These days, the chances are high that your days are much like mine.
Our mornings and afternoons are spent working from home offices, spare rooms or even the kitchen, using cloud apps and collaboration to stay productive. Many of course are also juggling home schooling in a new online way. And our evenings are filled with digital content – streaming TV shows, playing online games or making video calls to catch up with our families and friends. Our online lives are now our everyday lives.
In fact, the restrictions imposed on us by the COVID-19 pandemic have highlighted just how much we rely on the Internet in our day-to-day lives. On our international networks alone, we have seen a spike of up to 50 percent in bandwidth use, and we’ve been working hard to help content, SaaS, collaboration as well as gaming providers keep up with surging demand.
These technology companies, who deliver services entirely online, are so integral to how we live, work and play today. We don’t often think about the network infrastructure that makes this happen – because, these days, we just expect the Internet to work. Why shouldn’t we? But, it’s a testament and a timely reminder to the vital role connectivity plays – at a time when keeping the world connected has never been more important.
Telecommunications providers like Telstra have been connecting companies and people around the world for decades – building that Internet infrastructure so that data and content travels the world in milliseconds to reach consumers. And it’s that infrastructure that enables the online services we take for granted to exist and thrive.
Building these connections between people and content isn’t easy. Even before the pandemic hit bandwidth demands were on the rise around the world, with the majority of this driven by content, cloud and software providers. And regions like Asia are experiencing the strongest growth with international bandwidth demands expected to continue increasing by 45 percent compounded annually between 2018 and 2025, according to TeleGeography.
A shift in the market
Content providers are now the largest users of international capacity. Having accounted for less than 10 percent of total usage prior to 2012, content providers’ share of total capacity surged to 54 percent in 2018 as network capabilities improved, technology firms such as Facebook and Google enhanced offerings, and user demand increased.
And the COVID-19 pandemic is only serving to boost those numbers even more. Gaming research firm Newzoo estimates global e-sports revenues will hit $1.06 billion this year, with streaming revenues growing faster than expected driven by higher viewership as a result of the global quarantine. Euromonitor also notes the e-sports industry has shown resilience in these times largely due to the format in which it operates, with the number of participants, whether as players or viewers, having grown drastically in the past few months.
Meeting Asia’s demands
Asia makes up more than 60 percent of the world’s population and is one of the fastest growing regions on the planet. When it comes to purchasing power, McKinsey forecasts Asia to tip 50 percent of the world’s GDP by 2040, and to account for 40 percent of global consumption in the next 20 years.
The Asian population is demanding innovative, connected services, more than ever before, propelled by technology adoption. This in turn is driving a boom in bandwidth demands across the entire technology and media sector.
How do we meet this enormous appetite for data? We believe the key is investment in the network. As demand soars, it is increasingly critical to accelerate connectivity across the world. And the market is responding with an additional $7.4 billion worth of new cables launching between 2019 and 2021.
Subsea cables form a crucial part of international network infrastructure – in fact, they deliver 99 percent of all international data. While some technology firms such as Facebook and Google, have begun building their own subsea cable networks, the sheer magnitude of this undertaking means that majority of providers must partner with a cable operator.
Telstra is a critical part of that international infrastructure, given we operate the largest intra-Asia subsea cable network in the region spanning more than 400,000 kilometres and carrying around one third of Asia’s Internet traffic. We are also continuing to invest heavily in subsea cable systems that connect the United States and Asia Pacific. This lets us enable American companies to enter the global market and scale at pace, as well as gives us flexibility to deploy capacity to match customer demand.
And we’re growing our footprint. Telstra has announced critical new investments and cable paths across Asia-Pacific as capacity demands have almost doubled in the last two years (up to 200Tb). This includes increasing our investment, and therefore capacity, in the Southern Cross network to a 25 percent stake, as well as investing in the new low-latency Southern Cross NEXT subsea cable to cater to the explosive growth in US-Australia data.
We’ve also boosted our Asia to US capabilities with a half fibre pair investment in the Hong Kong Americas cable and a 6Tb capacity purchase in the Pacific Light Cable Networks cable. On top of that, we have made significant terrestrial investments in key markets including Korea, Taiwan, Japan and China, enabling greater diversity and network resiliency. We fundamentally believe investing in the underlying network assets gives us a unique position as a service provider to technology companies all over the planet.
We’re also investing in diverse cable routes to offer our customers greater network resilience. Our ‘Always On’ solution is a world-first assured availability service across Hong Kong, Singapore and Japan via three paths on our network. Since July 2019, we have increased capacity by 18Tb – mostly across terrestrial, in-country networks in Asia-Pacific. This gives our customers more access to varied routes alongside improved network performance.
Supporting your services
One of the challenges technology and media companies face in delivering services to Asia Pacific is finding a connectivity partner in a challenging business market.
The region comprises both developed and developing markets, each with their own regulatory framework to navigate. This is complicated by the high incidence of cable failures in Asia Pacific, a region with shallow waters, heavy shipping traffic and natural disasters.
We have invested in infrastructure as well as people on the ground in Asia to be where our customers need them to be. That's why some of the biggest technology and media successes in the world trust us to connect to new opportunities, innovation and revenue in this region. These include 11 of the top 12 technology companies in the Fortune 500, and seven of Forbes’ top 10 global digital companies.
Telstra brings the amazing things technology and media companies create to customers in some of the fastest-growing places on the planet. Even in these challenging times, we’re here to help them disrupt, innovate, and build by connecting them to Asia, and the rest of the world.
Telstra connects the world’s largest technology and media companies in the Americas to new opportunities, innovation and revenue in Asia. We have a team of tech and media network experts based in key U.S. cities dedicated to serving this fast-growing sector, who understand its unique challenges and needs. Discover how Telstra can help you connect to Asia and beyond by visiting our website