Some might recall a time when international capacity existed mostly to transport voice calls. In 1980, for example, tier-one telcos were the owners of the transmission assets and trans-Atlantic capacity could easily be measured in kilobits per second up to 1.5 megabits per second.
These days, capacity on global routes is measured in terabytes. In 1980, most of the demand was generated by people making long distance calls. Today, internet apps and video drive most of the global demand for capacity.
A small handful of firms--Google, Facebook, Amazon, and Microsoft—drive most of the demand for international capacity. In 2020, those four firms accounted for 66 percent of all used international capacity. So content services and applications now drive demand for global bandwidth.
About 45 percent of such hyperscale data centers are located in the United States, about eight percent in China, seven percent in Japan, for example.
Beyond that, the owners of facilities are mostly a handful of content and application providers, not telcos or connectivity service providers.
Annual demand still grows close to 50 percent, especially on routes connecting Africa and Asia. On other routes, annual growth ranges between 30 percent and 40 percent, according to Telegeography.
One might think most of that capacity is used to deliver content and data to end users of the internet. Actually, most of the bandwidth connects hyperscale data centers operated by the largest app firms.
Among many other changes to the global telecom business caused by a shift to internet, mobile and cloud communications, global bandwidth patterns have changed. In the past, long haul traffic originated and terminated at central offices.
Now, with the dominance of mobile-consumed content and apps, using the internet, cloud computing and web browsers or apps, traffic originates and terminates heavily at hyperscale data centers.
Asia-Pacific has been the fastest growing region in terms of hyperscale data center location and will continue to grow more rapidly over the next five years, although North America accounted for 43 percent of hyperscale data centers in 2020, says Cisco.
The point is that global capacity demand has shifted dramatically: from telcos to app and content providers; from voice to internet traffic; from voice to video; from end users to data center interconnection.
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