The dramatic spikes in global Internet usage sparked by the pandemic are now well documented. What's also becoming clear is that traffic has started to level off as workers, students and others get used to doing things from home.
While it's difficult to find exact, comprehensive figures, it's clear that as a result of COVID-19 Internet traffic is up generally by 30% to 50% on wired networks – but only up slightly on wireless networks, at least in developed markets – and that "peak" usage hours are no longer restricted to TV in the evenings but now stretch throughout the day due to videoconferencing, gaming and other activities.
Now, though, the big question is: What's going to happen next?
Should network operators prepare for a "new normal" where society's general transition to broadband and digitization has been sped up by at least a decade? Or should they breathe a sigh of relief that things may soon return to normal, and their traffic ought to as well?
If it's the former, they'll need to start reinforcing their networks pronto. But if it's the latter, an increase in network investments now might ultimately prove unnecessary at least and wrongheaded at worst.
Wendell Weeks doesn't have an answer to this question, but he did put some context around it. And what he says matters: For the past 15 years, Weeks has been CEO of Corning, widely regarded as the world's leading supplier of fiber cabling. Such wires generally form the backbone of the world's telecommunications network.
"The way telecommunications companies work is ... they build ahead of perceived demand. Depending on the company, they use different algorithms for how they figure it out, but in general, they try to be about 18 months ahead of where they think demand will be," Weeks said this week during his company's quarterly conference call with investors, according to a Seeking Alpha transcript of his results. "And that's the reason that the telecom network has held up pretty well as we face this surge in traffic, is – they basically went through that excess that they carry to prepare for the next 18 months."
Weeks explained that Corning is expecting operators to continue investing "pretty strongly" so they can "re-establish that safety net."
But the real question, Weeks concluded, is: "What's the baseline? If we're on a new baseline, then everybody's plans aren't aggressive enough."
Some operators appear to believe that, as stay-at-home orders lift and life returns to some kind of normal, Internet traffic will not decline as a result.
"I don't think we're going to see a normal situation by the end of the year," Verizon CEO Hans Vestberg told Axios. "I think there's going to be a new enterprise. It's a new way to work."
Verizon, for its part, has already raised its network investment budget by $500 million for 2020. However, that's a relatively paltry sum considering the operator spends around $18 billion on capital expenses every year. Further, no other US operator has yet pledged a similar capex increase.
However, in a broader sense, there are already indications that some things may be different, permanently. For example, the head of Universal movie studio indicated that, based on the success of the Trolls World Tour digital movie release during the pandemic, the company may release additional big-budget movies digitally at the same time they hit theaters.
Similarly, the big Game Developers Conference trade show for the video game industry had been rescheduled for the summer, presumably when the pandemic was over, but is now being recast as a completely virtual event.
Both of these developments will generate extra, new Internet traffic.
Whether this is all temporary or permanent will depend a great deal on whether Universal, GDC and others are successful. And that will ultimately determine the Internet's new traffic baseline.