By Theresa Foley

Where is the global bandwidth business headed in the next few years? Global traffic patterns are changing as the Internet grows in usage and data overtakes voice with regard to services being transmitted. Bandwidth and traffic are increasing at exponential rates, affecting nearly all aspects of business and many aspects of culture around the world.Satellites play a small but important role as a link in the bandwidth pipeline.

Greg Staple, founder of Telegeography, which tries to keep tabs on bandwidth trends, says more bandwidth appears to be planned than demand requires. As the traffic grows, so are planned fiber and satellite systems–in fact, more than may be needed, TeleGeography finds. “International submarine cable capacity has doubled each year since 1996, and the trend will only accelerate over the next few years,” Staplesays. Part of the reason is the fiber building boom, and with fiber cables, unlike satellites, “changes can be made at the ‘dry end’ of the submarine cable systems that will double the system’s capacity with minimal downtime,” according to Jason Kowal, president of TeleGeography.

The “East-West” corridors, referring to fiber or satellite links running in those directions between the North American, European and Asian continents, grow fatter and fatter. But in the “North-South” direction, the only place of tremendous growth is the Miami to Latin American corridor. Staple says satellites have an advantage for North-South traffic, particularly in thin routes.

The highest demand will be found in places like the New York-London, London-Paris, or Los Angeles-Tokyo corridors, and satellites will continue to be able to meet Internet connection needs in the short run between those places. Staple says satellites also may be able to carve out a bigger role in backing up the new, higher capacity fiber links going East-West and for the dozens of inter-city fiber rings being installed in North America and Europe. “If the ring topology fails, backup satellite capacity becomes that much more important,” Staple says. However, fiber routes could end up being the backup of choice for other fiber links, eliminating a chunk of the trans-oceanic market for satellites.

Another new role for satellites may be as a “flood control” mechanism for Internet traffic bursts, which tend to be much more unpredictable than the older stable voice traffic volumes. Multicasting provides another continuing role for satellites that fiber cables have yet to usurp.

According to Staple, Telegeography’s traffic report, issued in November, was the first to size the demand for Internet-broadband services between key cities in the world. The report also maps voice/fax traffic flows.

The first trend reshaping traffic patterns is a move from voice traffic to data. The crossover point, when data traffic surpassed voice on international networks, occurred in 1998. In 1999, 840 million telephones and 200 million Internet users on 54 million Internet hosts made up the user base for global telecommunications traffic.

Secondly, the traffic is changing from switched circuits used for ordinary voice calls to packets of digital data that are routed over the networks.

Third, monopoly environments are being converted into competitive ones, further reshaping the market. In the United States, the number of authorized international carriers has grown from 65 to 679 from 1995 to 1999. Other countries that have competitive telecom markets also have attracted more carriers, although to a much less dramatic degree than the United States. The United Kingdom has the second highest number of competitive carriers, with 215 in 1999, compared to 35 in 1995.

And finally, the successful buildout of the Internet is creating a global marketplace. TeleGeography says that inter-regional Internet bandwidth in 1999 totaled 13.3 Gbps from the United States and Canada to and from Europe; 5.9 Gbps from the United States and Canada to and from Asia and Oceania; 152 Mbps from Europe to and from Asia and Oceania; 949 Mbps from the United States and Canada to and from Latin America and the Caribbean; 170 Mbps from the United States and Canada to and from Africa; 63 Mbps from Europe to and from Africa and finally, 63 Mbps from Europe to and from Latin America and the Caribbean. To put those into perspective, for domestic Internet connectivity, the statistic for the New York-Washington corridor is 7.2 Gbps. The five largest hub cities for international Internet traffic in 1999 were London, New York, Amsterdam, Frankfurt and Paris, in that order.

While an oversupply of bandwidth will put downward pressure on prices, one side effect could be the creation of new, higher-speed applications. The Telegeography report describes innovations such as “silicon cockroaches,” which are Internet connections into consumer devices like vending machines and bar code scanners, as potential new sources for bandwidth demand. Companies with dispersed assets, like branch offices or fleets of cars, will benefit from being connected to the devices. Purchasing by major corporations is moving on-line, forcing customers and suppliers to tag along and thus creating another source of demand.

The provision of broadband links is taking place first in the heavy trunking routes over the oceans, but Internet usage is creating demand for “last mile” broadband services to consumers, for which both satellite and terrestrial service providers are competing. Major international telecom players-like MCI Worldcom, Deutsche Telekom, and AT&T-have reacted to this by marrying their local broadband strategies with long distance plans, TeleGeography says. Bringing broadband to the doorstep is going to take time. “Even in rich countries,” the report says, “most forecasts put high-speed access to the Internet at no more than 10-15 percent of households until 2003 or 2004.”

Theresa Foley is Via Satellite’s senior contributing editor.