Introduction 1

Transport Networks 3
IP Networks 10
Data Centers 15
Cloud and WAN 22
International Voice 30
Glossary 34
Research Catalog 36

The
State of the
Network 2024 Edition

Sponsored by
 1

A nother lap around the sun, a new TeleGeography

State of the Network Report—a tradition we’ve kept
since 2017.

No seven-year itch for us, though; we’re just getting

started. As the world of telecommunications continues
to turn, each edition brings even more to report on than
the last.

Brought
If you’re new here, think of this e-book as our 2024
check-in on all things telecom.

to You By
After compiling the data and analysis our team dutifully
captured throughout 2023, we extract the major global
bandwidth headlines, take a snapshot of the global

Real Data
internet, peruse the latest in data centers, check in
on the cloud, and finish with an update from the voice
market.

This report is just the tip of the iceberg (you’ll find much
more within our full suite of research apps), but it’s a
great sampling of our core data sets.

What can you expect to read about in our latest report?

For starters, investment is surging to meet demand

across all global routes. Many global networks are
returning to more typical rates of utilization. Another
major disruptive component has emerged in the data
center market. And the pace of cloud region expansion
seems to be picking up again.

We’ll leave you to it. Thanks, as always, for checking out

our research.

— The TeleGeography Team

2

The Experts Behind This E-book

Lane Burdette Paul Brodsky

Research Analyst Senior Analyst
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Patrick Christian Jon Hjembo

Principal Analyst Senior Manager
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Alan Mauldin Tim Stronge

Research Director VP of Research
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Research Analyst Research Analyst
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 3

TRANSPORT NETWORKS

As Demand Grows,
Uncertainty Follows

F or much of the world, COVID is largely seen in the

rear-view mirror, along with the COVID-driven bump
in bandwidth deployments. The bandwidth market now
continues merrily along as demand grows across nearly
all networks. Our Transport Networks Research Service
assesses the state of the global telecom transport
industry and evaluates the factors that shape long-term
demand growth and price erosion. We assess market
conditions on both a global level and on a regional level,
focusing on critical submarine cable routes.

Demand Trends
By any measure, the global bandwidth market is thriving.
International bandwidth demand has nearly doubled
from 2020 to 2022, and has now reached 3.9 Pbps
(petabits per second).

Let’s break this demand growth down to a more granular

level. If we consider used international bandwidth
growth by region, two observations jump out. The first
is that demand growth has been strongest on links
connected to Africa, which experienced a compound
annual growth rate of over 50% between 2018 and
2022. The second is that growth in the rest of the
world remains strong. Even Latin America saw a 36%
compounded annual growth rate over the last five years.
While trailing the pack, keep in mind that this annual
growth rate implies a doubling of bandwidth every 27
months.
4

The Role of Content Providers

Who’s gobbling up all this international capacity? His-
torically, it’s been carrier networks, provisioning public
internet services. As the internet has evolved, major
content and cloud service providers—in particular Goo-
gle, Meta, Amazon, and Microsoft—have become the
main sources of demand. Companies like these are the
dominant users of international bandwidth, accounting
for 71% of all used international capacity in 2022.

The capacity requirements for companies such as

these vary in scale and by route. Content providers
prioritize the need to link their data centers and major
interconnection points. As such, they often deploy
massive amounts of capacity on core routes, while
focusing much less than traditional carriers do on
secondary long-haul routes. To get a sense of this
contrast, note that in 2022, content providers account-
ed for 92% of used capacity on the trans-Atlantic route
but just 31% on the Europe-East Asia route.

While the share of content provider capacity on some

routes may be much lower than on others, the growth
in their demand across all routes has been relentless. A
comparison of content providers’ international capacity
demand growth compared to that of all other networks
reveals a stark contrast. Across every region, content
providers added capacity at a compound annual rate
of at least 41% between 2018 and 2022, compared to a
rate no higher than 44% for all the others.

Meeting Demand Requirements

Demand for international bandwidth is nearly doubling
every two years. To meet this demand, companies are
investing in existing networks and in new infrastructure.
The lit capacity on major submarine cable routes
continues to soar, keeping pace with demand. Between
2018 and 2022, lit capacity tripled on several routes. The
pace of growth was the most rapid on the trans-Atlantic
route, where lit capacity increased over 3-fold between
2018 and 2022.

Submarine cable operators are lighting additional

 5

capacity on existing systems. Not only that, but new

systems are coming online across all routes. The year
2016 initiated a period of significant global investment
in the sector. Cables with a combined construction cost
of $8.8 billion entered service between 2018 and 2022,
Construction Cost
and every major subsea route saw new cables deployed
of Submarine Cables
during this timeframe. Investment is expected to surge
Construction costs in USD billions
across all global routes. Based on publicly-announced
planned cables, over $11 billion worth of new cables are $5
expected to enter service between 2023 and 2025.

Pricing $4

Prices continue to decline (somewhat), but the biggest

story recently has been how the pace of price erosion
$3
compares to previous years. For many key global routes,
it has been notably slower—a reflection of different
levels of market maturity and delays in supply due to
$2
geopolitical challenges and global supply chain issues.
Capacity upgrades, which historically took 6-12 weeks
from order to installation, rose to 50+ weeks for some
$1
vendors.

While this improved over the course of 2022, delays

are anticipated to continue throughout 2023. Looking $0
2014 2023 2025
at weighted median 100 Gbps wavelength price trends
on major international routes—between 2019 and Actual
Announced
2022—weighted median 100 Gbps wavelength prices
decreased an average of 13% compounded annually. Notes: Total construction costs of all international and domestic
That’s compared to 23% over the prior three years (2016- submarine cables entering service in designated years. Construc-
tion costs exclude the cost of subsequent capacity upgrades and
2019). Trends do, of course, vary by market. annual operational costs. 2023-2025 construction costs based on
announced contract values and TeleGeography estimates. Not all
planned cables may be constructed.
On routes with more ample supply, we see higher rates
of price erosion. For example, the U.S.-Latin America
route continues to fall at a brisk pace, still feeling the
effects of new cables and upgrades to existing systems.
While price erosion on Miami-São Paulo was certainly
less over the past three years than the historical trend,
it is still above the range of 15-20% annual price erosion
that we tend to see on most key global routes.

In comparison, on routes with continued delays in new

supply, price erosion has stalled. Marseille-Singapore
and Hong Kong-Singapore are key examples of this.
Wavelength prices on both routes are already extremely
competitive and don’t have as much room to fall, but the
6

Europe-Asia and intra-Asia routes have also been espe-

cially impacted by recent delays in supply and for the
time being available inventory is going for 2022 prices or
potentially higher.

Outlook
What does the future hold for the global bandwidth
market? The two most predictable trends are persistent
demand growth and price erosion. Beyond that,
operators will have to navigate the major uncertainties
of an evolving sector. Here are a few of the key trends,
among many, that will affect the long-haul capacity
market in the coming years.

Rising Utilization

The most fundamental driver for new cable construction

is the limited availability of potential capacity. On the
surface, this issue may not appear important on major
cable routes, where the percentage of potential capacity
that is lit has only recently exceeded 50%. However,
demand continues to rise at an exponential rate and
could soon lead to capacity exhaustion without new
cable investment.

