Facebook Blogging

Edward Hugh has a lively and enjoyable Facebook community where he publishes frequent breaking news economics links and short updates. If you would like to receive these updates on a regular basis and join the debate please invite Edward as a friend by clicking the Facebook link at the top of the right sidebar.

Sunday, March 02, 2003

Catching Up With the Curve

For once something which seems like good news for Telecoms. People have been predicting for some time now that all that late ninetees excess capacity would be burnt off at some point. Clearly the growth of broadand based data transfer will have an important impact, it's all a question of when (and if) the uptake in demand accelerates past the continuing expansion in capacity: put simply, when user end demand growth overtakes Moore's Law type supply growth. I don't hold much store by projections in this area (it's difficult to forget what Forrester and Jupiter were saying in the late ninetees), but downsizing the IDC report for exaggerations a bit, this latest piece does seem plausible. After all, if anyone can make money from the internet business, it ought to be those who supply the connections, and their equipment suppliers. But also don't fail to notice the suggestion that mobile bandwidth will not account for an enorous part of the data transfer market, predictable bad news this for the mobile phone industry. (Do not go gentle into that good night, Old age should burn and rave at close of day; Rage, rage against the dying of the light. From 'An Ode to 3G' by Dylan Thomas).

IDC predicts that the volume of Internet traffic generated by end users worldwide will nearly double annually over the next five years, increasing from 180 petabits per day in 2002 to 5,175 petabits per day by the end of 2007. To put these figures into perspective, the entire printed collection of the Library of Congress amounts to only 10 terabytes of information. By 2007, IDC expects Internet users will access, download, and share the information equivalent of the entire Library of Congress more than 64,000 times over, every day. "Some industry observers have speculated that slowing growth in Internet traffic is at the root of the current telecom malaise, but IDC research shows that not only is Internet traffic growth strong, but it will continue at near triple digit rates over the next five years," said Sterling Perrin, senior research analyst, Optical Networks at IDC. This has some interesting implications for telecommunications equipment suppliers, particularly in the optical market. "As long as the total amount of voice and data traffic on the network continues to increase, then the need will arise for carriers to buy equipment, such as next-generation optical, that transports and manages it cheaper and more efficiently than the earlier generation of pure SONET-based products," said Perrin. The IDC study finds that, although growth in the number of Internet users will continue to be an important traffic driver, the migration of those Internet users to bigger access pipes will be even more significant. In particular, broadband adoption by consumers around the world will make this the fastest growing and largest segment in terms of Internet traffic volume generated. By 2007, IDC believes that consumers will account for 60% of all Internet traffic generated, versus roughly 40% for business users. Mobile Internet users are expected to have only a minimal impact on overall traffic volume during the forecast period.
Source: Light Reading

No comments: