Without Big Investments in Telecom Soon, the Internet Will Choke on Traffic

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BOONTON, NJ. October 2, 2001:

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If it took nearly 40,000 broadband switches and routers to move an estimated 20,000 terabits per day generated by US Internet traffic last year, imagine the investment needed to handle a network that is essentially doubling every year.  That is what Insight Research did, and the NJ-based telecommunications market research company now estimates a whopping $50 billion dollars in new gear will be needed over the next five years or US Internet traffic will gradually grind to a halt.

According to Insight’s report, ATM, IP, and Broadband Switching 2001-2006, total US Internet traffic in 2006 will exceed 1.5 million terabits per day. To handle this growth, Insight expects the number of broadband switches and routers to almost triple, at the same time as the throughput capacity per switch increases by a factor of 25. Essentially all of the 2006 switches used in distribution and backbone packet networks will be new, and the aggregated investment will amount to almost $50 billion, the report says.

“The so-called capacity glut is a chimera,” says Insight president Robert Rosenberg. “It’s a mythical creature invented by the investment community because they couldn’t justify their inability to distinguish between the long-term telecom infrastructure investments needed to meet forecasted demand and the short-term market development capital that was thrown at ‘new economy’ dot-coms. Our analysis suggests that over the next five years a tremendous investment in switching systems will be required or the network will choke on its own traffic—and we just don’t believe that is going to be allowed to happen.”

ATM, IP, and Broadband Switching 2001-2006 forecasts data traffic growth, the number of access, metro, and core network connection points for accommodating the forecasted traffic growth, and the types of equipment and investment that will be needed to keep data traffic moving within the US.

A free report excerpt, table of contents, and ordering information is online at www.insight-corp.com/atmip.asp. 

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Donna Savino

at Insight Research

973-541-9600