Even with the introduction of many new cables and the

ability for older cables to accommodate more capacity,
the growth of potential capacity has failed to outpace
that of lit capacity. If we consider the percentage of
potential capacity that is lit on major submarine cable
routes, we’ll see that it has begun to rise.

Looking at the lit share of potential capacity is not the

only way to measure utilization. In fact, the availability of
fiber pairs is emerging as a key metric on routes where
content providers are involved. Thus, when gauging
potential supply on a route, it’s important to bear in mind
not just how much unlit capacity remains but whether
unlit fiber pairs are available as well.

Uncertain Growth for Content Providers

Content providers’ international capacity has grown

at a rapid rate in recent years, but how long can this
last? The recent layoffs at major content providers and
declining stock prices have created some questions
 7

about these companies’ network investment. Thus far,

these issues do not appear to have a material impact
on the bandwidth demand growth forecasted by these
companies.

Most network planners in these companies focus on

meeting expected growth for a 2- to 3-year planning
horizon. In our discussions with content providers,
all of them have indicated challenges in forecasting
their longer-term demand requirements. None of them
foresee a decline in demand and continue to anticipate
the need for future cable investments. A few aspects
that influence growth rates include the following.

Maturing networks. The law of large numbers dictates

that a large entity growing rapidly cannot maintain that
pace of growth forever. We are certainly seeing evidence
of this on major routes. For example, across the Atlantic,
annual growth for content providers had been in excess
of 80% but has now dipped below 30%. This is a typical
pattern for networks as they mature. Even with slowing
cumulative growth rates, the incremental volume of
bandwidth added each year is still massive. So while
global content provider bandwidth growth slowed to
“only” 39% in 2022, this still equates to an incremental
increase of 783 Tbps.

Artificial Intelligence (AI). The most frequently cited

future application that will drive demand is AI. Google,
Meta, Microsoft and Amazon have all invested heavily
in their own AI models which will increase demands on
their network infrastructure. Microsoft’s infrastructure
is also supporting OpenAI, the company behind
ChatGPT. While AI models require substantial compute
power, the degree to which AI will impact international
bandwidth demand remains unclear.

Multiple product lines and users. Content providers’

bandwidth demand comes from a large number of
services within each company. In the case of Google,
there is search, YouTube, maps, cloud, and many more.
It’s also worth noting that the bandwidth demand for
Google Cloud, AWS, and Microsoft Azure isn’t related
to these companies’ internal demand, but rather has to
do with enterprises’ implementation and usage of their
cloud platforms.
8

Timing of new cables. In recent years, major content

provider investments have reduced reliance on carriers
and focused on securing enough wholly-owned fiber
pairs to achieve sufficient route diversity. Increasingly,
new capacity is added largely through the introduction
of new cable systems. Thus, annual capacity growth
rates observed on some routes could appear lumpy
as they are largely influenced by when new submarine
cables enter service.

Supply Limitations
While geopolitical
concerns have always The global shortage of chips is continuing to lead to
some delays in network upgrades. These issues are
played a role in determining improving but may not be fully resolved until 2024.
which companies deploy However, other supply side factors could throttle the

long-haul networks and pace of demand growth in the longer term. There is a
limit to how many new submarine cables can be added
where they do so, several each year. Cable factories can only produce so many
recent developments kilometers of cable a year. In addition, there are a limited
are reshaping network number of cable laying ships and experienced crews
to engage in marine installation. Increasing factory
deployment trends. size, the number of installation vessels, and crews
will certainly occur, but it takes several years for these
measures to be implemented.

Geopolitical Concerns

While geopolitical concerns have always played a

role in determining which companies deploy long-
haul networks and where they do so, several recent
developments are reshaping network deployment
trends. In one example, thawing relations between Israel
and other Middle Eastern countries has allowed the
potential for systems connecting Europe, the Middle
East, and Asia to transit across Israel. Several planned
projects, including the Blue and Raman cables, hope to
capitalize on this opportunity.

In contrast, cable builders find it increasingly difficult

to receive Chinese permits for cable deployment in
the South China Sea. Operators of the planned Apricot
cable hope to avoid this problem by building a cable
from Japan to Singapore that runs to the east side of
the Philippines. In addition, U.S. government opposition
to direct China-to-U.S. cables has encouraged the
development of several cables from Southeast Asia to
 9

the U.S. These include Echo, Bifrost, ACC-1, and Hawaiki

Nui.

The Europe-Asia route has also been impacted by

contemporary geopolitics. China Telecom and China
Mobile opted to leave the SeaMeWe-6 consortium cable
when American-supplier SubCom was selected as the
supplier instead of Chinese-supplier HMN Tech. As a
result, the Chinese carriers that left SeaMeWe-6 along
with other carriers in Europe and the Middle East are
rumored to be planning another cable called Europe-
Middle East-Asia (EMA) that HMN Tech would build. The
precise landing points and expected activation date are
not yet available.

Wholesale Market Challenges

The rapid expansion of major content providers’

networks has caused a shift in the global wholesale
market. Google, Microsoft, Meta, and Amazon are
investing in new submarine cable systems and
purchasing fiber pairs. This removes huge sources of
demand from the addressable wholesale market. On the
other hand, it drives scale to establish new submarine
cable systems and lower overall unit costs.

Many submarine cable business models actually rely on

this capital injection, allocating fiber and network shares
to the largest consumers to cover initial investment
costs, then selling remaining shares of system capacity
as managed wholesale bandwidth. Unit cost savings of
large investments are a great incentive to investment for
operators, but they don’t want to be left with too much
excess bandwidth. It’s often a race to offload wholesale
capacity before a new generation of lower-cost supply
emerges. The carriers most likely to succeed are those
with massive internal demand and less dependence on
wholesale market revenues.

Both content and carrier network operators are

reckoning with massive bandwidth demand growth,
driven by new applications and greater penetration
into emerging markets. The sheer growth in supply
will drive lower unit costs for bandwidth. In the face of
price erosion, the challenge for wholesale operators is
to carve out profitable niches where demand trumps
competition.
10

IP NETWORKS

Have We Reached
Homeostasis?

T hree years after the COVID-19 pandemic struck, the

internet appears to have achieved a state of nor-
malcy. After a tumultuous 2020, in which the COVID-19
pandemic caused internet traffic patterns to shift and
volumes to surge, network operators have returned
to the business of adding bandwidth and engineering
their traffic in a more measured manner.

In our IP Networks Research Service, we analyze the

meaning of our robust internet capacity and traffic
data sets. We also discuss factors impacting IP transit
pricing, and the role individual backbone operators
play. Based on hard survey data gathered from dozens
of regional and global network operators around the
world, we conclude that COVID-related expansion of
internet traffic and bandwidth was largely a one-off
phenomenon, and that the trends we had been ob-
serving in recent years have reasserted themselves.
International internet bandwidth and traffic growth had
been gradually slowing in recent years, but they remain
brisk. IP transit price declines continue globally, but
significant regional differences in prices remain.

