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It goes too far to say there were no adverse consequences of the global recession on the world’s global bandwidth providers. But if one knew nothing about that, and looked only at the amount of bandwidth crossing the globe, one would not have known.

 

Nor would you have been able to detect anything in particular about end user demand by looking at bandwidth pricing, which continues to decline, on a cost-per-bandwidth basis, as it has for decades.

 

The global recession has had no impact on international Internet bandwidth demand, says Stephen Beckert (News - Alert), TeleGeography strategy vice president.

 

The pricing trends are at least in part dictated by international Internet bandwidth supply that generally shows no signs of strain, with plenty of unlit capacity ready to come on line as needed. As always is the case, there is more capacity on some routes, compared to others.

 

Bandwidth growth has run at about 60 percent a year for the past three years, requiring capacity to double every 18 months.

 

But TeleGeography (News - Alert) estimates just 13 Tbps of the 53 Tbps of potential transatlantic capacity has been lit, with just 10Tbps of that sold onward to customers. And just 4.6Tbps of that lit capacity is actually in use.

 

Traffic types continue to evolve, as well. At one point several years ago peer-to-peer traffic was the largest contributor to traffic growth. These days, video tends more often to have shifted to HTTP delivery, because of the amount of video traffic driven by Web sites. About 41 percent of Internet traffic is HTTP-based video, for example, with about eight percent of total Internet usage driven by steraming services.

 

Capacity prices have declined about 70 percent over the past decade and nobody seems to think that will change.

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“Prices really only go in one direction, and that’s down,” Beckert says. Voice no longer is the driver of global bandwidth demand, but mobile traffic has grown between 12 percent and 16 percent over the last few years, Beckert says.

 

One development bandwidth executives are watching is the rate of new capacity supply, as much of the pricing environment is driven by the relationship between bandwidth supply and demand.

 

New cables are coming online at rates “comparable to the peak of the boom” at the turn of the century, Beckert says. The industry added 14 cables last year and 15 the year before. It’s expected to see another 13 come on line by December 2010. That was a severe problem for bandwidth prividers as the supply glut caused severe pricing pressure.

 

The good news is that the cost of adding new capacity is about a fifth of 2001 bubble levels, thanks in part to shorter cables and a preference for single-span systems instead of costlier rings.

 

“Every operator we’ve surveyed is adding capacity to their networks,” Beckert says.

 

Overall, the conclusion is that bandwidth demand has not been affected in a negative way by the past two years of global economic stress. Demand keeps growing and prices, which generally are expected to decline, behaved as predicted.