a lot of cards, SLTs for existing cables but we have been needing and are going to need new cables."

A 'huge market'

Stronge said growth in the short term would be driven by over-the-top (OTT) giants like Facebook and Amazon, which now dominate the global bandwidth business, connecting new data centers in Europe and the US.

"So we think there will be robust growth for the next several years across the Atlantic," he said.

The OTT firms now account for two-thirds of all international subsea traffic – up from 6% in 2010, according to TeleGeography. That made the addressable market for third-party wholesalers on the Atlantic route around 13%, Stronge said. That might seem small but not in the context of the total route capacity of 445Tbps.

"It's huge," he said. "58Tbps is the addressable capacity that could be captured by traditional wholesalers [in 2021]. That's 5800 gigawaves. There's definitely still a market for wavelengths across the Atlantic and it's really large."

Stronge said prices were falling steadily on global cable routes, although the declines had slowed in recent years. Over the period from 2018 to 2021, the price of a 100Gbps wavelength was down 7% on the LA-Tokyo route, 12% on London-Singapore and 17% between Miami and Sao Paulo.


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The London-New York price had fallen 18%, although Stronge said the recent addition of fresh capacity had pushed some prices higher, as often happens with new cables with a small number of customers.

Looking ahead, the continued advances in new cable technology make it likely that fiber pairs could soon be a unit of wholesale capacity, Stronge said. "But we're not there yet," he added.

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— Robert Clark, contributing editor, special to Light Reading

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