Internet Traffic and Capacity

Global internet bandwidth rose by 23% in 2023, continu-
ing to fall from the pandemic-generated bump of 2020.
Total international bandwidth now stands at 1,217
 11

Tbps, representing a 4-year CAGR of 28%. COVID bump

aside, the pace of growth has been slowing. Still, we do
see a near tripling of bandwidth since 2019.

Strong capacity growth is visible across regions. Once

again, Africa experienced the most rapid growth of in- International Internet
ternational internet bandwidth, growing at a compound Bandwidth Growth By Region
annual rate of 44% between 2019 and 2023. Asia is a Compound annual growth, 2019–23
distant second, rising at a 32% compound annual rate
over the same period.
Africa
International internet traffic growth largely mirrors that
of internet bandwidth. Both average and peak interna- Asia
tional internet traffic increased at a compound annual
rate of 30% between 2019 and 2023—slightly above Europe
the 28% compounded annual growth rate in bandwidth
over the same period. All of the stay-at-home activity Latin America
associated with COVID-19 resulted in a spike in traffic
from 2019-2020. The return to more normal usage Middle East
patterns over the last couple of years has resulted in
a substantial drop in average and peak traffic growth. Oceania
Average traffic growth dropped from 46% between
2019-2020 to 23% between 2022-2023, while peak U.S. & Canada
traffic growth dropped from 45% to 21% over the same 0% 20% 40% 60%
time period.

This return to normalcy can be seen across regions of Notes: Data as of mid-year.

the world. With the initial rapid traffic growth due to

COVID-19 continuing to wane in 2023, many global net-
works appear to have started to return to more typical
rates of utilization. Global average and peak utilization
rates were essentially unchanged from the year before
at about 26% and 44% percent, respectively, in 2022.

Prices
Providers’ shift to predominantly 100 Gbps internet
backbones continues to reduce the average cost of
carrying traffic and enables profitability at lower prices.
As a result, price erosion remains the universal norm.
It reflects the introduction of competition into new
markets and the response of more expensive carriers
to lower prices. Trends in the IP transit market general-
ly follow regional trends of the transport market. And
while some have suggested that price erosion may
slow as a result of recent inflation and supply chain
12

constraints (as it has in the wavelength market), we

have not seen this trend make its way into the IP transit
market.

Across a range of markets, 10 GigE prices fell 13%

compounded annually from Q2 2020 to Q2 2023. A
comparable sample of 100 GigE port prices fell 16%
over the same period.

The sharper decline in 100 GigE reflects the advanced

maturity of 10 GigE, as well as more carriers offering
it—resulting in greater competition. While 10 GigE
remains a relevant increment of IP transit, particularly
in more emerging markets, its share of the transaction
mix continues to yield to 100 GigE. In 2023, providers
indicated that a majority of their sales mix in key U.S.,
European, and Asian hubs were now 100 GigE. On aver-
age, across seven cities—London, Miami, Frankfurt, Los
Angeles, São Paulo, Hong Kong, and Singapore—the
Monthly Recurring Charge (MRC) for a 100 GigE port
was 6.9 times the MRC for a 10 GigE port. Operators are
poised to adopt 400 GigE IP transit ports as the next
fundamental upgrade from multiple 100 GigE ports.

Provider Connectivity
Our rankings of provider connectivity include analysis
based on BGP routing tables, which govern how pack-
ets are delivered to their destinations across myriad
networks as defined by autonomous system numbers
(ASNs). Every network must rely on other networks to
reach parts of the internet that it does not itself serve;
there is no such thing as a ubiquitous internet back-
bone provider.

If you want a single, simple number to identify the

best-connected provider in the world, you may come
away disappointed. There are several ways to measure
connectivity, and each highlights different strengths
and weaknesses of a provider’s presence. One basic
metric is to count the number of unique Autonomous
Systems (AS) to which a backbone provider connects,
while filtering out internal company connections.

Hurricane Electric has experienced consistent gains,

and now ranks as the clear number one in terms of
connections. Cogent has also experienced steady
 13

growth. Lumen and Hurricane Electric had swapped

the top spot back and forth for several years. Lumen
(the rebranded CenturyLink) experienced huge gains a
few years ago when the company bought Level3. Since
then, the number of ASNs connected to Lumen has
stagnated.
Number of Connections for
In addition to examining overall number of connections, Selected Providers
we also used our analysis of BGP routing tables to look
at the “reach” (a measure of the number of IP address-
es an upstream ASN has been given access to from
8,000
downstream ASNs) and “share” (which compares an
upstream provider’s reach to all other upstream provid-
ers of a downstream ASN.) The results of this analysis 6,000
paint a different picture. In some cases, an ISP might
end up high-ranked in terms of number of connections
4,000
but low-ranked in terms of share or reach when the
number of IP addresses passed from its customers is
relatively small. 2,000

Finally, to focus on which backbone providers best

serve the end-user ISP market and corporations, we
0
compare upstream provider connections to down-
2015 2016 2017 2018 2019 2020 2021 2022 2023
stream broadband ISPs, calculated the top providers to
Hurricane Lumen Cogent
Fortune 500 companies, and examined connectivity to Zayo AT&T Arelion
specific industry sectors such as hosting, medical, and
finance. Notes: Data shows the number of connections to other ASNs.
The line indicating Lumen’s number of connections reflect
Level 3 (parent ASN 3356) rather than Lumen (formerly parent
Outlook ASN 209) prior to 2018.

The combined effects of new internet-enabled devices,

growing broadband penetration in developing markets,
higher broadband access rates, and bandwidth-inten-
sive applications will continue to fuel strong internet
traffic growth. While end-user traffic requirements will
continue to rise, not all of this demand will translate
directly into the need for new long-haul capacity. A
variety of factors shape how the global internet will
develop in coming years:

Post-COVID-19 growth trajectory. Initial evidence

suggests that the spike in the rate of bandwidth and
traffic growth in 2020 from the pandemic was a one-
time event and we have returned to more traditional
rates of growth.

IP Transit Price Erosion. International transport unit

14

costs underlay IP transit pricing. As new international

networks are deployed, operational and construction
costs are distributed over more fiber pairs and more
active capacity, making each packet less expensive
to carry. We already see a major shift from 10 GigE
requirements to 100 GigE requirements, and expect
that 400 GigE will emerge in two to three years as a
significant part of the market. The introduction of new
international infrastructure also creates opportunities
for more regional localization of content and less de-
We already see a major pendence on distant hubs. As emerging markets grow
in scale, they too will benefit from economies of scale,
shift from 10 GigE even if only through cheaper transport to internet hubs.
requirements to 100 GigE International versus domestic. While there’s little doubt
requirements, and expect that enhanced end-user access bandwidth and new
that 400 GigE will emerge applications will create large traffic flows, the challenge

in two to three years as for operators will be to understand how much of this
growth will require the use of international links. In the
a significant part of the near-term, the increased reliance on direct connections
market. to content providers and the use of caching will con-
tinue to have a localizing effect on traffic patterns and
dampen international internet traffic growth.

Bypassing the public internet. The largest content

providers have long operated massive networks. These
companies continue to experience more rapid growth
than internet backbones, and they are expanding
into new locations. Many other companies, such as
cloud service providers, CDNs, and even some data
center operators, are also building their own private
backbones that bypass the public internet. As a result,
a rising share of international traffic may be carried by
these networks.

