Demand for T1 Bandwidth Grows as Budgets Shrink

Worldwide Internet traffic is projected to grow over 30% per year until 2015. Back in 2010, an average of 46 terabits per second traveled across the Internet; that number is expected to exceed almost 200 terabits per second in 2015. However as IP traffic is seeing exponential growth, the budget for network equipment is increasing at less than 10%.

The International Data Corporation (IDC), a premier global provider of advisory services, market intelligence, and events for the IT, telecommunications and consumer technology markets, forecasts that Ethernet equipment spending will grow approximately 8% every year until 2014. This poses a significant challenge to the industry: finding a way to supply over 30% more traffic per year with just 8% more revenue.

This week, we will cover three of the biggest factors that are contributing to T1 bandwidth growth:

• User base expansion: As the ease of connection grows and the associated costs decline, the number of Internet users grows at a rapid pace – both demographically and geographically. Consistent with the Visual Networking Index, by 2015 the number of Internet users will reach more than 2.1 billion (a growth rate of roughly 5% per year since 2010).
• Upsurge of smartphones and similar devices: According to the IDC, in 2012 over 1 billion smart devices – roughly half of them being smartphones – will be shipped around the globe. Because smart devices make the Internet more accessible than ever before, more users will be online in more locations for a greater amount of time. So much so, in fact, that the number of smart devices that will be in use by 2014 is expected to reach 3 billion.
• Video: Streaming video to smart smartphones, tablets, televisions, etc. have been a large part of Internet traffic growth. Compared to the early days of short, grainy, low-quality videos that were streamed mainly to PCs, today billions of people are watching longer, clearer, higher-quality videos on multiple devices. This combination of longer, higher-quality videos on multiple devices has created exponential traffic growth.

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