Six companies dominate network traffic as speed and access grows

In 2021, just six companies – Google, Facebook, Netflix, Amazon, Microsoft and Apple – generated nearly 57% of global network traffic, according to research by Sandvine, a network monitoring company.

As Samir Marwaha, Sandvine’s Chief Strategy Officer, notes in a blog, telcos are investing heavily in the fixed and mobile networks, 5G trials and licenses that ensure the quality of experience which internet companies rely on. He cites figures from Reuters, which claim investments in Europe's telco sector rose to 52.5 billion euros ($59.4 billion) in 2020, a six-year high.

Recent data from the Global Mobile Suppliers Association (GSA) and regulators, including Ofcom in the UK, demonstrate how that spend is translating into increased network speeds and coverage.

In December 2021, the GSA identified 481 operators in 144 countries or territories that are investing in 5G, up from 412 operators at the end of 2020. In addition, a total of 98 operators are investing in 5G standalone (5G SA) for public networks, with 47 operators known to be actively deploying the technology.

The GSA also reported that 81 operators are marketing residential or business 5G fixed wireless access (FWA) broadband services, up from 44 a year ago.

Ofcom, meanwhile, in its 2021 annual report, estimates there are approximately 6,500 mobile sites providing 5G coverage across the UK, up from around 3,000 in 2020, and that it is possible to access 5G from at least one operator outside 42-57% of UK premises.

There is also considerable investment in fiber to the home both in the UK and in the Europe Union. More than eight million (28%) UK homes now have access to full-fiber connections, according to Ofcom, a rise of three million compared to a year ago, making it the largest year-on-year increase in full fiber coverage the regulator has seen. The UK Government has set a target of at least 85% gigabit coverage by 2025 and has committed £5 billion in investment as the UK Gigabit Program, with at least £1.2bn available by 2025.

In the European Union, meanwhile, gigabit connectivity covered 59% of EU homes in 2020, up from 50% a year earlier, helped by growth in fiber to the premises (FTTP). In addition, 87% of EU homes in 2020 were covered by access technologies that can deliver download speeds of at least 30Mbps.

The question for communications service providers (CSPs) as they enter 2022, is how they can profit from their heavy investment in networks amid changes in business models, technology and competition.

TM Forum analyzed the question in its recent report Mapping a path to revenue growth, which included an examination of opportunities in the B2B market that could help lift flat revenues.

In Europe, CSPs have also been turning to governments to help alleviate the weight of future infrastructure investments, including a call for funding and tax incentives to CSPs developing Open RAN.

Worldwide, however, not every would-be communications service user is equal. The ITU estimates 37% of the world's population – or 2.9 billion people – have still never used the internet.

But even in developing countries internet penetration climbed more than 13% since 2019 and by 20% in the 46 UN-designated Least Developed Countries (LDCs).