Artificial Intelligence (AI). This is the most hyped

demand driver in recent years, but its impact on inter-
national internet capacity is not entirely clear. A large
amount of AI-driven demand is likely to be carried over
the private networks of Google, Microsoft, Amazon,
and Meta. Microsoft’s infrastructure is also supporting
OpenAI, the company behind ChatGPT.
 15

DATA CENTERS

Can’t Catch a Break

R ecently, we’ve been closely monitoring the intensi-

fying pressures of insatiable demand and supply
constraints in key data center markets. Supply con-
straints have come in the form of both short-term and
long-term challenges. In the short term, supply chain
disruptions have hindered development timelines. On
the long-term side, regulators and utility providers have
begun taking a hard look at the data center sector and
how to grow it sustainably going forward. In some cas-
es, these entities have severely disrupted development
during the interim period.

None of these challenges have been resolved. And

as we move through 2023, another major disruptive
component has been added to the mix—the accelerated
growth of generative Artificial Intelligence (AI). AI will
have profound effects on both data center demand and
on how data centers will be designed to accommodate
vastly more sophisticated operations moving forward.
In our Data Center Research Service, we highlight these
current obstacles facing the industry.

Of course, the current pains will ultimately produce

positive changes. For one, development across a wider
distribution of geographic locations could ease con-
straints on power and space in hub markets. It’s also
possible that price volatility in the electricity market
could spur an even greater focus on the use of
16

energy-efficient equipment. And, ultimately, these

disruptions could drive development of sustainable
practices across the data center value chain (e.g.,
liquid-cooled servers, recycling waste heat, use of
renewable energy generation, deployment of onsite
generation, gray water cooling, and other solutions).
Largest Retail Operators
In the meantime, we continue to see rapid expansion of
by Gross Floor Space
data center and interconnection market infrastructure
Million square feet, 2023
across the globe, both in core and developing markets.
Network, data center, cloud, and internet exchange
Digital Realty operators continue to work together to build new and
more widely distributed interconnection nodes.
Equinix
Let’s take a look at the most recent findings from our
data center research.
NTT

STT GDC Capacity

Data Center Developments
CyrusOne
By our 2023 estimates, The Washington metropolitan
QTS area—or more specifically Northern Virginia (NoVA)—
dominates as the world’s largest data center market.
Telehouse With more than 22 million square feet of operational
capacity, NoVA is 30% larger than the next-biggest data
Cyxtera center hub, Tokyo.

Asian and U.S. metro areas account for 8 of the 10

Iron Mountain
largest data center markets. In Europe, only London
Global Switch and Frankfurt make the list of largest markets.
0 10 20 30 Digital Realty and Equinix have much greater scale and
geographical diversity than all of their competitors.
Each of these two operators controls at least 30 million
square feet of operational data center capacity. And
both of them have significant footprints across every
global region. NTT has a footprint about 30% smaller
than that of Equinix but nearly twice as big as the
next-largest provider.

More than 50 commercial data center providers control

over 1 million square feet of operational capacity—
each. While few are nearly as large as the behemoths
on top of this list, many are growing rapidly, are flush
with new investment, and are immensely critical play-
ers in the development of the global interconnection
market.
 17

Looking at sizable markets with at least 1 million

square feet of operational capacity, least 20 of these
are growing at 10% CAGR or more. If we include smaller,
dynamic markets in that mix, the number reaching that
level at least doubles.

A few markets are particularly notable for both their

extensive deployed capacity and their surging growth
in the past five years: the Latin American markets of
Santiago, Campinas, and Santiago de Queretaro; Berlin
in Europe; and Mumbai in South Asia. Each has at least
2 million square feet of operational data center capac-
ity and has grown between 24-36% CAGR since 2019.
All of these markets have much more capacity in the
pipeline, too.

It’s also worth highlighting a couple of markets that

have seen very low growth. Hong Kong, which is at
the center of geopolitical and network deployment
challenges, has only grown 2% CAGR over the past five
years. Amsterdam and Washington (NoVA) have seen
compound growth of about 5% in new capacity. Growth
in these markets will further contract as restrictions
on new development are imposed in the Netherlands
and as the NoVA market waits pensively for new power
transmission capacity to come online.

Digital Realty and Equinix have continually led the

market in the amount of new capacity deployed and in
the geographic diversity of those investments. Digital
Realty’s new site capacity deployed between August
2021 and August 2023 was spread evenly across five
continents. Equinix’s focused heavily on Europe and
Asia.

Vantage has outpaced even Equinix—at least in sheer

gross capacity growth—over the past two years. Since
August 2021, the company has rapidly built out large-
scale facilities from North America to Europe and
further afield in South Africa and Australia.

Among the operators tracked in our database, more

than 350 data center sites are known to be in the
pipeline right now. While this construction is spread
across global regions, Asia outpaces other regions with
the largest percentage of new deployments.
18

Not all of these data centers will be deployed as soon

as hoped. NoVA has nearly a dozen sites in develop-
ment, but none of those sites will be deployed until
power becomes available. Dublin has six, but currently
numerous projects are being rejected by the market’s
local government. On the other hand, Johor Bahru,
Kuala Lumpur, and Jakarta all have a half dozen or
more data centers in the immediate pipeline, and these
are highly likely to be operational within the next few
years.

Power

We estimate that, as of 2023, colocation operators

in the top ten data center markets consume about
12 gigawatts (GW) of power. That’s enough power to
generate electricity for roughly 9 million homes—or,
in this case, only about 1,000 commercial data center
facilities!

Only 11% of data center sites reporting are able to

provision high-density aisles that exceed 20 kW per
rack. This is troubling, especially when considering
the fact that AI applications will require density levels
in the range of 45 to 80 kW per rack—far in excess of
traditional standards of high density.

Connectivity

Lumen, Cogent, Zayo, Verizon, and AT&T are the most

prominent carriers across global facilities. These
five operators are especially widespread in the U.S. &
Canada. Operators like Tata, NTT, and China Telecom
are ubiquitous in data centers throughout Asia and far
beyond; Vodafone, Deutsche Telekom, and euNetworks
are heavily represented in European data centers
and in other regions; Telefonica, Embratel, Oi, and Flo
Networks are among the carriers offering extensive
connectivity in Latin American data centers.

By our estimates, SUNeVision’s MEGA-i data center in

Hong Kong is the most carrier-dense colocation site in
the world, though Coresite LA1 (better known as One
Wilshire) rivals that position. Equinix’s Kleyerstraße 90
site in Frankfurt and TELEHOUSE’s London Docklands
campus are also central nodes of international internet
connectivity.
 19

We continue to see new peering exchanges coming

online across the globe in both established and devel-
oping markets. Recent deployments are geographically
dispersed, with new IXs coming online in almost every
region of the globe each year between 2019 and 2023.
Notable launches in the past year have included inter-
national operator deployments in India, Southeast Asia,
Africa, and the Nordics along with multiple localized
operator IX launches in Italy. A steady stream of new
exchanges is slated to come online, most imminently in
Europe, Latin America, South Asia, and the Middle East.

