Bandwidth Glut v2.0: TeleGeography Adds Up the Numbers.Business Writers/Hi-Tech Writers WASHINGTON--(BUSINESS WIRE)--April 12, 2001 It has been a tough year for bandwidth investors. Just one year ago, many telecom analysts foresaw a nearly limitless pool of demand for bandwidth, driven by exponential increases in Internet use and high-bandwidth applications such as videoconferencing A real time video session between two or more users or between two or more locations. Although the first videoconferencing was done with traditional analog TV and satellites, inhouse room systems became popular in the early 1980s after Compression Labs pioneered digitized video systems . The crash of the technology sector has since cast these projections in doubt. In its new report, _International Bandwidth 2001_, TeleGeography (http://www.telegeography.com) compares "bottom-up" demand models with original "top-down" research. The Washington, DC-based research group has carefully analyzed the popular approaches for predicting end-user demand -- and tested them against actual network deployment. "An initial glance at the results of our analysis may frighten some investors, but a closer look will comfort others," explains Tim Stronge, Director of Research. Most models forecast demand based on end-user traffic. To test the accuracy of this approach, TeleGeography built an historical inventory of bandwidth actually used in voice and data networks. Alarmingly, TeleGeography's research shows that real bandwidth deployments are far smaller than predicted. For example, one demand model estimated that trans-Atlantic Internet capacity would equal 175 Gbps in 2000; TeleGeography's survey data from that year found that aggregated Internet backbone (communications, networking) Internet backbone - High-speed networks that carry Internet traffic. These communications networks are provided by companies such as AT&T, GTE, IBM, MCI, Netcom, Sprint, UUNET and consist of high-speed links in the T1, T3, OC1 and OC3 ranges. capacity only reached a third of that number. Moreover, TeleGeography's inventory of "used" capacity seems frighteningly small when compared to the vast supply of lit capacity. In 2002, TeleGeography projects that the supply of trans-Atlantic bandwidth will total 3,494 Gbps. Even if Internet backbones A group of communications networks managed by several commercial companies that provide the major high-speed links across the country. ISPs are either connected directly to these backbones or to a larger regional ISP that is connected to one. quadruple quad·ru·ple adj. 1. Consisting of four parts or members. 2. Four times as much in size, strength, number, or amount. 3. Music Having four beats to the measure. n. in size, and other networks experience double-digit growth, bandwidth deployed by carriers and ISPs will amount to only 532 Gbps. In other words Adv. 1. in other words - otherwise stated; "in other words, we are broke" put differently , used bandwidth will account for less than 20 percent of estimated supply. Yet the amount of used bandwidth comprises but a piece of the bandwidth glut glut pronounced as rut, slut Vox populi An excess of a service or skilled labor in a particular area. See Physician glut. puzzle. Companies such as Global Crossing (NYSE NYSE See: New York Stock Exchange :GX), 360networks (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :TSIX TSIX Trusted Security Information Exchange TSIX Transcription silencing inactivation of X (chromosome/dosage compensation) ), and TyCom (NYSE:TCM (1) (Trellis-Coded Modulation/Viterbi Decoding) A technique that adds forward error correction to a modulation scheme by adding an additional bit to each baud. TCM is used with QAM modulation, for example. ) are reporting capacity sales far beyond actual deployment of voice and data networks. "The reason," explains Stronge, "is that a lot of capacity is being purchased but held in reserve." Service providers often have compelling motivations to acquire more capacity than they actually need. A carrier may purchase excess capacity to satisfy redundancy requirements; such requirements protect the network in case of an isolated outage out·age n. 1. A quantity or portion of something lacking after delivery or storage. 2. A temporary suspension of operation, especially of electric power. . Bandwidth buyers may also take advantage of large bulk purchase discounts to provision for future growth. The ratio of idle to used capacity may even increase over the next year, to the benefit of bandwidth providers.
Trans-Atlantic Network Deployment vs. Supply, 2001-2004
2001 2002 2003 2004
Projected Network Deployment 214 532 1,264 2,769
(Trans-Atlantic, Gbps)
Supply of Lit Bandwidth 1,842 3,494 5,648 7,446
(Trans-Atlantic, Gbps)
Note: Scenario for network deployment growth assumes that Internet
provisioning growth will slow from 200% to 100% per year. Other
networks assumed to grow 40-60% per year. Source: TeleGeography, Inc.
_International Bandwidth 2001_ is the second edition of TeleGeography's definitive guide to bandwidth supply and demand. The 400-page report provides quantitative analysis Quantitative Analysis A security analysis that uses financial information derived from company annual reports and income statements to evaluate an investment decision. Notes: of bandwidth trends, plus strategies for optimizing bandwidth investments. _International Bandwidth 2001_ also contains detailed profiles of over 150 major submarine, terrestrial, and satellite communications systems. Other sections include primers on fiber optic technology, satellite provisioning, bandwidth traders, and network ends. For more information, please contact: Jessica Marantz, Marketing & Business Development Tel: +1 202 467 0853 jmarantz@telegeography.com Tim Stronge, Research Director Tel: +1 202 467 0852 tstronge@telegeography.com http://www.telegeography.com About TeleGeography: TeleGeography, Inc. is the authoritative source for international telecom statistics and analysis. An independent subsidiary of Band-X Ltd., TeleGeography publishes reports and maps used by thousands of leading communication companies, consultancies, and financial institutions in over 100 countries. TeleGeography's flagship report -- the self-titled TeleGeography series -- has been published annually since 1989. |
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