Pricing
Current Trends

Starting in 2022 and continuing through 2023, expecta-

tions of price inflation became reality in the colocation
market—at least in Europe and Asia. Average prices
per kilowatt for colocation in our market sampling
increased between 40% and 50% respectively over the
two years between H2 2021 and H2 2023. In the U.S.,
despite ongoing expectations that prices will start
to rise, ongoing “local turf wars” and vacancy issues
among some operators continued to artificially drive
prices downward.

In Singapore—the most expensive colocation market

we track—supply has become incredibly scarce due
to the city-state’s new licensing regime. As a result,
median rates surged 30% year-on-year to exceed $660
per kilowatt in H2 2023. In our ten years of tracking
colocation pricing, we’ve never seen Singapore’s rates
this high. Frankfurt has typically been among our most
expensive markets as well, although there was a slight
decrease in our observed median rate this cycle.

With the sole exception of the New York metro, the U.S.
market registered more affordable median colocation
rates than all European and Asian markets in our most
recent survey.

Between H1 2022 and H1 2023, U.S. cross connect

rates rose substantially before correcting back down-
ward in the most recent reporting period. Although
utility rates have no direct impact on cross connect
20

pricing, their inflationary effect on the colocation

market is so strong that some operators had increased
cross connect prices in order to distribute increased
fees across contracted services. In contrast to U.S.
markets, European and Asian cross connect prices
generally remained steady.

In our study, we model TCO for colocation rates assum-

ing the average monthly cost of a cabinet with either
one or five fiber cross connects. The average TCO in
European markets when one cross connect is assumed
($1,960) was about 60% higher than that in North
American markets. The gap between average TCO in
Europe and the U.S. grew dramatically between 2022
and 2023 (having previously been closer to 15%). This
was largely due to the sharp upturn in European prices
per kilowatt, contrasted with the continued, muted
response to macroeconomic conditions among many
U.S. operators.

When five cross connects were assumed in our TCO

model, the difference in TCO between these two
regions became essentially nonexistent. The drastic
increase in base colocation pricing seen in European
markets over the past few cycles counterbalanced the
U.S.’s high cross connect rates.

On the metro level, Singapore remained untouched as

the most expensive market in our entire survey in both
the one and five cross connect TCO models. This was
unsurprising considering the fact that the median base
colocation price was far higher than all other metros
surveyed at over $660 per kilowatt and that the median
cross connect price in Singapore was also rather high
at $180 per month.

Expectations

Operators continued to anticipate price inflation across

the market looking forward to 2024, but reported
expectations were mixed in H2 2023. Across our full
sampling of metros, the median responses ranged from
no change to 15% expected inflation in colocation rates
for the coming year, with the global average resting
around 10%.

Respondents continued to expect cross connect rates

to rise as well, though not nearly as much as base
 21

colocation rates. Across our sampling of markets,

operators indicated that prices could rise a further 5%
over the course of the coming year.

Here are a few general trends to watch as we move into

2024:

Inflation in European electricity costs has settled down

significantly following 2022’s surge. This development
does not preclude continued volatility. Complications
in power delivery specific to individual countries,
government actions, and lags in wholesale contract The biggest ongoing
renewals will be among many factors complicating the
relationship between spot rates and the ultimate power
concern in the data
prices passed down to data center operators and their center market will be the
customers. availability of power and
U.S. markets are not immune to the inflationary pres- space to develop further
sures of the global market. Localized competition will in key markets.
continue to temper the effect, but the surge in cross
connect rates we saw earlier in 2023 will likely be
followed by some increases in colocation rates.

The biggest ongoing concern in the data center market

will be the availability of power and space to develop
further in key markets. As regulators and utilities
continue to push sustainability goals for the industry,
inflationary pressure will continue in markets like
Singapore and Frankfurt.
22

CLOUD AND WAN

So Many Ways To Get There

T he world of WAN services can seem like the Wild

West to even the savviest of WAN managers.
Like Gary Cooper in High Noon, we try to bring some
order to this world with our Cloud and WAN Research
Service. We detail cloud connectivity offerings and
cloud geographies, as well as international wide area
networking (WAN) services of more than 250 service
providers. This analysis examines the evolution of
WAN services and architecture, geographic coverage,
and pricing. We also cover cloud connectivity services
(dedicated connections) with profiles and analyses
of the major public IaaS cloud service providers and
colocation providers that offer cloud on-ramp services.

Cloud Connectivity Services

Cloud services have become a critical component of
many enterprises’ data management. How enterprises
reach the cloud service providers’ data centers has
become an important issue. Traditionally, the plain old
internet sufficed. But there’s more than one way to skin
a cat. Companies seeking better performance may
peer with cloud service providers (CSPs), either through
their network service provider (NSP) or directly with the
CSP if the company has an autonomous system num-
ber (ASN) and meets the CSP’s peering requirements.
For better security, companies may instead choose to
connect via IPSec VPNs, tunneling through the public
internet.
 23

Still other companies may have high-capacity require-

ments and business-critical applications in the cloud.
For these businesses, cloud services cannot be left
susceptible to the performance of the public internet.
For them, cloud service providers (CSPs) and their
carrier and colocation partners offer dedicated links to
CSP networks. These links effectively extend an enter-
prise’s network into the cloud provider’s network, thus
bypassing the public internet.

Enterprise network managers have a wide array of

service providers to choose from for a dedicated cloud
With a total count of over
connection service. While enterprises can set up a 250, Asia is home to the
link directly with the cloud provider, more frequently most in-service cloud
a third-party (think a carrier, colocation provider, or
connectivity specialist) is used. Selection of a provider
zones. The United States
often depends on the location of the enterprise WAN in and Canada follows suit
relation to the cloud providers’ zones or data centers. If with over 125 zones.
a company has routers located within the same coloca-
tion facility as the cloud provider, it can often work
Together, these two
directly with the cloud service provider to facilitate the regions account for about
direct connection between the networks. 65% of the world’s cloud
With a total count of over 250, Asia is home to the most data centers.
in-service cloud zones. The United States and Canada
follows suit with over 125 zones. Together, these two
regions account for about 65% of the world’s cloud
data centers. The remainder are housed in Europe
(19%), Latin America (5%), Oceania (4%), the Middle East
(4%), and Africa (2%). At the country level, China and the
United States are the clear leaders with close to 140
availability zones for China and 110 for the U.S. Japan,
Australia and India round out the top 5, but are home to
only between 20 and 30 zones each.

Since 2013, cloud providers have launched an average

of 18 new cloud regions per year. In 2019, Oracle joined
the fray, launching 12 new cloud regions. Among all
providers, a whopping 45 new regions were added in
2019. Early 2020 looked equally promising, with cloud
providers on track to launch as many or more regions
than the year prior. Alas, COVID-19 struck, stifling
these ambitions. Nonetheless, this rampant expansion
continued to pick up pace soon after as cloud opera-
tors successfully launched 23 and 27 new regions in
2020 and 2021 respectively. The year 2022 ended with
24

a similar number of data centers with 23 new regions

launched.

The pace seems to be picking up again, with more

than 35 planned regions for 2023. If you add in regions
planned for 2024 and beyond, there are currently plans
to launch close to 50 new cloud regions. Azure leads
the pack, contributing 20 new cloud regions. Google,
AWS and Oracle are also on the bandwagon, announc-
ing plans for 10, eight, and seven additional new re-
gions respectively. Rounding out the pack, Huawei has
plans for two new regions.

WAN Pricing Trends

Trends Across Key Business Centers

MPLS

There is no denying that the prevalence of MPLS in the

WAN has decreased as enterprises continue to move
to hybrid network designs. In 2022, respondents to
our WAN Manager Survey reported that they employed
MPLS at 51% of their network sites. That’s down from
a reported high of 82% in 2018. It is worth noting that
this is the first year that MPLS usage saw some stabil-
ity after the past several years of downward trends.
While its role in the WAN is diminishing, MPLS remains
a critical component of many enterprise networks,
particularly at sites with stricter security or higher SLA
requirements. Providers are responding to the percep-
tion that MPLS is expensive. Prices continue to decline
across geographic regions as providers look to position
the service more competitively. Keep in mind, however,
that individual prices and price trends vary by market
and provider.

Overall, MPLS prices remain highest in developing or

remote markets, such as Johannesburg, Mumbai, and
São Paulo, where international Layer 1 connectivity
is expensive and fewer service providers have PoPs.
Markets that are major connectivity hubs and where
international capacity is cheap, such as London, New
York, and Hong Kong, are the least expensive. Competi-
tion reflects the fact that most carriers offering any
international service tend to have PoPs in these cities.
 25

DIA vs. MPLS

An optimized WAN routes traffic over the most cost-

effective link that supports application performance.
Where much of an end-user’s traffic is bound to the
internet anyway, carrying it over MPLS from the cus-
tomer premise to a gateway is not only expensive, but
also impacts performance. The most common “hybrid”
WAN combines MPLS for mission-critical traffic that
can’t be run over the public internet, with DIA for traffic
destined to the internet. This is particularly true where
a local breakout will improve the performance of SaaS
applications and support the volumes of general inter-
net traffic most companies generate. In most cases,
the question is not whether to opt for MPLS or DIA, but
rather, what is the appropriate size of each connec-
tion—and, when upgrading a site’s capacity, where can
bandwidth be added most cost effectively?

DIA is universally less expensive than MPLS. In Q4

2022, 10 Mbps DIA connections in key cities were an
average of 34% less expensive than a comparable Best
Efforts MPLS port. Individual premiums vary dramati-
cally. In New York and Singapore, DIA ports are just
27% and 23% less expensive than MPLS, respectively.
In São Paulo and Mumbai, DIA ports are 46% and 45%
times less expensive than MPLS, respectively. And in
Johannesburg, a 10 Mbps DIA port is a staggering 60%
less expensive than MPLS.

Business Broadband vs. DIA vs. MPLS

Business broadband delivers the most cost-effective

site connectivity in a hybrid WAN. If we compare the
100 Mbps monthly price of best efforts MPLS, DIA, and
business broadband across geographies, business
broadband is by far the least expensive option.

On average, across ten major markets, the price for

best efforts MPLS is a shocking 63 times the price
of broadband. In markets such as New York and
Singapore, where broadband prices are a bit higher, a
100 Mbps MPLS port was just six and five times more
expensive than a comparable broadband connection,
respectively. In markets where broadband prices are
low or MPLS remains expensive, the difference can be
much larger. For example, a 100 Mbps MPLS port in
26

Mumbai was 341 times more than a broadband con-

nection.

While DIA is a more affordable option in comparison

with MPLS, the average price multiple is still 28 times
the average price of broadband. Price gaps again are
lowest in Singapore and New York at just two and four
times more expensive. Mumbai once again reported
the largest difference, with a 100 Mbps DIA port com-
ing in at 133 times more than a comparable broadband
connection. With more and more traffic destined for
cloud applications, why not take advantage of business
broadband? Particularly if cloud on-ramps are in close
proximity to users.

SD-WAN and the Hybrid WAN for

Cost Optimization
SD-WAN is one tool that assists enterprise customers
to integrate internet services into a hybrid WAN. To
provide insight into how incorporating SD-WAN into
the corporate WAN can impact total network spend, it
is useful to look at how these costs apply to a specific
network. Looking at the total cost of the overlay and its
impact on a network’s total cost of ownership (TCO) af-
fords the most apples-to-apples comparison between
service providers—particularly with a number of pricing
models currently in the market.

To do this level of analysis we created a hypothetical

network based on our median WAN Cost Benchmark
customer, along with some input from our WAN Man-
ager Survey that queried IT infrastructure managers
from around the world about their network configura-
tions. The resulting hypothetical network is comprised
of 150 sites spread across major international business
centers.

Over the past year, the cost of both the unmanaged and
managed SD-WAN overlays in this network scenario
have decreased. Thirty-three percent for the unman-
aged solution and 17% for the managed solution. As
a result, in 2022, the unmanaged SD-WAN overlay
contributed just 11% to the network TCO, while the
managed solution contributed 27% to the network TCO.
 27

Overall, even after investing in the cost of an SD-WAN

overlay, if enterprise customers are able to remove
some of their MPLS and integrate DIA or broadband,
they may be able to achieve some real network savings Global Cloud Data Center
or increased network capacity while staying within and On-Ramp Locations
their existing budget.

WAN Services
Coverage
The geographic coverage of
carriers’ enterprise network
services varies significantly.
Not every carrier connects
to every city in their custom-
ers’ networks, and not all
services are available ev-
erywhere. When narrowing
down the universe of poten-
tial suppliers, enterprises
must first consider how
their geographic require-
ments overlap a potential
service provider’s physical
network. They then must
determine if the specific
data services they require
Notes: Data only include IaaS cloud providers from Alibaba,
are enabled at each of the service providers’ PoPs. This AWS, Google Cloud, Huawei Cloud, IBM, Microsoft Azure, Oracle
analysis examines carrier network connectivity and Cloud, and Tencent Cloud. Circle size reflects number of on-
ramps in a given city. Data as of Q1 2023.
service availability from a geographic perspective.

Global Business Center Product

Comparison
Layer 3 MPLS IP VPN remains the most common
enterprise-wide area network product across the key
165 business center metros. In these metro areas, carri-
ers offer over 3,000 offerings of this service. Ethernet
over MPLS is the second most common service in
these locations, with over 2,500 offerings, and DIA was
third, with over 2,300 offerings. EVPN is offered over
2,000 times in these metros, and DWDM is offered over
1,800 times.
28

Global Business Center Provider

Comparison
When sourcing a WAN, enterprises can keep it simple
by relying on one primary global service provider, or
they can work with many carriers to get the lowest
prices in each region. In fact, according to our most
recent WAN Manager Survey, a healthy minority—27%—
of companies sourced their MPLS from a single global
provider. A far smaller share—15%—source their DIA
from a single provider. Enterprises should therefore
have a strong command of the provider landscape in
different regions of the world.

BT is the most widespread IP VPN provider across the

165 business centers, covering more than 110 metros.
The remainder of the top ten includes a roster of well
known providers: Verizon, Orange Business Services,
AT&T, Vodafone, etc.

The enterprise WAN market is in a state of flux. Cloud

computing, the migration of the data center away from
corporate premises, local internet breakouts, and the
introduction of SD-WAN have significantly disrupted
the way multinational corporations design and source
their networks. To assist with this task, we created
the global enterprise WAN Market Size Report. Based
largely on the WAN Manager Survey, which we have
published annually since 2018, this report relies on real
metrics and data and adds to our assumptions about
how these data play out across the globe and into the
future.

WAN Market Size

The 2021 global WAN market for the largest multina-
tional enterprises was worth a median value of $59.2
billion according to our model. The range of potential
market sizes was $53 to $70 billion. This number
includes the key elements of corporate network con-
nectivity: (1) MPLS port charges, (2) DIA port charges,
(3) local access charges, (4) business broadband con-
nections, and (5) SD-WAN equipment and encrypted
throughput charges.
 29

We also looked at the global market shares of specific

connectivity products, and found that:

Access loops to MPLS ports made up the single larg-

est category of global WAN revenue at 31%, which was
$18.3 billion.

MPLS was nearly as large at $17 billion or 29%. To-

gether MPLS and MPLS access loops constituted 60%
of the global WAN market. This is a key finding given
that MPLS revenue is extremely likely to decline over
the coming years.

DIA port sizes skewed larger than those for MPLS, so

although they are generally slightly cheaper than MPLS
ports, these larger ports made up a similar portion of
global WAN revenue at $16.3 billion or 28%.

East Asia dominated the global market in WAN revenue

in our median model run at 41%–a dollar value of $24
billion. Our model assumes this region to be only
15% of global WAN sites, so the large revenue comes
primarily from consistently high prices in parts of the
region. The U.S. & Canada was the next largest revenue
contributor at $9.8 billion or 17%. This is despite the
fact that the region is assumed to represent 30% of
global WAN sites.
30

INTERNATIONAL VOICE

The Downward
Slide Continues

T he year 2014 represents the peak for international

voice traffic. International call minutes declined the
following year, for the first time since the Great Depres-
sion—and it’s been downhill ever since.

The slump in voice traffic has turned into a full-scale

retreat. According to our International Voice Report,
carriers’ traffic fell by 4.0% in 2018, by 6.2% in 2019
and by a further 7.2% in 2020. The COVID-19 pandemic
spurred a short-term rally in international call volumes
in early 2020, but things pretty much returned to the
new normal. Traffic fell a further 6.1% in 2021. By these
standards, 2022 was actually not a bad year, as traffic
fell by “only” 5.8%.

The OTT Effect

The new-ish market dynamic—social calling that
replaced business communications as the primary
driver of ILD usage—fueled a long era of international
call traffic growth that began in the 1990s. In 1990, U.S.
international call prices averaged over one dollar per
minute(!) and business users accounted for 67% of ILD
revenue. A wave of market liberalization in the subse-
quent decade brought new market entrants, causing
prices to tumble, and making international calling ever
more affordable to consumers. In the early 2000s, the
 31

introduction of low-cost prepaid phones made it pos-

sible for billions of people in developing countries to
obtain their own telephones, and to keep in touch with
friends and family abroad easily. Call volumes soared,
and by 2015, calls to mobile phones in developing
countries accounted for 48% of global ILD traffic.

The transition to mobile and social calling drove a

20-year boom in voice traffic, but has also left the
industry uniquely vulnerable to the rise of mobile social
media. While Skype was the dominant communications
application for computers, a veritable menagerie of
smartphone-based communications applications, such
as WhatsApp, Facebook Messenger, WeChat (Weixin),
Viber, Line, KakaoTalk, and Apple’s FaceTime, now pose
a greater threat. WhatsApp had about 2.5 billion month-
ly active users in 2022, with Facebook Messenger
topping 1.3 billion. WeChat reported about 1.3 billion
active users at the same time.

TeleGeography estimates that seven OTT communica-

tions applications—WhatsApp, Facebook Messenger,
WeChat, QQ, Viber, Line, and KakaoTalk—combined had
roughly 6 billion monthly users in September 2023.
These estimates exclude other apps, such as Apple’s
FaceTime, Google Hangouts, and Skype (the latter two
of which have over 1 billion downloads from Google’s
App Store).

It’s hard to pin precise numbers on the volume of

international OTT communications. However, a simple
thought experiment helps to illuminate its likely scale.
Between 1983 and 2007, international phone traffic
grew at a compounded annual growth rate (CAGR) of
15%, and traffic grew an even faster 21% CAGR between
1927 and 1983. It’s hard to believe then that the recent
decline in traffic means that people have lost interest in
communicating with friends and family abroad. Rather,
it suggests that they are turning to other means of
keeping in touch.

TeleGeography has fairly reliable estimates of Skype’s

traffic through 2013, when the company carried 214
billion minutes of on-net (Skype-to-Skype) international
traffic. Telcos terminated 547 billion minutes of interna-
32

tional traffic in 2013, and OTT plus carrier traffic totaled

761 billion minutes. If we assume that total interna-
tional (carrier plus OTT) traffic has continued to grow
at a relatively modest 13% annually since 2013 (with
a drop to 9% in 2018 due to texting, video, and email),
the combined volume of carrier and OTT international
traffic would have expanded to 1.8 trillion minutes
in 2021, and to almost 1.9 trillion minutes in 2022.
Traditional carrier traffic has slumped, but OTT traffic
has risen to fill the void. This calculation suggests that
When we compare top cross-border OTT traffic overtook international carrier

international carriers, traffic in 2016, and would near 2.1 trillion minutes in
2023, dwarfing the 337 billion minutes of carrier traffic
we note that the top nine projected by TeleGeography.
operators carried nearly
half of all global traffic in International Wholesale Services
2022. That’s about 178 Many retail service providers, such as mobile oper-

billion minutes. ators, MVNOs, and cable broadband providers, rely

heavily on wholesale carriers to transport and termi-
nate their customers’ international calls. Wholesale
carriers terminated approximately 257 billion minutes
of traffic in 2022, down 5% from 2021. Wholesale traffic
declined at an average rate of 1% per year over the past
ten years, compared to a -2% CAGR for overall traffic.
Wholesale carriers terminated nearly three-fourths
(72%) of international traffic in 2022, up from 70% the
year before.

Traffic to mobile phones in emerging markets has

spurred expansion in wholesalers’ share of the overall
market. In 2022, wholesale carriers terminated over
87% of traffic to Sub-Saharan Africa and South Ameri-
ca. In contrast, wholesale carriers terminated only 56%
of traffic to Western Europe.

Wholesale revenues have changed only marginally

from ten years ago. But let’s take a moment to look
under the hood. Over the past decade, traffic to mobile
phones in emerging markets has driven international
wholesale market growth. As a portion of overall
wholesale carrier revenues, calls to advanced econo-
mies shrank, as did revenues from calls to fixed lines in
emerging markets.
 33

Who’s carrying all this traffic? When we compare top in-

ternational carriers, we note that the top nine operators
carried nearly half of all global traffic in 2022. That’s
about 178 billion minutes. Among the nine largest
carriers in the world, only one terminated more traffic in
2022 than in 2021.

Global Retail Revenues

Prices & Revenues
from International Calls
Retail ILD call revenues have slowly withered in recent USD billions
years. So, too, has ILD’s contribution to overall carrier
revenues.

Let’s look back a few years. In 2013, retail international

call revenues (revenues that exclude wholesale reve- $80
nues and termination payments) generated $99 billion.
During that year, wireline, broadband, and wireless
services, in total, generated $1.4 trillion. Thus, ILD
accounted for 7.1% of total revenues in 2013. $60

In 2023, ILD accounts for only 3.5% of total carrier

revenues.

For the mobile market, outgoing ILD revenues as

$40
a share of overall wireless revenues had remained
relatively static; they had even increased from 2010 to
2012. Since then, international mobile revenues have
followed the same downward trajectory as fixed ILD
$20
revenue trends. In both the fixed and mobile sectors,
ILD calls account for a noticeably smaller share of
overall carrier revenues than they did a few years ago.

$0

1990 2000 2010 2023

Notes: Data measure retail revenues on outgoing international

calls; totals do not include revenue from wholesale services
or incoming international traffic termination. Data for 2023
are projections.
34

Glossary

Addressable Wholesale Capacity—The amount of capacity Compound Annual Growth Rate (CAGR)—This typically
that wholesale operators are able to sell in the form of refers to the change in price over a given period of time.
managed bandwidth services.
Content Providers—One of the four components of used
Autonomous System (AS)—Organizes data about IP bandwidth. Includes networks deployed by operators
addresses that are accessible through its network such as Google, Facebook, Microsoft, Amazon, Apple, as
and announces that data across other networks using well as content delivery networks and many others.
standardized BGP routing tables.
Cross-connect—A physical cable interconnecting
Autonomous System Number (ASN)—A unique id number equipment (servers, switches, routers) in a data center
that a network must have in order to appear in the global
Ethernet—A protocol originally used most frequently in
routing tables.
local area networks. Despite its local network origins,
Average Traffic—The sum of all traffic across a link in one Ethernet is a common bandwidth product on long-haul
month, divided by the number of seconds in the month. submarine cables.

Bandwidth—A measure of information-carrying capacity Fiber Pair—Submarine telecommunications cables

on a communications channel. May also be referred to as contain strands of fiber optic cable. Light is transmitted
“capacity.” uni-directionally on fibers; thus, a bi-directional circuit
requires a pair of fibers.
Bandwidth Demand—See Used bandwidth.
High Density—Rack space designated for cabinets
Bit—A binary unit of information that can have either of with servers that draw more power than standard. We
two values, 0 or 1. categorize cabinets with 10 kW density or higher as high-
density.
Bit Rate—The amount of capacity transmitted by a single
wavelength. Hub Markets—The most critical converging points of
global network interconnection. Markets with the most
Border Gateway Protocol (BGP)—A standardized gateway
international bandwidth and the largest interconnection
protocol that exchanges routing information among
facilities.
autonomous systems on the internet.

Internet Backbone Providers—One of the four

Channel—Transmission path for a telecommunications
components of used bandwidth. Includes the carriers that
signal.
operate layer 3 IP backbones.
Colocation—The lease of space to house transmission
equipment at the same physical location of a carrier or ISP.
 35

Internet Bandwidth—Refers to the capacity, not average or global hubs but are significant interconnection points on
peak traffic, deployed by internet backbone providers. a sub-regional level.

Internet Exchange (IX)—A physical location where Site Density—The ratio of facility power to data center
networks come together to connect and exchange traffic floor space.
with each other.
Submarine Cable—A group of optical fiber strands
Latency—The time it takes for a signal to traverse fiber. bundled with electrical cabling inside a protective sheath.
Cables are laid directly on top of the ocean floor, but
Lit Capacity—The amount of bandwidth available for use are typically buried underneath the sea floor near land,
on a submarine cable. in shallow water, and in areas heavily used by fishing
industry.
Mobile Virtual Network Operator (MVNO)—A wireless
communications services provider that doesn’t own the Upgrade—The installation of additional wavelengths on
network infrastructure it uses to provide services to its existing lit fibers or the lighting of previously unlit fiber
customers. pairs.

Packet—Generic term for a bundle of data, organized in a Used Bandwidth—The sum of all capacity deployed by
specific way for transmission. Consists of the data to be Internet backbone providers, content providers, research
transmitted and certain control information, including the and education networks, and enterprises and others. Also
destination address. referred to as used capacity.

Peak Traffic—The 95th percentile of traffic across a link Wavelength—A bandwidth sales product of a single
in one month. This is calculated by dividing one month’s wavelength (usually at a capacity of 10 Gbps or 100 Gbps)
traffic into five-minute increments, ranking the traffic on fiber-optic systems employing DWDM.
levels of each increment, and removing the top 5%.

Peering—A practice that allows networks to exchange

traffic. The actual exchange of traffic via peering
relationships can either be a private transaction between
a few operators, or through public arrangements via an
internet exchange.

Potential Capacity—The theoretical maximum capacity

that a cable could handle with current technology. Often
referred to as design capacity.

Purchased Bandwidth—The total of used bandwidth and

purchased but unused bandwidth.

Rack Density—The amount of power drawn by servers.

Route Diversity—The need for users of submarine cables

to acquire capacity on multiple geographically diverse
paths.

Secondary Markets—Markets that are not as large as

36

Research Catalog

Cloud and WAN Research Service GlobalComms Database

This tool profiles international WAN services offered The most complete source of data about the wireless,
by 180 providers and analyzes trends in VPN, Ethernet, broadband, and fixed-line telecom markets.
DIA, and IPL availability and pricing, as well as cloud
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i3forum Insights
home to:
A user-driven voice benchmarking tool for i3forum
consortium members; powered by TeleGeography.
• SD-WAN Research
The only product that catalogs and analyzes the SD-
International Voice Report
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The most comprehensive source of data on international
long-distance carriers, traffic, prices, and revenues.
• WAN Manager Survey
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IP Networks Forecast Service
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The most complete source of data and analysis about
• WAN Market Size Report international internet capacity, traffic, service providers,
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 37

• Dedicated Internet Access • Wavelengths

TeleGeography’s database of dedicated internet In this module, we focus on long-haul city-to-city
access price benchmarks for corporate and retail routes between major global business centers.
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Transport Networks Forecast Service

• Ethernet Over MPLS Detailed forecasts of international bandwidth supply,
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Transport Networks Research Service
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In this module, we track long-haul city-to-city routes
between major global business centers.
WAN Cost Benchmark
Provides tailored end-to-end price benchmarks for
• Ethernet VPN enterprise wide area networks, based on the client’s
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A WAN Geography benchmark is your personalized
• IP Transit cloud and WAN compass. This bespoke tool helps users
A database of wholesale internet access price quotes optimize their network architecture for the cloud.
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than 30 carriers in over 100 cities around the world.

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actual transaction prices paid by carriers for leased
private lines and Ethernet circuits.

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TeleGeography’s price benchmark tracks VPN port
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• TDM
TeleGeography experts routinely survey facilities-
based service providers that offer point-to-point
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